New York State gambling regulators have approved nine operators to conduct mobile sports wagering, including heavyweights FanDuel, DraftKings and BetMGM. Licenses were announced on Monday, and companies will be taxed at 51% of their revenue for a 10-year period, one of the highest tax rates among all US states.
The New York State Gaming Commission chose two groups, as big names grouped under conjoined bids in the license race. DraftKings, BetMGM, Bally’s Corp. were all part of one of the winning bids, which applied under FanDuel. The second group included Caesars Entertainment, Wynn Resorts, PointsBet Holdings, Rush Street Interactive, and Resorts World, and was led by technology provider Kambi Group.
Mobile betting was included in the state budget last April. Regulators have been working since to evaluate the bids: four of a total six proposals have been left out of the market. These include a conjoined bid between Barstool Sportsbook (Penn National Gaming) and Fanatic Sportsbook; and solo bids from European gaming company bet365, Canadian sportsbook theScore, and FOX Bet.
New York State Senator Joseph Addabbo, a Democrat who chairs the racing, gaming and wagering committee, said he hoped the new operators would be up and running by the Super Bowl in February, if not sooner, according to Bloomberg. “This is big,” he described New York’s nascent market. “Once we enter the arena, we’ll eclipse New Jersey.”
Although the state would have a long way to go before reaching New Jersey, which recently became the first US state to top $1 billion in monthly sports betting handle, this could end up happening once the New York State market reaches its maturity. Officials estimate mobile gambling will eventually generate about $482 million in tax revenue from a $1 billion market.
This potential, however, comes with a high price: sportsbooks will be taxed on 51% of their revenue, far above the 11% median in the country. The only other state with a 51% tax rate is New Hampshire. Despite this, operators seemed willing to agree to the rate, based on the state’s promising userbase: large population, sports culture, and a high average income.
There is still no formal timeline for the program to launch: the next step in the process is for licensees to find a facility to house the servers, which will then have to be approved by the Gaming Commission. Servers must be located in a commercial casino within the state, and operators are mandated to pay them a $5 million annual fee for housing their operations.
Companies selected by the state have started to issue statements on the approval. Adam Greenblatt, BetMGM’s CEO, celebrated the news, and described having a footprint in New York as “vital to ensuring nationwide leadership” in sports betting and iGaming over time.
Meanwhile, Bally’s Corp. remarked the license advances its “market footprint and marks the latest milestone” in their journey towards becoming a leading omni-channel gaming provider in the US. “Above all, we look forward to providing New York's devoted fan base with engaging, best-in-class, sports betting experiences," said Soo Kim, Chairman of the Board of Directors.
Caesars Entertainment also shared this enthusiasm. “We’ve been looking forward to the opportunity to bring mobile sports betting to New York,” commented CEO Tom Reeg. “With more than 19 million people, New York will be the biggest mobile sports betting market in the country.”