Applications will be due August 9, after two rounds of questions this month

New York calling for mobile sports betting platform providers

Once licensed mobile sports betting apps are launched in the state, New York will become the largest online sports betting market in the U.S. 
2021-07-12
Reading time 2:35 min
According to the RFP issued Friday by the Gaming Commission, the state wants to partner with at least two platform providers and have at least four operators available for bettors. Those applicants who agree to a 50% tax on gross gaming revenue or higher, and have a revenue-sharing deal with a tribal operator, would receive more points. The regulator plans to select finalists by Dec. 6 and give them a week to submit a final application.

The New York State Gaming Commission on Friday issued a request for applications (RFP) for mobile sports betting providers in the state.

New York is seeking providers willing to be taxed at 50% or higher of their gross gaming revenue, in addition to the $25 million license fee, according to the application posted on the commission’s website. These applicants would be rewarded with a 10-year license.

The state seeks to partner with at least two platform providers and wants to have at least four operators available for bettors, The Center Square reports. The platform providers will be responsible for setting up agreements with the operators as part of their application.

Following two rounds of questions and responses this month, applications will be due August 9. After reviews and oral presentations, the Gaming Commission plans to select finalists by December 6 and give those applicants a week to submit a final application. Awards would then be made at the commission’s following meeting, a date for which has not been set.

The call for applications was supposed to take place by July 1, according to the budget lawmakers passed in April. The NY Gaming Commission did not give an explanation for the delay. State Sen. Joseph Addabbo, D-Queens, the chairman of the Senate Committee on Racing, Gaming and Wagering, has said he would like to see sports betting apps launched by the Super Bowl in February.

Applicants must pass a technical review in order to be considered for licensure. Proposals will be scored on several factors, including their experience in sports betting as well as their operator partners’ experience. Applicants will also receive bonus points if they have a revenue-sharing agreement with a tribal gaming operator in the state.

Those platform providers that agree to a 50% tax on gross gaming revenue would receive 20 points toward their application score. If they go higher, then they will receive a bonus point for each percentage point above 50. Those that propose a lower rate will receive fewer points.

If applicants agree to the 50% rate, it would be one of the highest rates in the country for sports betting. New Hampshire taxes revenues at 51%, and Pennsylvania taxes at 36%. Indiana taxes sportsbook revenues at 9.5% and New Jersey taxes online sports betting revenue at 13%.

The 50% tax threshold has been a key point for Gov. Andrew Cuomo, who until just months ago had not been a proponent of offering mobile gaming in the state. However, after the COVID-19 pandemic threatened the state’s finances, he sought new sources of revenue. He wanted to work directly with sports betting companies, similar to how the lottery works and receive a larger share of the proceeds from operators. During the latter stages of budget negotiations, the Cuomo administration and lawmakers reached a deal that used the framework of the governor’s plan but allowed for more operators to get access.

A January study published by Spectrum Gaming Group for the Commission estimated that New York’s digital market could generate up to $856 million in gross revenue for operators. But Cuomo’s plan estimates the state could receive $49 million in tax revenue in fiscal year 2022 and $357 million the following year. A mature market, he believes, could generate $500 million in the state.

Once licensed mobile sports betting apps are launched in the state, New York will become the largest online sports betting market in the U.S. 

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