New York Reportedly Ready to Award Mobile Sports Betting Licenses
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On Wednesday, the New York Post reported that nine sportsbooks would win online sports betting licenses as early as this week. We should expect to see two so-called super bids in the state led by some of the most prominent national players in the sports betting industry. Also reported on Wednesday, New York hopes to launch its online market in advance of Super Bowl LVI on February 13, 2022, typically the most prominent sports betting event of the year.
Which Sportsbooks Will Receive Licenses in New York?
The first super bid is led by FanDuel Sportsbook’s parent company, Flutter, and includes DraftKings, BetMGM, and Bally Bet. This group is particularly notable as FanDuel, DraftKings, and BetMGM are the three leading sportsbooks in national market share. The other license is led by Kambi and includes Caesars, PointsBet, Rush Street Interactive, and Resorts World. Kambi is a business-to-business provider of sports betting services.
A third group led by Fanatics and Penn National/Barstool Sportsbook is expected to be on the outside looking in when the market first launches, but it could be added later. That Fanatics group is partnered with Jay-Z’s Roc Nation, a media conglomerate with strong New York ties. Fanatics has specifically identified New York as its hopeful first market for launch. Bids from Bet365, theScore, and FOX Bet have also been considered.
What Will be the Rules and Regulations in the State?
While it isn’t surprising to see so many parties interested in gaining market access in New York, they may not be as profitable as they are in smaller states where they are currently operational, at least right away. New York is expected to have one of the highest costs of doing business in the country, with a whopping 51% tax rate and a $25 million licensing fee. With those operational fees, the sportsbooks likely offer fewer promotions and bonus bets with a worse hold on specific markets. However, we should still expect some promotions as they are essential for customer acquisition and retention.
Why is New York Rushing to Launch?
You might notice a sense of urgency from New York politicians and businesses regarding the launch of the sports betting market. New Jersey became the first state in the country to top $1 billion in sports betting handle in September, and 20-25% of its market comes from New York residents. Connecticut launched its sports betting market on October 19, and an estimated 38% of betting volume in the first week came from the corner of the state bordering New York. The high cost of doing business does not outweigh the fact that New York has just over 19 million people, making it the fourth-largest state in the country.
What is the Expected Time Frame?
Over the summer, the New York Gaming Commission set a tentative target of Christmas Day for awarding bids to at least two sportsbook platform providers and four mobile sports betting operators. If the announcement of the winning bids does come next week, it would be about seven weeks ahead of schedule. Joseph Addabbo Jr., the Chairman of the Senate Committee on Racing, Gaming, and Wagering, was thrilled to hear the news of the expedited timeline for New York, saying the state could “begin to realize revenue, educational funds, jobs, and new funding streams for addiction programs and youth sports before the February Super Bowl.”
