New York to Name Winning Online Sportsbook Bids Monday
New York is expected to hand out two legal sports betting licenses on Monday, finally giving bettors in the state mobile options.
The road to mobile sports betting in the state of New York appears to be down to two supergroup bids.
After months of consideration, the New York State Gaming Commission seems to have all but settled on two winning bids to establish mobile sports betting platforms that would take the state's industry to the next level. It's expected that the lucky winners for the coveted New York online sports betting licenses will be revealed during a Monday meeting at 1:30 p.m ET.
While New York is an attractive market overall with 20-million residents (fourth-highest among the nation's states) and multiple teams in every major North American sport, some industry players don’t seem worried about potentially losing out on a license in the Empire State, including Penn National. An enormous 51 percent tax rate on revenues awaits the winning bidders. Upon maturity, that tax rate could land between 50 percent and 58 percent, depending on the number of vendors that enter the market.
But New York's mobile scene is still expected to be massive. BetMGM, DraftKings, FanDuel, and Bally Bet combined forces to become one of the two supergroup bidders. The group's study led to an estimate of $600 million in gross gaming revenue during the first full year of mobile sports betting in New York, before increasing to $1.3 billion annually by the end of Year 3.
The Winners
Two groups are expected to be granted the right to offer legal mobile sports betting in the state right now, according to the New York Post. Beyond the aforementioned first group, there's also a second group of Kambi, Caesars, Wynn Interactive, and PointsBet.
There were a reported six bids initially for two licen. The commission originally had until December 6 to make its decision, but the group showed some urgency with the launch and expansion of the state's underwhelming retail-only sports betting industry.
“In my opinion, the gaming commission was on time or slightly ahead of its statutory schedule for mobile sports betting decision-making,” said Sen. Joseph Addabbo Jr. in a recent interview. He's the biggest cheerleader for New York sports betting expansion.
Curiously Absent
The four other bids considered during this round were all from big names.
Perhaps the most high-profile one came from a group consisting of New York state icon Jay-Z, Fanatics, and Barstool’s Penn Sports Interactive. It looks like that trio might have finished a close third in the bidding process, and the group is still technically in the running ahead of Monday's announcement.
“As far as we know, the process is still ongoing,” said a Fanatics spokesperson.
Bet365 was another of the seemingly unlucky four with applications that were strongly considered, but the sportsbook will likely miss out on a license during this round. FOX Bet and theScore Bet were the others that filled out the necessary applications, but those two apparently failed to advance.
Ramifications
New York finally modernizes and significantly upgrades its legal sports betting platform starting Monday. The state goes from retail-only facilities in upstate New York to one that features mobile options, thus letting casual bettors in urban centers participate from the comfort of their homes.
Bettors in New York reportedly represent 20 to 25 percent of New Jersey's off-the-charts monthly sports betting handle, and they're already contributing to Connecticut's new sports betting scene.
“New York has the potential to be the largest sports wagering market in the United States, and by legalizing online sports betting, we aim to keep millions of dollars in tax revenue here at home, which will only strengthen our ability to rebuild from the Covid-19 crisis,” former Governor Andrew Cuomo said in April.
“Mobile sports betting we think could raise $500 million dollars. Many states have done it,” he added.
