New York State’s Gaming Commission has lifted the lid this week on which companies have been recommended to offer mobile sports betting in the state. The nine that made the cut comprise BallyBet, BetMGM, Caesars, DraftKings, FanDuel, PointsBet, Resorts World, Rush Street Interactive and WynnBet.
A number of operators saw their bids fall short. They included Barstool Sportsbook, bet365, Fanatics, and Fox Bet.
The naming of the nine licensees now gives New York the opportunity to compete on a more even footing with neighboring New Jersey which enabled mobile sports betting from the off. New York sports bettors, meanwhile, have been confined to making physical bets at upstate casinos, with Resorts World Catskills offering the nearest option for those prepared to make the two-hour drive.
Once up and running, sports wagering in New York could generate around $1bn a year in revenue, which would net the state circa $493m in tax dollars. For operators, however, the challenge to turn a dime looks ominously difficult thanks to a controversially high tax rate of 51%.
The costs don’t end there. Operators will have to pay a one-off $25m licensing fee and, upon securing one of the state’s four casino locations to host their servers, will be required to pay said location $5m annually for the privilege.
Soo Kim, Chairman of Bally’s Corporation’s Board of Directors, responded to the news, saying: “Bally’s is pleased to have been awarded an online sports betting license from the State of New York – the most populous state to enable OSB – and would like to thank the New York State Gaming Commission for including Bally’s in this exciting endeavor.
“This license advances our overall market footprint and marks the latest milestone on our journey towards becoming the leading omni-channel gaming provider in the US. Above all, we look forward to providing New York’s devoted fan base with engaging, best-in-class, sports betting experiences.”
Wynn Interactive CEO Craig Billings said: “We’re excited that the New York State Gaming Commission has approved our request for application for online sports betting. 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.”
Tom Reeg, CEO of Caesars Entertainment, noted: “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.
“We’re pleased to have been recommended for a license by the New York State Gaming Commission, and we thank Governor Kathy Hochul, the State Legislature, and the NYSGC for their continued leadership in making mobile sports wagering available to the Empire State.”
PointsBet US CEO Johnny Aitken described the news as an exciting moment for the company, adding: “Having the potential to secure market access to New York state – expected to be one of the largest and most important markets in the United States – represents another major milestone for our company, our brand, and our technology.
“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.”
Analysis: New York should be one of the biggest and most profitable markets in the US. It has a huge, sports-hungry population with an incredible appetite for sports wagering, as exemplified by the number of punters spilling over into New Jersey every day to place a bet. But with that 51% tax rate in place this is not going to be the land of plenty for those nine brave operators named above. Instead, we can expect a lot less in the way of marketing, promotions and similar costs as they look to squeeze every last drop of available revenue from margins that right now look slimmer than cigarette paper.