New York Mobile Sports Betting Bidding Details Released

The New York State Gambling Commission released the details of the bidding procedure for the NY-state sports betting licenses on July 9th. This milestone comes nearly three months after Cuomo signed the sports betting bill into law.

Applicants will now have a 30-day period to apply. The NYSGC will hand out a minimum of two platform provider licenses and four sportsbook licenses. After the application phase closes the commission will have 150 days to select the winners, who are now expected to get announced in early January.

The NYSGC also released its proposed mobile betting regulations. There is still no concrete launch date for mobile betting to launch in the state, but the finalists should be picked before December 6, 2021.

Mobile Sports Betting Application Requirements

Any of the future platform providers in the state are required to handle nine designated services according to the released list of regulations. While most of these services are already handled by the providers, some rules are unique to New York state.

Platform providers will be required to take and register bets and also generate tickets for these bets. Additionally, all platforms will have to compute the wagering and payoff processes on their own while keeping a record of all betting activity and maintaining the integrity of the platform. Providers will have to allow users to access all sportsbooks associated with their platform through a single wallet.

The commission will also request reports to be generated and submitted. Platform providers will be also required to allow remote access to their platform through a secure method. All data from transactions will have to be kept for seven years. The licensing process will be where most of the information is learned about the potential operators.

Through the process, an applicant must break down their marketing budget, advertising and promotional plans, and their campaigns that are aimed at the conversion of sports bettors that are currently using unlicensed offshore sites.

Scoring Details for Platform Providers

All applications will be scored among seven categories and they can reach a total of 75 possible points. To be considered a qualified applicant, providers will need to reach at least a score of 60 points before they can submit a bid.

The largest category, with a maximum total of 25 points awarded is the general sports betting expertise showcased by the platform and the sportsbook. The integrity, safety, and sustainability of the platform can also score up to 20 points for each applicant. The category where platforms can score the third-most points (15) is past relevant experience for both platform and sportsbooks.

The New York State Gambling Commission will also grade the advertising and promotional plants of its applicants (7.5 points maximum), while the ability to rapidly and efficiently bring bettors to the platform is worth 2.5 points. Further 2.5 points can be scored for the racial, ethnic, and gender diversity efforts showcased by the applicants and they can also net 2.5 points based on other factors concerning state revenue.

Tax Rate and Tribal Partnerships

The released RFA is detailing the scoring of the tax rates proposed by the platforms as well. Applicants must provide a tax rate of 50% or higher to reach the preferred scenario.

The applicants will be required to layout their revenue share plans with the state. As a result, it looks like the sportsbook willing to give back the largest share of its revenue to the state will end up being the book New Yorkers are stuck with.

Any applicant that is willing to share between 12.5% and 30% will receive 3 points, sharing between 30% and 40% scores 10 points, while any plan sharing between 40% up to 50% scores 15 points. Any applicant sharing 50% will get 20 points, and applicants will get additional points for each full percentage point above 50%.

The license term is also tied to the tax rate, with applicants sharing 50% or more potentially locking up licenses for 10 years while sharing between 30% and 50% can only lock up a license for five years, and anything under 30% will result in a license handed out for 3 years.

The NYSGC will also award five extra points to bidders that include a revenue-share agreement with one of the tribal gaming partners of the state. These extra five points cannot be used toward the minimum 60 points required for the technical score detailed above. In the case of a tie, the bidder proposing the higher revenue share will win the license.

Pricing Will Matter

All applicants will be ranked by their technical scores with the revenue share bonuses points rounding out their total score. After the ranking is established, the NYSGC will set the number of platform providers and sportsbook operators. The bids can be combined to get to a minimum of two platform providers and four sportsbooks.

In the end, things will come down to the final scores that include pricing as well. All bids that get chosen as winners must conform to the highest revenue share offered by a winning bid. If that is not the case, those bids get disqualified.

The commission also has the right to pick additional winners if that is in the best interest of the state. This will result in the remaining high-scoring applicants continuing to get licenses up until the math shows an increased return for the state.

Governor Andrew Cuomo has already budgeted in at least $500 million tax revenue annually once the market matures, which means that NY state could end up with several sportsbook operators.

NY state sports betting scheduling

The applicants are now allowed to submit questions that get answered by the NYSGC. All questions will be answered by July 27, after that the bidding process will start. The bidding round is scheduled to close on August 9 with the oral presentations starting on September 1 for those who are invited by the commission.

The finalists will be announced before December 6 and the NYSGC is planning to issue the first license in late December to early January according to the provided schedule.