Now that the RFA for mobile NY sports betting is live, the fun part can start: speculating on potential bids.
The long-awaited process started last Friday, eight days late. The biggest question was how bids would be scored and how much emphasis would be put on the revenue share.
Gov. Andrew Cuomo made it clear throughout the process he wants at least 50% of all revenue made by online New York sportsbooks to go toward the state. There was even a rumor the delay had something to do with Cuomo making sure that was emphasized.
Shooting for the moon on revenue
That would not be entirely surprising since Cuomo’s office wants an eye-popping and unlikely $500 million in annual sports betting revenue.
A 50/50 revenue share for sportsbooks could be tough. But given New York’s status as a US sports betting crown jewel, there should be plenty of interest.
And those bidders – at least one platform provider and sportsbook per bid – are incentivized by the scoring system to go even higher. Bids will receive an additional point for each revenue share percentage point over 50%.
Iden: mobile NY sports betting shares could top 60%
Brandt Iden, a former Michigan legislator who helped legalize iGaming and sports betting and is now head of government affairs at Sportradar, expects some big proposals in New York. That’s according to his comments on a recent National Council of Legislators from Gaming States panel:
“I think it’s interesting, this RFP process that’s out there, we’re going to see some tax rates north of 55%, probably 60%. I think it’ll be insane.”
Even with the majority of revenue going to the state, Iden is not sure how New York will hit $500 million annually from sports betting alone:
“If you want to get to $500 million, you should have thrown iGaming into the discussion.”
Big proposal could limit NY sports betting market
One thing New York sports bettors might not want to see is a huge proposal from companies combining for a bid.
The law requires at least two platform providers and four sportsbook brands to launch. The selection process does allow for more winners, though, as long as it is economically positive for the state.
But in order to get a mobile NY sports betting license, bidders have to accept the highest proposed revenue share by a winning bid. That means one bidder with two platforms and four skins could enter a bid that prices others out of the market in order to keep competition low.
Super Bowl launch could be a challenge
After all, sportsbooks cannot deduct promo costs from revenue to lower the cut they send to the state.
It will be a while before any specifics are known about the bids. Based on the schedule in the RFA, the winners are unlikely to be announced and licensed until mid-December at the earliest.
The next important date in the process is July 22. That is when the first round of answers to questions on the RFA (due this Friday) will be published.