The New York Gaming Commission, responsible for the oversight of the gambling industry in the Empire State, okayed a set of online sports betting regulations yesterday. This cleared the latest legislative hurdle standing in the path of legal sports wagering in New York. The regulations were adopted with little discussion on behalf of the regulatory body’s members who unanimously voted in favor of the new rules.
Yesterday’s meeting ended in less than nine minutes after a brief explanation from Robert Williams, Acting Executive Director of the New York State Gaming Commission (NYSGC). The regulatory process will likely continue without further interruptions despite the resignation of New York’s Governor Andrew Cuomo earlier this month. The newly approved set of regulations includes rules on financial records, betting systems, and accounting requirements.
Several days ago, the regulator released a document with comprehensive information about the submissions of the six applicants. The regulatory authority has the mandate to pick at least two mobile sports betting platform providers, which can cumulatively offer a minimum of four skins. Local punters, however, can have no more than one account per platform provider.
The bidding process is dominated by FanDuel Sportsbook whose submission also contains applications from industry heavy-hitters Bally Bet, BetMGM, and DraftKings. The bid lists FanDuel Sportsbook as the platform provider whereas the other three heavyweights will act as operators. The four parties involved in the consortium jointly account for 78% of the US sports wagering market. Their market share in the neighboring state of New Jersey amounts to 81%.
The FanDuel Consortium Proposes a 50% Preferred Tax Rate
The super-bid group proposes a 50% tax on the gross gaming revenue (GGR). It estimates this would bring approximately $600 million in tax revenue for the state within the first year of online sports wagering operations alone. According to the consortium, the first three years will generate over $1.3 billion in annual tax revenue for the Empire State.
The group, however, insists for its bid to be the only one accepted. It argues this would meet the requirements for multiple platform providers, with a minimum of four sports betting operators. Additionally, the members of the consortium claim that they are the only bid candidates whose operations are large enough to deliver the proposed 50% tax rate.
Another bid lists the Kambi Group as a platform provider, with applications from two sport-related brands – the merchandise brand Fanatics Inc. and the New York-based Barstool Sports. This consortium predicts roughly $1 billion in tax revenue for the state over the next ten years, in addition to the tax proceeds generated by any other approved bids.
Fanatics would be a new entry on the sports wagering scene and has appointed the hugely successful rapper, media proprietor, and entrepreneur Jay-Z as its vice chairman. This consortium has yet to disclose its proposed tax rates, however.
The state’s gambling regulator will use a point-based system to evaluate the strength of all applications involved in the bidding process. The two bids with the highest point scores will receive licenses on condition they reach an agreement to both pay the same tax rates.
The NYSGC may also grant licenses to additional bids provided it deems them solid enough. According to NYSGC’s Executive Director, Robert Williams, the regulatory body must announce the names of the approved bidders by January 6, 2022. The bidders’ oral presentations will start on September 1, 2021.