New York approves nine sportsbooks for mobile betting

The New York State Gaming Commission announced on Monday that it had selected two mobile betting bids in the recently concluded RFA process. One of the winning applications was submitted by FanDuel Sportsbook featuring DraftKings, Bally Bet, and BetMGM, while the other comprised Caesars, PointsBet, Resorts World, Rush Street, and Kambi Group as the primary sponsor.

The regulator’s decision paves the way for all nine operators to move on to the next step, which is finding land-based casino partners as required by the state’s gaming law. The Gaming Commission will have to sign off on these partnerships as well before the companies can launch their online betting platforms.

Sportsbooks approved by the regulator will receive permits with a 10-year validity at the cost of $25 million, and they will be taxed at the rate of 51% of net receipts. Online operators will also be required to pay their land-based commercial casino partners $5 million annually for housing their servers and equipment.

The approved companies are expected to start operating before the 2022 Super Bowl.

Sen. Addabbo predicts NY will upend NJ betting market

In a statement about the NY Gaming Commission’s decision, NY Senator Joseph Addabbo said he was confident that the state’s mobile market would be bigger than the New Jersey sports betting industry.

“This is big. Once we enter the arena, we’ll eclipse New Jersey,” he said.

With a population of more than 19 million people, the Empire State has the potential to become one of the biggest sports betting markets in the US at maturity. New York’s deep-rooted sports culture is also expected to aid the growth.

The operators recommended to offer online wagering in the state also echoed the Senator’s enthusiasm in their official statements following the announcement by the Gaming Commission.

BetMGM CEO Adam Greenblatt said: “We’re pleased to share that BetMGM has been granted a license to operate mobile sports betting in New York, a state vital to ensuring nationwide leadership in sports betting and iGaming over time. We would like to thank the New York Gaming Commission as well as congratulate them for keeping to their timetable. New York has the potential to be one of the largest sports betting markets in the US.”

In his remarks, the CEO of PointsBet US Johnny Aitken said: “Having the potential to secure market access to New York state – expected to be one of the largest and most important markets in the United States – represents another major milestone for our company, our brand, and our technology.”

Industry experts predict that the state’s mobile wagering industry will generate over $1 billion in monthly handle when it matures, a feat only achieved by the Garden State so far. NJ hit the $1 billion monthly betting handle benchmark in September, and the numbers are expected to continue soaring as the sports calendar gets busier.

However, it will take some time for New York to get to New Jersey’s level considering that the latter launched mobile betting in August 2018.

Will the tax rate affect the odds?

As New York prepares to launch its mobile betting industry, one of the biggest proponents of regulated wagering in the state, Assemblyman Gary Pretlow, is not very optimistic about the future of the market due to the high tax rate imposed on operators.

Commenting on the subject last week, the legislator was concerned that the 51% tax rate would compel sportsbooks to raise their margins, which would in turn affect the quality of odds they offered to New Yorkers.

According to Pretlow, NY is likely to lose its betting dollars to neighboring New Jersey and Connecticut, where the tax rate is only 13% and 13.75%, respectively, as bettors will be sure to get better odds there.

“If you know anything about gaming, you would give your left foot a half a point. And if New Jersey is going to offer better odds on a game, any game, then New York, the people that are betting – especially the big bettors – they are going to New Jersey,” said Pretlow.

“They’re used to going to New Jersey already, they go to Jersey now, and for that half a point they’re going to go to Jersey. And they can go to Connecticut. We’re surrounded by entities that will have better odds than what we have.”