The New York Gaming Commission yesterday approved nine operators for New York online sports betting, putting an end to months of speculation as to who would receive access to one of the largest markets in the entire country.
So…now what? How exactly did the New York Gaming Commission determine FanDuel, DraftKings, BetMGM, Bally Bet, Kambi, Caesars, WynnBET, PointsBet, Rush Street Interact and Resorts World deserved to be the first New York online sports betting operators?
And, most importantly, when will New York sports bettors actually be able to place bets?
When Will New York Online Sports Betting Launch?
It’s the million dollar question. Unfortunately for state gamblers, the launch is not like flicking on a light switch. Several additional regulatory hurdles will have to be cleared before the sportsbook operators can begin accepting sports bets.
The gaming commission will first have to publish and approve the state sports betting rules document. If approved today, the commission can submit to the state register and have it published by Nov. 24.
Each sportsbook can launch on their own timeline, but cannot technically operate until the publication of the rules document is complete.
Then, the process will largely hinge on the construction and creation of servers to process the sports bets coming in from state bettors. These four servers will be located and housed in the four brick-and-mortar New York commercial casinos.
It all adds up to a potential launch around Super Bowl LVI in February 2022.
Senator Joseph Addabbo Jr., a proponent of online sports betting, told Elite Sports New York on several occasions that the goal for the state was to have online sports betting fully launched and operational by the Super Bowl.
How Did New York Online Sports Betting Get Here?
To understand where we are we have to see where we’re coming from. When former Gov. Andrew Cuomo included online sports betting in his approved 2022 Fiscal Year state budget he envisioned a program with limited sportsbooks and a high tax rate to maximize profits for the state.
New York has a population of 19.45 million, the fourth highest in the country, and will instantly be one of the largest online sports betting market in the country (if Florida cannot fully launch its own online sports betting program due to legal challenges).
New York will likely be the only state to potentially topple the current sports betting handle giant that is New Jersey, which recently went over $1 billion in total sports betting handle for one month.
While Cuomo’s vision of a handful of books didn’t come true, the state’s high tax rate certainly did. New York will institute a 51% online sports betting tax rate, one of the highest in the countries, which will lead to hundreds of millions in annual revenue for the state.
However, as several sportsbook operators have noted, it may also lead to reduced promos, potential free bets and bonuses for New York users.
After the budget approval, the New York Gaming Commission was tasked with approving the framework of the state’s program. The commission was required to choose a minimum of two platform providers (the technology used for the back end of New York online sports betting) and four platform operators (the front-facing apps for customers to use).
The commission received bids from six groups over the summer all vying for state online sports betting licenses. Each bid included potential tax rates, possible revenue sharing programs with state Indian Tribes, and annual revenue estimates.
“New York is a crown jewel market with more than 20 million residents which, upon launch, will become the largest online sports betting market in the United States,” Rush Street Interactive CEO Richard Schwartz said in a release.
— RLinnehanXL (@RLinnehanXl) November 8, 2021
From these bids, the commission yesterday approved eight platform providers and nine platform operators, which resulted in the 51% tax rate as noted in the commission’s final tax rate matrix.
Here are the eight approved platform providers:
- Bally Bet
- Wynn Interactive
Here are the nine approved platform operators that will have sportsbook apps available for state gamblers:
- Bally Bet
- Rush Street Interactive
- Empire Resorts
Each of these sportsbook companies received a 10-year license to operate in New York. Additional licenses can be awarded by the New York Gaming Commission during this time if it’s to the benefit of the state.
DraftKings' statement on New York mobile sports betting and being selected as a sports betting operator pic.twitter.com/5sJFz2h1Xq
— DraftKings News (@DraftKingsNews) November 9, 2021
Winning Online Sports Betting Groups
The New York Gaming Commission determined the bidding group of Caesars, Kambi, PointsBet and Wynn Interactive was the highest rated group among the six original bidders. The group submitted a potential tax rate of 64%, which the gaming commission allowed other bidding groups to match to be considered as finalists.
Two additional groups matched the tax rate. The group of FanDuel, DraftKings, BetMGM and Bally Bet matched the rate, and so did the solo group of Bet365.
The commission determined it was in the best interest of the state to also award licenses to the FanDuel, DraftKings, BetMGM and Bally Bet group. Bet365 was the only finalist that was not approved for a license.
“Bally’s is pleased to have been awarded an online sports betting license from the State of New York — the most populous state to enable OSB — and would like to thank the New York State Gaming Commission for including Bally’s in this exciting endeavor. This license advances our overall market footprint and marks the latest milestone on our journey towards becoming the leading omni-channel gaming provider in the U.S.,” said Soo Kim, Chairman of Bally’s Corporation’s Board of Directors, in a press release.
Who Was Kept Out of the Market?
In addition to Bet365, several prominent sportsbook operators were kept out of the New York online sports betting market.
Penn National Gaming (Barstool Sportsbook), Fanatics Gaming, FOX Bet and theScore all submitted bids to the gaming commission. None were considered as finalists for a sports betting license in the state.