It’s been three months since lawmakers in the Empire State settled on a budget that included the legalization of mobile sports betting. After a bit of a delay, New York state regulators are now officially inviting interested parties to bid for the right to implement those political plans.
The New York State Gaming Commission on Friday published a request for applications for at least two licenses to operate a platform for mobile sports wagering, which will host a combined total of at least four consumer-facing operators.
While the RFA was supposed to be issued by July 1, its eventual release still marks a key point in New York’s slow and steady march toward online sports betting in a state where some retail wagering at casinos already exists. Moreover, it suggests just what it will take for a company to be handed the keys to one of the great untapped markets in the United States — and it could be costly.
“The statute (a new section of New York racing, pari-mutuel wagering and breeding law) directs the Commission to conduct a competitive bidding process to award licenses to Mobile Sports Wagering Platform Providers based on the ability of the Platform Provider to maximize sustainable, long-term revenue for the State,” the RFA states. “Pursuant to that authority, the Commission issues this RFA to license two or more Mobile Sports Wagering Platform Providers.”
The Gaming Commission has posted the RFA for Mobile Sports Wagering and Pre-proposal Draft Regulations on our web site. The pre-proposal draft regs are under heading Proposed Rules on the page. https://t.co/uMsq82zcm7
— NYSGamingCommission (@NYSGamingComm) July 9, 2021
What a platform provider would have to do is outlined in the RFA, such as "fully integrate the Operator’s wagering system into the Platform” and “accept and register all wagers.”
Operators, meanwhile, would be the public-facing entity that takes bets from gamblers using the platform, the document notes. Applicants will have to detail how many operators they are proposing to host on their platform and if they plan on being an operator themselves. Operators will need their own, separate licenses, too.
Also laid out are the criteria and scoring system for selecting the platform providers, as well as draft proposed regulations that will act as a guideline for bidders.
One point of interest by the regulator is just how fast the applicants can start taking bets.
“The Applicant shall demonstrate the Applicant’s ability to effectuate rapidly the commencement of mobile sports wagering on the Applicant’s platform and to bring Authorized Sports Bettors effectively onto the Platform,” the RFA says. “The Applicant shall provide a time from award of license to the date on which each Operator shall be prepared to accept mobile sports wagers through the Applicant’s Platform.”
The tax, man
Nevertheless, a major selling point for applicants will be just how much money they are willing to send the state’s way.
Applicants must first score at least 60 out of a possible 75 points on "technical" factors, such as their betting experience, to be considered qualified. Up to five bonus points are also available if the applicant strikes a revenue-sharing deal with one of the state's Native American tribes.
Yet applicants will have to fill out a “pricing matrix” as well, which will “set forth the tax rate that an Applicant accepts under varying competitive scenarios” of platform providers and operators, the RFA says.
“An Applicant must provide a tax rate that is fifty (50) percent or greater for its Preferred Scenario,” it adds. “However, if the Applicant’s Preferred Scenario alone is less than the statutory minimum of two Platform Providers and four Operators, the Applicant must instead provide a tax rate that is fifty (50) percent or greater for such statutory minimum scenario.”
Interested parties will compete on such "pricing" factors, with a proposed taxation rate on the gross gaming revenue from mobile sports wagering.
New York Gov. Andrew Cuomo has made it clear he expects to extract a considerable price for legal access to the state’s mobile sports betting market. With many bettors currently taking their business across state lines to New Jersey, Cuomo has predicted online sports wagering in New York will generate $500 million a year.
“So the $500 million will go to the state, rather than a lot of middle men who operate mobile sports betting, which is what many other states have done,” Cuomo said in April, according to a transcript. “This is like the state lottery where we operate it and we get the resources.”
Next steps
A schedule included in the RFA shows the first round of questions from applicants is due by the afternoon of July 16, with answers to come on July 22. A second round of queries is then due by July 27, followed by more responses on August 2.
After the Q&A comes a deadline for applications on August 9. Oral presentations of those applications can then start on September 1.
If there is a need for an amendment to an application, interested parties would have one week after being notified of the need.
Selection of applicants will happen before December 6, the RFA says, and the award of licenses to at least two of the highest-scoring platform providers would take place at the next commission meeting.
