New York Gaming Commission Calls For Mobile Sportsbook Providers

On Friday afternoon, the New York State Gaming Commission (NYSGC) issued a much-anticipated Request for Applications (RFA) on operators interested in offering mobile sports betting in the state. The Empire State’s gaming ombudsman released a 130-page mobile sports betting RFA document – 8 days after it was due, as it had a mandatory state deadline of July 1st.

Regardless, now that the NY gaming regulator has finally issued the RFA, the Empire State has formally entered into a competitive bidding process for the selection of mobile sports betting providers. The Gaming Commission has 30 days (until August 9th) to receive applications for at least two platform providers and four operators bidding for a spot to launch mobile sports betting in New York. From there, the gaming watchdog will have another 150 days, with a deadline of January 6th, 2022, to select the winners of the bidding process.

Currently, however, there is no tentative debut date for mobile sports betting in the Empire state. But then, it is expected that the finalists will have been selected before December 6th in time to award licenses in NYSGC’s follow-up meeting after the conclusion of the RFA process. Along with the RFA, the NY gaming ombudsman published the regulations that the applicants should follow and proposed a couple of regulatory changes as well.

Betting Application Requirements for Sportsbook Operators and Platform Providers

In the released regulations, it appears that New York’s gambling watchdog is particularly keen on channeling players from the black market. In their applications, operators have been instructed to outline the steps they will take to convert New Yorkers who bet on offshore sportsbooks. Potential operators applying for the mobile sports betting ticket have also been required to highlight how they plan to advertise their sportsbooks and provide a marketing budget estimate.

Per the NYSGC regulations, mobile sportsbook operators are expected to ready themselves to take the following responsibilities should they be selected:

Receive and register wagers
Generation of tickets for the wagers
Computing the bets and payoffs
Keeping updated records of all wagering activity
Generation and submission of reports to the NYSGC
Maintenance of the state’s integrity platform
Creation of secure remote access channels for the sportsbook platform
Holding all the transactions for a 7-year period
A wallet that players can use on all sportsbooks powered by one of the licensed platforms

Besides, a platform bidding for licensing in the Empire State can also double up as a sportsbook operator.

A Point-Based Selection Process for Mobile Sports Betting Operators

One of the aspects of the RFA process that stands out the most is the fact that the bidding parties will be ranked via a 75-point technical factor criteria. Only applicants who score at least 60 points (out of the possible 75) will have passed the screening process, and the winners shall be selected among the qualified bidders. The technical factor benchmarks for this point-based ranking for both platform providers and/or sportsbook operators include:

Sports betting expertise – 25 points
Integrity, safety, and sustainability – 20 points
Previous industry experience – 15 points
Marketing strategy – 7.5 points
Customers’ conversion capability – 2.5 points
Diversity efforts (racial, ethnic, and gender) – 2.5 points
Other factors related to New York’s revenue – 2.5 points

Additionally, bidders in the RFA are also required to “provide a tax rate that is fifty (50) percent or greater for its Preferred Scenario”. By fulfilling that requirement, the applicant will automatically earn 20 pricing points on its scorecard, along with a 10-year licensing term. Moreover, bidders who provide a tax rate of more than 50% will receive an extra pricing point for every full percentage figure past the 50% threshold.

On the flip side, should a bidder select a tax rate lower than 50%, the number of pricing points received will be affected, and so will the license term the applicant will receive in the end. A tax rate of 12.5% – 30%, 30% – 40%, and 40% – 50% will only earn 3, 10, and 15 pricing points respectively. Any tax rate less than 12.5% will get no pricing point. Furthermore, applicants with less than 50% for the tax rate will also have to outline how they plan to share revenue with the state.

As for the number of licensing years, bidders with taxation rates of up to 30% will receive a 3-year license, whereas a 30% to 50% tax rate will be accompanied by a 5-year license. The gaming ombudsman will also add 5 points for an operator who will have a revenue-sharing agreement with a tribal gaming partner in New York. These 5 points for a tribal gaming partnership will hold as much weight as the pricing points for an extra 10% on top of the 50% tax rate threshold preferred by the NYSGC.

After tallying the points, winners will be selected, with more weight given to the pricing points in case there’s a tie between two applicants. When winners are finally picked, there will be room for one more applicant if the state sees an opportunity to collect more revenue with the extra bidder.