The New York State Gaming Commission has approved online sports betting licenses for nine operators ahead of the market’s expected launch in early 2022. [Image: Shutterstock.com]
The New York State Gaming Commission (NYGC) has awarded nine ten-year online sports betting licenses to nine operators, including BetMGM, DraftKings, and FanDuel.
Sports business reporter for Sportico, Eben Novy-Williams, took to Twitter Monday to list the winners and losers of the New York online sports betting race ahead of the market’s expected launch in early 2022:
On Monday, the NYGC approved licenses for two consortiums made up of nine gambling companies. Kambi Group, Rush Street Interactive (BetRivers/PlaySugarHouse), Caesars Sportsbook, PointsBet, Wynn Interactive, and Resorts World all received approval as one group. Meanwhile, FanDuel, Bally’s Corporation, BetMGM, and DraftKings comprised the other successful consortium.
Bet365, FOX Bet, and theScore Bet join the list of companies that failed to gain approval. Penn National/Barstool Sports and its partner Fanatics, the sports merchandise firm hoping to expand into betting, also didn’t make the cut.
Finish line in sight
New York lawmakers approved a $212bn budget in April that effectively legalized online sports betting via a state-operated market. The penultimate approval came when the NYCG on August 16 unanimously voted in favor of mobile sports wagering regulations.
the NYGC still has other approvals to rubber stamp
While there’s no timeline set in stone for online sports betting to launch in New York, state officials said in May they hoped to award licenses by January 1, which would allow bettors to wager on the 2022 Super Bowl. Although nine such licenses have now received authorization, the NYGC still has other approvals to rubber stamp before the market goes live.
Now, the nine operators approved in New York have to decide in which of the state’s four commercial casinos to store their servers, part of a law that also requires the operators to pay the chosen casino $5m per year. The next step for the NYGC is the approval of those server locations.
Big Apple of sportsbooks’ eyes
Judging from the reactions of some gaming company CEOs, receiving a mobile sports betting license in New York is paramount.
vital to ensuring nationwide leadership”
In a statement, BetMGM CEO Adam Greenblatt described gaining a New York footprint as “vital to ensuring nationwide leadership in sports betting and iGaming over time.”
Greenblatt’s counterpart at rival operator PointsBet USA, Johnny Aitken, deemed the license a major milestone for his firm in bringing its brand and technology to “one of the largest and most important markets in the United States”:
With its population of almost 20 million, New York represents a substantial market, plus it’s one of only 18 states to legalize mobile wagering so far. Financial services giant Macquarie predicts New York’s online sports betting market will hit $1bn in annual revenue, while the state posits annual tax revenue from the vertical will reach $493m by 2025.
Not deterred by high tax
The New York sports betting market is not for the faint of heart, nor short-term opportunists. That’s thanks to a $25m one-time licensing fee, and a state-imposed 51% tax rate on gross gambling revenue. That tax rate could drop to 35%, however, if the NYGC decides to license more sportsbook operators.
According to Macquarie, the median online sports wagering tax rate for the US is about 11%, with New Hampshire the only other state to share a 51% tax rate with New York.
Despite these factors, Macquarie still believes the market has one of the highest potentials in the US. “We believe New York represents one of the most attractive sports betting states given its population, wealth/income, and sports culture,” the financial services firm noted.