NY Meets Target Of Launching By Super Bowl As Four Sportsbooks Get Green Light

The post NY Meets Target Of Launching By Super Bowl As Four Sportsbooks Get Green Light appeared first on SportsHandle.

Shortly after New York Gov. Kathy Hochul delivered her State of the State address earlier this week, the New York Gaming Commission confirmed Thursday that four mobile sports betting operators will be authorized to begin accepting wagers this week.

The four sportsbooks, Caesars, DraftKings, FanDuel, and Rush Street Interactive, have have been approved to commence online sports wagering operations in New York as soon as 9 a.m. ET Saturday, the commission said in a statement. Those four satisfied all statutory and regulatory requirements necessary to accept and process mobile sports wagering activity, the commission noted.

Over the last several months, New York state Sen. Joseph Addabbo has strongly urged state and industry leaders to complete the requisite work needed to launch mobile sports betting before the Super Bowl. Former New York Gov. Andrew Cuomo helped broker a deal to include online sports wagering in the 2022 Fiscal Year budget in April. But Cuomo was succeeded by Hochul in August after the former governor left office amid multiple sexual harassment allegations.

Addabbo, who serves as chair of the Senate Racing, Gaming and Wagering Committee, authored a comprehensive sports betting bill in the New York Senate.

“I give a lot of credit to the commission because they had to weather the storm from one governor to the other,” Addabbo told Sports Handle Thursday. “They are slightly ahead of schedule.”

In November, the New York Gaming Commission awarded conditional licenses to nine mobile sports betting operators and eight platform providers. A platform provider manages hardware, software, and data networks for facilitating the mobile sports wagers. The operators are the front-facing companies that actually accept the wagers.

Fear of missing out

Four operators from a so-called “super bid” consisting of FanDuel, DraftKings, BetMGM, and Bally Bet were among those to get conditional licenses. All four companies gained licensure as both platform providers and operators.

Another consortium, led by sports betting technology provider Kambi, contained bids from Rush Street Interactive, Caesars Entertainment, PointsBet, Wynn Resorts, and Genting, which owns Resorts World. Of those companies, Kambi, Caesars, Wynn, and PointsBet were also issued conditional licenses as platform providers.

Before leaving office, Cuomo projected that online sports wagering could bring New York $500 million in annual tax revenue when the market reaches maturity. More immediately, Cuomo’s administration had projected that mobile sports wagering would generate approximately $357 million in tax revenue to the state for Fiscal Year 2023, which begins on April 1.

Addabbo did not want to come up with a definitive prediction for how much the New York market would generate during the NFL playoffs or in Year 1 altogether. But he is optimistic that the state could surpass its Northeast peers, most notably New Jersey and Pennsylvania, based on the size of the market.

Comments from NY @SenJoeAddabbo on the launch of mobile sports betting as early as Sat: “I give a lot of credit to the Commission because they had to weather the storm from one governor to the other. They are slightly ahead of schedule.” NY initially targeted the SB for launch. pic.twitter.com/8AAQPyADQ7

— Matt Rybaltowski (@MattRybaltowski) January 6, 2022

According to industry estimates, approximately 20% of New Jersey’s sports betting handle comes from bettors residing in New York. Hardened sports bettors have gained a reputation for traveling across the George Washington Bridge to place a wager on a New Jersey sportsbook app before immediately returning to the New York City metropolitan area.

“All I’m saying is the potential for New York is tremendous. It can realistically eclipse New Jersey in a short period of time,” Addabbo told Sports Handle.

Based on a final tax rate established by the commission, New York will impose a 51% tax on the online gross gaming revenue (GGR) of each mobile sports wagering operator. During a webinar on Thursday morning, Brendan Bussmann, a partner at Global Market Advisors, took New York to task for what he described as “an exceptionally high tax rate.” While DraftKings also pays a 51% tax on its online GGR in New Hampshire, the company has exclusivity on the mobile sports betting market in the Granite State. For the moment, the 51% tax is the highest in the nation for online sports betting.

Adjusting on the fly

Bussmann also criticized the commission for imposing a regulation that prevents sportsbook operators from writing off promotional activity. Amid the intensely competitive fight for customer acquisition, sportsbooks have been able to distinguish themselves by offering clever promotions. In response, Addabbo noted that all aspects of mobile sports betting will have to be “evaluated at some point” to see how the state could improve the product for New York.

Some New York online sports betting RFA breakdowns on promotion limitations including what constitutes a “risk-free bet” pic.twitter.com/rIuCs2Etph

— Ryan Butler (@ButlerBets) July 9, 2021

One aspect of the market that will be closely watched in the nation’s fourth-biggest state involves the prevalence of in-game betting. Sportradar, a leading sports betting data provider, provides in-game sports data feeds to the majority of New York sportsbook operators.

“After much anticipation, it’s fantastic to see that mobile sports betting products will finally be available to the citizens of New York. I have a lot of friends who’ll be relieved that they no longer have to make the trek to New Jersey on football Sundays,” Sportradar U.S. Head of Government Affairs Brandt Iden told Sports Handle. “Although the market will need to mature further to truly assess the impacts of such a high tax rate on operators, this is a great first step and the NYGC should be commended for their commitments to expedite a launch.”

Addabbo, meanwhile, is reasonably confident that the other five operators will be up and running before the Super Bowl.

“Look at their expertise and their experience in the industry,” he told Sports Handle. “Speed-to-market was an important aspect for us in New York. They see it, too, because the Super Bowl is the big show.”

The post NY Meets Target Of Launching By Super Bowl As Four Sportsbooks Get Green Light appeared first on SportsHandle.