Despite hundreds of blacked-out pages, there is still some new information in the redacted mobile NY sports betting bids released Friday by the New York State Gaming Commission.
For one thing, we know the four-company consortium of Bally Bet, BetMGM, DraftKings Sportsbook and FanDuel Sportsbook does not want any other operators in the market if it wins.
The other large consortium including Kambi and Caesars, meanwhile, would welcome competition, according to details in its redacted application.
Online NY sportsbooks are targeted for a January 2022 launch should the winners be chosen near the due date of Dec. 6. The NYSGC could rule on the six bids earlier than that, though, which could lead to a launch during the NFL regular season.
FanDuel-led bid includes NY sports betting study
The FanDuel-led consortium included a study by Frontier Economics to help understand its thinking on the market.
To sum it up: more than four sportsbooks at a 50% tax rate is unsustainable.
Operators likely would reduce their promotional and marketing budgets with more than four sportsbooks at such tax rates.
Breaking down the estimates
Frontier provided central-case estimates for the first five years of sports betting revenue. Even the first-year estimate should make outgoing Gov. Andrew Cuomo plenty happy:
- First year: $585 million
- Second year: $929 million
- Third year: $1.4 billion
- Fourth year: $1.6 billion
- Fifth year: $1.8 billion
Remember, Cuomo’s model called for eventually $500 million a year in mobile betting revenue to the state.
Jeff Gural, owner of the Meadowlands and Tioga Downs, would likely agree with Frontier’s takes. He told LSR he did not bid because no one will make any money at that kind of tax rate.
All would serve as platform providers
Bally Bet, BetMGM, DraftKings Sportsbook and FanDuel Sportsbook would operate on their own technology in New York.
That means each operator would pay the $25 million platform provider fee, bringing in $100 million in upfront license fees.
Another NY sports betting superbid welcomes competition
Unlike the FanDuel-led bid, Kambi and its five proposed sportsbook partners are happy to see others in the market at a higher tax rate:
“Our consortium’s Pricing Matrix enables the State to include up to nine operators at a 51% tax rate with the State making a projected $892.5 million in sports wagering taxes per year with nine operators versus a projected $808 million in sports wagering taxes per year with the minimum number of four operators.”
This bid also includes four platform providers for $100 million in upfront license fees:
- Caesars Sportsbook
- Kambi, which would host Rush Street
- PointsBet, which would also host Resorts World
- WynnBET
Fanatics Sportsbook flaunts database, aggressive budget
In the other Kambi-led bid with Penn National and Fanatics, most of the details about the just-born Fanatics Sportsbook were redacted.
The company did leave some details about its marketing plans though. Its database includes 81.7 million sports fans, 54.2 million of which are paying customers. It will use that robust database to find new bettors others “will not be able to reach cost-effectively.”
Fanatics also noted an aggressive budget and acquisition model. The plan permits “aggressive expansion” and will use its position as a merchandiser to attract and acquire new customers.
Fanatics will also include its FanCash into its promotional programs.
Three bids have tribal partners
The three bids with multiple operators listed include tribal partnerships that should net them an additional five points toward their overall NYSGC scores:
- Bally Bet/BetMGM/DraftKings/FanDuel are partnered with the Seneca Indians.
- Caesars/Kambi/PointsBet/Resorts World/Rush Street/WynnBET are partnered with the Oneida Indians and Saint Regis Mohawk Tribe.
- Barstool/Fanatics/Kambi are partnered with the Saint Regis Mohawk Tribe. The agreement calls for 5% of revenue with a $2.5 million minimum annual guarantee.
