Mobile NY Sports Betting Bidding Details Finally Released

Posted on July 9, 2021
1
Written By on July 9, 2021

Bidding details for mobile NY sports betting finally dropped mid-afternoon Friday – eight days after they were due.

The request for applications begins the 30-day period for hopeful New York online sportsbooks to bid for one of the minimum two platform provider and four sportsbook licenses. The New York State Gaming Commission then has 150 days to select the winner, which is now a deadline Jan. 6 after the delay.

There is no concrete launch date for mobile betting in the RFA, though. Finalists will be picked before Dec. 6 with licenses awarded at the next commission meeting.

The NYSGC also released proposed mobile betting regulations attached to the RFA.

Mobile NY sports betting application requirements

Applying for the NY betting licenses will be the hopeful platform providers. There are nine designated services a platform must handle according to the proposed regulations:

  • Take and register bets.
  • Generate tickets for the bets.
  • Compute wagering and payoffs.
  • Keep records of all betting activity.
  • Generate and/or submit reports required by the commission.
  • Maintain the integrity of the platform.
  • Create a secure method for remote access to the platform.
  • Maintain all transactional data for seven years.
  • Establish a wallet that can be used on all sportsbooks associated with that platform.

The applying platform can also be one of the sportsbooks (called operator in the RFA.) Most of the information about the operators would be learned through the licensing process. Additionally, the applicant must break down the ad and promo plans of their sportsbooks.

Along with an estimated marketing budget and advertising plans, the platform has to outline the efforts that will be taken to convert players from offshore sites.

RFA scoring details

Bidders will have to get a minimum technical factor score of 60 points out of the possible 75 to be considered a qualified applicant:

  • Sports betting expertise, both by platform and sportsbooks: 25 points.
  • Integrity, sustainability and safety of the platform: 20 points.
  • Past relevant experience for both platform and sportsbooks: 15 points.
  • Advertising and promo plans: 7.5 points.
  • Ability to “rapidly and efficiently” bring bettors into the platform: 2.5 points.
  • Racial, ethnic and gender diversity efforts: 2.5 points.
  • Other factors concerning state revenue: 2.5 points.

Mobile NY sports betting tax rate

Applicants “must provide a tax rate that is fifty (50) percent or greater for its Preferred Scenario,” according to page 28 of the RFA. Yet that changes in the scoring for the pricing category where applicants must lay out their revenue share with the state:

  • 12.5% up to 30%: 3 points.
  • 30% up to 40%: 10 points.
  • 40% up to 50%: 15 points.
  • 50%: 20 points.

Applicants will get an additional point for each full percentage point above 50%. The license term is also tied to the tax rate: three years for up to 30%, five years for 30% to 50% and 10 years for 50% and up.

Tribal partnership adds 5 points

The NYSGC will award five points to bidders that include a revenue-share agreement with one of the state’s tribal gaming partners.

That partnership is given the same weight as an extra 10 percentage points in revenue share based on the pricing scores. The five points cannot be used toward the minimum 60 points for the technical factor score.

The technical score, pricing score and tribal revenue share bonus will be added together to find the winning bidders. In the event of a tie, the bidder with the higher revenue share wins.

Pricing ultimately makes the bid

All qualified applicants will be ranked by their technical scores and their tribal revenue share bonus points.

The commission will then establish how many platform providers and operators there will be. Any number of bids can be combined to get to the minimum of two platform providers and four sportsbooks.

Ultimately, though, it comes down to the total scores that include pricing. If the same bids do not top the chart after pricing is added in, the first step of establishing how many platforms and operators will be redone using the total score.

Remember: all winning bids must conform to the highest revenue share offered by a winning bid. If not, those bids are disqualified.

So how many mobile NY sports betting apps could there be?

The process of picking a winner makes it sound like there will not be a thriving market of sportsbooks competing against one another in New York.

That might not be the case, though. The commission has the right to pick additional winners if it is in the best interest of the state. The state, of course, wants tax revenue – and Gov. Andrew Cuomo has budgeted at least $500 million annually at maturity – so there could be plenty of sportsbooks.

After winners are selected, the remaining applicants will be re-ranked based only on their technical factor score. The commission will do the math to see if the state will get more revenue based on the highest-ranked remaining bidder. If the state gets more money with the additional bidder, that bidder will get a license as well.

That process will continue with the next highest scoring bidder until the math no longer shows an increased return for the state.

Proposed regulation changes

Much of the 130-page RFA is actually the proposed regulation changes with mobile betting included.

There are a few noteworthy items:

  • Added is a note on bet rescission. A sportsbook can only rescind a bet under extraordinary circumstances and with prior written consent of the commission.
  • Promo costs cannot be deducted from revenue or added to a loss when calculating GGR.
  • Mobile operators must get promotions approved a minimum of 15 days in advance.

Schedule for mobile NY sports betting

The commission plans to issue its first license in December or January, according to the schedule provided in the RFA:

  • The first deadline to ask questions is next Friday afternoon. Those will be answered by July 22 followed by another chance for questions submitted by July 27. The NYSGC already answered 16 pages of questions.
  • Bidding closes at 4 pm Eastern Aug. 9.
  • Oral presentations can start Sept. 1, though those are not guaranteed for all bidders.
  • The commission will pick finalists before Dec. 6.
  • Bidders will be given a one-week period to amend their applications. Winners and licenses will be awarded at the next commission meeting.
Matthew Waters Avatar
Written by
Matthew Waters

Matthew Waters is a reporter covering legal sports betting and the gambling industry. Previous stops include Fantini Research and various freelance jobs covering professional and amateur sports in Delaware and the Philadelphia area.

View all posts by Matthew Waters
Privacy Policy