New York’s Mobile Sports Betting Okayed in the FY 2022 State Budget

The Empire State continues to make steady strides towards the launch of state-run mobile sports betting after Governor Andrew Cuomo and his legislative team reached a tentative agreement for the Fiscal Year 2022 state budget. The New York State budget, which Gov Cuomo announced last week, provides more insight into the economic approach and how mobile sports betting will be rolled out to state residents.

Now, what remains after a few misfires in the past, is a vote by the General Assembly to officially give the budget a thumbs up by voting it in through a bill – Senate Bill 2509 and the games will begin. From the look of things, New Yorkers could be legally placing sports wagers on mobile by September, just in time for the action-heavy NFL season.

What Will the Mobile Sports Betting Process in New York Look Like?

To start things off, the New York State Gaming Commission will be issuing an RFP (Request for Proposal) to launch the competitive bidding process for operators by July 1st this year.  After issuing the RFP, interested operators will be given a 30-day application window to place their bids. Upon receiving the last RFP applications, the Gaming Commission will then have 150 days to pick two platform providers.

The mobile sports betting platform providers selected will have the authorization to subcontract at least four ‘skins’ (mobile betting contracts) combined to other gaming providers. Operators who will submit their proposals are required to host the server and equipment of their mobile sports betting platform within a land-based casino facility licensed by the New York State Gaming Commission. Further, these RFP operator applicants must also name their proposed skins in the said applications.

With that in mind, some of the mobile sports betting we should expect to have a presence in the Empire State’s mobile sports betting market upon launch include household names like FanDuel and DraftKings. Other up-and-coming sportsbook operators like BetRivers and Bet365 will also be showing up to the party, at least according to recent reports of cooking agreements and affiliations with upstate casinos.

In the budget bill, there’s also a clause that gives room for the New York Gaming Commission to select additional providers should it deem that awarding more licenses is “in the best interest of the state.”

What About the Money?

The selected platform providers will purchase a one-time New York Gaming Commission license at $25 million. On top of that, there’s also a revenue-sharing agreement between the Empire State and the chosen providers where the state will be receiving at least 50% of the GGR (gross gaming revenue).

Furthermore, the providers will be required to pay the housing brick-and-mortar casino a $5 million annual fee for hosting their servers unless there’s already an affiliation between the casino and the provider.

As has always been the case, the proceeds from the mobile sports betting activity in the state will be channeled towards building the state economy and social responsibility programs. For starters, about $6 million every year will be channeled towards an addiction program. Another $5 million will be directed to youth sports, and a bigger piece of the proceeds will be set aside for education.

Based on projections in the budget, the Empire State expects an annual revenue in the range of $500 million upon market maturity.

Have the Tribes Been Left Out of the Deal?

To the dismay of some, federally recognized Native American Tribes in New York, off-track betting venues and racetracks seem to have been cut out of Gov. Cuomo’s sports betting deal. The only mention of Indian tribes in the arrangement is a clause that proposes extra points for applicants in the RFP selection process who will have a revenue-sharing agreement with a tribal gaming operator.

Following Gov. Cuomo’s state budget announcement last week, on April 5th, The Oneida Indian Nation released a statement calling out the state government for cutting them out of the deal. According to the Oneida Native American tribe, the new mobile sports betting arrangement infringed the state-tribe ten-county gaming exclusivity zone. The tribe went ahead and warned that it would, in turn, not honor the $70 million annual revenue-sharing agreement it has been having with the Empire State as retaliation, pending regal action.

Part of the statement from the Oneida Nation read:

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The Oneida Indian Nation offered a compromise on mobile sports betting that addressed all issues related to its exclusivity. This compromise was approved by the State Senate and Assembly and supported by Indian and commercial casinos in New York. It appears that the State nevertheless is rejecting that compromise.We will review the final language, but we have serious legal doubts about this legislation and the impact it will have on Central New York. We regret that the State is not trying to resolve these issues cooperatively, and we remain open to discussing an outcome that works for the State, the Nation, and our entire region.