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Nine Operators, Including ‘Super Bid,’ Awarded NY Mobile Sports Betting Licenses

DraftKings, FanDuel, BetMGM, and Kambi make the cut; Bet365, Fanatics, and Barstool shut out

Matt Rybaltowski by Matt Rybaltowski
November 8, 2021
in Regulation
(Vincent Carchietta/USA Today)

(Vincent Carchietta/USA Today)

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The New York Gaming Commission (NYGC) recommended the issuance of nine mobile sports wagering operator licenses on Monday, confirming that the industry’s largest names will likely gain entry into the market when the state intends to launch online sports betting early next year.

Of the nine winners, a “super bid” featuring industry heavyweights FanDuel, DraftKings, BetMGM, and Bally Bet received conditional licenses from the commission at Monday’s meeting. Another consortium, led by sports betting B2B technology provider Kambi, also made the cut. The consortium consists of five operators: Rush Street Interactive, Caesars Entertainment, PointsBet, Wynn Resorts, and Genting, which owns Resorts World.

Industry stakeholders had a strong inkling about the winners of the hotly contested bidding process last week, when reports surfaced that the nine companies had emerged from the pack. The only suspense on Monday was if the commission would add a 10th bid recommendation. Rumors swirled last week that Fanatics, Penn Sports Interactive (Barstool Sportsbook), and Bet365 all remained in the running for the 10th recommended bid. In the end, none of the three were selected by the commission.

The commission is targeting a launch date early next year, before the kickoff of the Super Bowl.

“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,” BetMGM CEO Adam Greenblatt said in a statement. “We would like to thank the New York Gaming Commission as well as congratulate them for keeping to their timetable.”

Other comments from top gaming executives: 

  • PointsBet — “Today’s news of being recommended by the New York State Gaming Commission marks an exciting moment for us at PointsBet. Having the potential to secure market access to New York state – expected to be one of the largest and most important markets in the U.S. — represents another major milestone for our company, our brand, and our technology,” PointsBet CEO Johnny Aitken said. “We are thankful to the Gaming Commission for this recommendation and believe it speaks volumes to PointsBet’s reputation and ability to deliver an unrivaled, world-class experience. We eagerly await the official opportunity to leverage our exclusive sports betting partnership with NBC Sports and introduce the nation’s premier sports betting product to the countless passionate, sports-loving New Yorkers.”
  • Caesars Entertainment: “We’ve been looking forward to the opportunity to bring mobile sports betting to New York. With more than 19 million people, New York will be the biggest mobile sports betting market in the country, and we feel we are uniquely positioned to bring an incredible product to that market,” Caesars Entertainment CEO Tom Reeg said.
  • Wynn Interactive: “We’re excited that the New York State Gaming Commission has approved our request for application for online sports betting,” Wynn Interactive CEO Craig Billings said. “New Yorkers represent a significant portion of the Wynn Las Vegas and Encore Boston Harbor databases, and we look forward to giving those customers more ways to earn and use Wynn Rewards. We also look forward to meeting and engaging with new customers in the state via WynnBET.”

The NYGC received a statutory mandate to award mobile sports betting licenses to a minimum of two platform providers and four mobile sports betting operators. In August, the commission received six applications for potential licensure, featuring 14 operators in total. An evaluation committee only advanced three of the six as qualified applicants, commission Executive Director Robert Williams said Monday. Those three applicants were Sports Information Services (Kambi), Betfair Interactive US (FanDuel), and Hillside New York LLC (Bet365).

“The evaluation committee conducted a fair, comprehensive, and impartial evaluation of all applications,” Williams said at Monday’s meeting.

The Kambi-led consortium, which submitted an initial preferred tax rate of 64%, received the highest total score from the committee, the commission disclosed Monday. With four platform providers and five operators, the committee satisfied the statutory mandate by awarding the first bid to the Kambi group.

The evaluation committee then proceeded to an additional phase of license evaluation, Williams explained. There, the committee had the option of recommending additional licenses to qualified applicants if it determined that their entry into the market would be in the “best interest of the state,” he added. In conducting the review, the committee determined that the addition of the FanDuel-led consortium would result in a higher aggregate revenue for the state on a long-term basis. At this stage, the committee eliminated Bet365 from the bidding process.

Under a final tax rate matrix established by the commission last month, the nine operators will be assessed a tax rate of 51% on the company’s online sports betting gross gaming revenues in the Empire State. Had the Kambi-led group received exclusivity on the market, the final rate would have remained at 64%.

 

(Source: New York Gaming Commission)

Official data requirements

New York published a Notice of Proposed Rulemaking in the state register on Sept. 1 regarding the state’s comprehensive proposed mobile sports wagering regulations. When a 60-day public comment expired on Nov. 1, the state received seven comments from industry stakeholders. An amended version of the proposed rule text, none of which received substantial changes from the first incarnation, was released to the public on Nov. 3, according to a memo from Edmund Burns, general counsel for the commission.

In total, the state received seven comments, including one from sports betting data provider Sportradar. The proposal from Swiss-based Sportradar urged the commission to modify the regulations to enable licensees to use an alternative data source, in lieu of official data, if the platform could pass certain suitability tests. In response, the NYGC modified the provision to allow operators to use alternative data sources, at the discretion of the commission (see below, amended parts in bold).

Official data from a sports governing body shall be used to determine all sports wagers, unless a skin (through its data provider vendor, if applicable) demonstrates to the satisfaction of the commission that sports wagers for such sports wager type may be determined reliably, accurately and timely by an alternative data source. If the commission determines that an alternative data source for a type of wager is acceptable, then each skin shall be permitted to use such alternative data source to settle such wager types. See Racing, Pari-Mutuel Wagering and Breeding Law section 1367(14);

–§ 5330.8. Internal controls for mobile sports wagering, New York state mobile sports wagering proposed

The commission unanimously approved the proposed rules that allow for mobile sports wagering through servers located at gaming facilities throughout the state.

Mobile sports betting is projected to generate $500 million in annual tax revenue for New York state at market maturity, according to estimates from former Gov. Andrew Cuomo’s administration. Its size alone should make New York one of the largest sports betting markets in the nation.

The proposed mobile sports betting rules will likely be published in the state register on Nov. 24, Williams indicated. Of the nine operators that received license approval on Monday, seven were granted additional conditional licenses as platform providers. Under New York state law, platform providers will be assessed a fee of $25 million for entry into the market.

“With New York moving closer to the goal line to witness its first mobile sports bet, we must remain focused on providing a premier product and giving New Yorkers the best mobile sports betting options in order to effectively compete with neighboring states like New Jersey,” New York State Sen. Joseph Addabbo Jr. said in a statement. “Of utmost importance remains the timeframe for the servers that validate the mobile bets to be up and running, ready to take New York’s first mobile sports bets in January and in time for the 2022 Super Bowl.”

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Matt Rybaltowski

Matt Rybaltowski

Matt is a veteran writer with a specific focus on the emerging sports gambling market. During Matt's two decade career in journalism, he has written for the New York Times, Forbes, The Guardian, Reuters and CBSSports.com among others. In his spare time, Matt is an avid reader, a weekend tennis player and a frequent embarrassment to the sport of running. Contact Matt at matt@usbets.com.

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