New York legislators continue to make progress on a hopeful launch of their legal sports betting market in time for the 2021 NFL season. On Thursday, state legislators hit an important deadline and the New York State Gaming Commission (NYSGC) released a 29-page Q&A between potential sports betting applicants and the commission. The Q&A concerned the mobile betting Request for Applications (RFA) which was released on July 9.
Online sports betting became official after Governor Andrew Cuomo signed the state budget into law on April 19, 2021. Budget director Robert Mujica estimated that the governor’s state-run monopoly model will generate about $500 million per year in tax revenue for New York. The final monopoly proposal for sports betting came after the House of Representatives, Senate, and Assembly presented their own versions of an open market for sports betting.
What’s Next in the Legislative Process?
The Q&A released by the NYSGC was the first of two opportunities for hopeful sports betting platform providers to clarify the RFA. The next important deadline in this process is Tuesday, July 27 when the next set of questions is due by 3 PM EST for a second Q&A. Following that, the answers will be posted on August 2 and one week later, on August 9, the official applications are due by 4 PM EST.
Clarifications From the Q&A
One key point of clarification for potential bidders was the topic of collusion. Platform providers and operators are free to engage in multiple bids but they cannot craft bids in conjunction with one another to stay within a certain tax rate. New York is looking for at least a 50% revenue share, and it could potentially hit 60%. The Commission stated, “collusion among potential bidders concerning a submitted tax rate would be contrary to State interests, hence its prohibition.”
Bidders also asked for clarification on the handling of private information as the bids would include sensitive details they do not want to be shared. The Commission said that “confidentiality among applicant partners should be addressed among such parties.” If DraftKings and FanDuel are bidding in conjunction, for example, they will need to handle the process of keeping sensitive information private. The NYSGC clarified that operators will be allowed to swap platforms but only if it benefits the state financially.
Potential providers asked for clarification on the bid scoring process, but the NYSGC failed to provide significant insight. “There is no publicly available list and scoring criteria beyond those set forth within the RFA.” The RFA lists a value for certain ranges; for example, a revenue share between 40% and 50% would add 15 points to a bid. The NYSGC also stated that the operation of a New York casino will not be an automatic plus as “an applicant would need to demonstrate that its Application is enhanced by such affiliation to impact scoring evaluation.”
The NYSGC did not offer any sort of clarification regarding the future renewal process. It is unclear whether the winning bidder would need to pay an additional $25 million licensing fee or repeat the RFA process in order to be renewed, and this could be a significant sticking point as providers will want to know what the future of sports betting in the state of New York looks like prior to finalizing their bid.