New York Gaming Commission Offers Answers on Mobile Sports Betting

Posted on: April 25, 2021, 09:27h. 

Last updated on: April 26, 2021, 10:48h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

When New York picks its mobile sports betting platform providers, it’ll be the state’s Gaming Commission making those key decisions.

Mobile Betting NY Decision
New York Gov. Andrew Cuomo walks into a bill-signing ceremony in Buffalo, NY on April 16 wearing a Buffalo Bills facemask. On Friday, the New York State Gaming Commission released answers to more than 90 questions it received related to mobile sports betting, which Cuomo signed into law earlier this month. (Image: Darren McGee/Office of Governor Andrew M. Cuomo)

On Friday, the Commission released a 10-page document providing some answers to questions on the application process. State officials answered 92 questions from interested parties.

Earlier this month, New York state lawmakers approved a mobile sports betting concept in the annual budget. Under the plan, the state plans to award licenses to at least two platform providers that will work with at least four mobile sports betting operators. Gov. Andrew Cuomo hopes that as the market matures, New York will get upwards of $500 million in revenue annually.

The state will issue the licenses through a competitive request-for-applications (RFA) process.

The budget requires the RFA to be released by July 1. After its release, bidders will have 30 days to submit their applications, with the Commission expected to award licenses no more than 150 days after the final submission.

State Sen. Joseph Addabbo, D-Queens, who helped draft the mobile sports betting language, has said he would like to see operators taking bets by the Super Bowl.

Retail Sports Betting Deals Not Relevant

State law requires the servers for a commercially licensed casino to host the servers for a platform provider. There are four such facilities, all of which are in upstate New York. In the document released Friday, the Gaming Commission said only it will determine where servers are placed.

Currently, each of the four casinos has established relationships with sportsbooks. However, state officials said that will not have any bearing on its decision-making process.

Contracts between commercial casinos and operators of their in-house sports wagering will have no relevance to the RFA,” the Gaming Commission said. “The RFA is open to all qualified platform providers and operators, and awards will be made to the highest-scoring applicants.”

It also appears that the casinos will get a $5 million annual fee for hosting a provider’s server whether they actually do or not. In addition, platform providers would also be responsible for “reasonable and actual costs” related to the server, including any upgrades a casino has to make in order to house the equipment needed.

Placing the servers at the commercially licensed casinos is also how the state appears to be avoiding – or at least attempting to avoid – issues related to tribal gaming exclusivity zones. The state believes the bet will take place at the server and not the physical location of the bettor.

During the negotiations between Cuomo and lawmakers, the Oneida Indian Nation raised concerns that the mobile sports betting language would exclude them and therefore violate the gaming compact it has with the state.

The state, though, has said that platform providers who have revenue-sharing agreements with tribal nations would receive additional points toward their bid.

NY Gaming Commission Doesn’t Expect Future Expansion

Once the Gaming Commission receives all timely submissions, it said that it will determine how many licenses to award. It indicated that may be more than two if that helps “maximize revenue” for New York.

The revenue will be generated through a tax on the platform providers. According to the state, the tax rate will be set according to the highest rate offered by an applicant based on the number of providers the state awards.

However, don’t expect state officials to go back and award more licenses after the RFA. Per its interpretation of the law, the Commission told potential bidders that it can’t approve additional providers or operators in the future.

In addition, the Commission said the operators picked by the providers for their application must remain on it throughout the selection process. Also, the state will not let operators deduct any free play or promotions from their gross gaming revenue.

The Commission also expects to release an initial draft of mobile sports betting regulations by the time the solicitation comes out.

“Traditionally, for major rulemaking, the Commission has sought industry comment, pre-publication,” it said.

Those draft regulations will include whether state officials will require operators to use official league data to grade any wagers.