Late on April 6, 2021, and days after the so-called NY State budget deadline, Governor Andrew Cuomo and state lawmakers reached a deal to finally bring mobile betting to New York. Cuomo stuck to his guns, despite recent challenges to his administration from every angle, with a result that came quite close to his preferred sports betting model. In the end, New Yorkers could be placing bets online before the end of the year.
April 6, 2021 Negotiation
Much of the local press in New York are saying the same – this “final” negotiation raises more questions than answers. The language of the bill is complicated, and so much different than how the mobile gaming industry has developed in nearby states like New Jersey and Pennsylvania. The one result is clear though, that Cuomo wanted a state-run model and he is getting what he wanted, at least for now.
Key Provisions Of The NY Mobile Betting Agreement:
- The New York Gaming Commission will choose two operators, chosen under a Request For Proposal scheme.
- Each operator will pay a $25 million licensing fee, one of the highest in the US.
- Proposals are due no later than July 1, 2021. The NYGC will have 150 days to choose the 2 operators.
- These 2 operators will be able to operate a minimum of 4 sportsbooks statewide, or “skins” as they are known in the industry. There is no set number of skins that each operator may launch so long as there are a minimum of 4 statewide.
- This number could be expanded in the future.
- The operators will need to pay local casinos a minimum of $5 million to house their servers at the casino, as is required under NY law.
- College betting will be permitted, but not on NY college teams.
Previous reports on New York Sports Day estimated that Cuomo’s lottery model could bring in less revenue than under a truly commercial, casino-run model. It is estimated that a full lottery-run model could half revenue in the first year. It is unclear what the outcome will be from this 2 operator/4 skin model.
Who Could Be New York’s Chosen Ones?
There is a lot of speculation on who will win the coveted spot as one of the two mobile betting operators in New York. Several sports betting companies already have agreements in place with local casinos, including Penn National and Golden Nugget. DraftKings, FanDuel, and BetRivers all operate retail sportsbooks at casinos peppered throughout the state.
It could be that a company like Flutter, the parent company to FanDuel and FOX Bet, among others, could make the cut because of their ability to launch multiple skins under one operator license. Or, New York could see technology providers, like Kambi, apply for an operator license and then launch with individual sportsbooks under the Kambi license.
It appears mobile operators will be taxed at a minimum of 14%, but an operator could offer to be taxed at a higher rate in order to secure the license. Operators who have an agreement with a tribal casino in New York would also see preferential treatment in the RFP process.
Oneida Nation Claims Over NY Gaming
Much was said this week about the Oneida Nation and their exclusive rights to manage all gambling on their lands, which cover about 10 counties in Central New York. Although in a press conference on April 5, Cuomo inferred that the agreement with Oneida would be taken into consideration in any negotiation, this didn’t seem to happen.
All issues raised by the Oneida Nation still exist and are tabled until a later date. In the meantime, the Oneida Nation is threatening to withhold $70m in payments to New York State until the issue is resolved.
What’s Next In New York?
There is a hearing scheduled for the morning of April 7, where the NY Assembly Ways and Means Committee will approve the negotiated terms. There are some other procedural hurdles before the negotiated terms become law.
The final bill will need to be signed by Cuomo before becoming official. From there, potential operators have until July 1, 2021, to submit their proposals to the New York Gaming Commission. The NYGC will have up to 150 days from the receipt of the proposals to determine who will get the coveted two operator licenses and skins.
When Will New Yorkers See Mobile Betting?
Most states take time between finalizing legislation and legalizing mobile betting and actually launching apps. This is due, in part, to the amount of time it takes to prepare rules and regulations for the industry and to license and approve apps. In this case, it seems like there is an extra layer due to the Request for Proposal process.
Regardless, shortly after the agreement was announced, Senator Addabbo made a statement that he hopes to see apps launch in September, at the start of the football season. Perhaps realizing that is a bit optimistic, he admitted that the ultimate goal is to have apps launch before the Super Bowl, scheduled for February 13, 2022.