If they can make it there, they’ll make it anywhere. The opportunity to enter New York’s looming mobile sports betting market has big-name operators jockeying for position, and in several cases, teaming with their rivals to increase the likelihood that they’ll win one of the state’s coveted licenses.
The leading joint partnership brings together Flutter’s FanDuel, DraftKings, Entain’s BetMGM and Bally Bet—three U.S. market leaders plus an aggressive startup. Bally Bet has expanded grown at both the retail and level and entered into regional sports television network deals. CDC Gaming Reports referred to the partnership as a “superbid,” and it’s almost certain to win a license.
Flutter and DraftKings operate retail sports betting at Rush Street Gaming’s Rivers Schenectady and Peninsula Pacific’s del Lago near Syracuse. Genting Malaysia operates Resorts World casinos in New York and the Catskills, where a sportsbook is powered by Genius Sports and IGT. And Rush Street operates retail sports betting at American Racing and Entertainment’s Tioga Downs.
A ”second-tier” bid is composed of Caesars Sportsbook, Genting’s Resorts World Catskills, PointsBet, BetRivers and WynnBet, according to Action Network. Caesars recently took over the former William Hill group of sportsbooks and has earmarked more than $1 billion for player acquisition in the future. It’s also affiliated with Turning Stone Resort in Verona and its operator, the Oneida Nation. That association is to the group’s benefit, as providers who align themselves with tribal partners get extra “points” when the final bids are scored.
The third partnership includes Penn National Gaming, owner of Barstool Sports, B2B sportsbook supplier Kambi and online sports merchandise retailer Fanatics, helmed by former FanDuel CEO Matt King.
Additional bidders include:
- European gaming giant Bet365, which has an online presence in New Jersey and courts New York gamblers through a heavy rotation of ads at venues like Yankee Stadium;
- Canadian sports app theScore, recently acquired by Penn National;
- FOX Bet, now live in four states, which has tried to leverage the power of the Fox broadcasting empire to its benefit.
The New York State Gaming Commission will determine the winning bids and license two platform providers, with the option for more. It will select four customer-facing brands or skins between the chosen providers. The rules also allow a single bid with four or more skins to potentially be split into two separate platform-provider licenses.
All bidders must return a minimum 50 percent tax on gross gaming revenue, the highest in the country. The winners are expected to be chosen by the end of 2021, with mobile betting to launch by Super Bowl LVI in February.
Outgoing Governor Andrew Cuomo, who will shortly leave office due to a sexual-harassment scandal, pushed for the bid model over a more open structure favored by New York lawmakers. He previously estimated that at maturity, mobile sportsbooks could generate $500 million in taxes annually.
The Empire State already has several retail sportsbooks at upstate commercial and tribal casinos, but as in other states, online betting is expected to generate the lion’s share of handle—90 percent or more.
It’s no surprise that U.S. sports betting companies want the prestige and bragging rights of a New York license. Carlo Santarelli of Deutsche Bank said a New York presence will also enable any licensee to build a bigger footprint throughout the U.S. But according to Legal Sports Report, it might be hard for them to actually turn a profit, given the revenue share.
On a recent earnings call, Penn National CEO Jay Snowden said he’s still excited by the opportunity. “We have opportunities to do things that no one else can do because the power of the media integration, both with Barstool Sportsbook and—in the not-too-distant future—theScore as well.
“I don’t want to talk a whole lot more about our approach in New York,” Snowden continued. “Look, nobody wants the tax rate as high as it’s proposed in New York, but if anybody can make money in that sort of environment, it’s us.”
Applicants will be selected for licensure by December 6, with licenses to be handed out shortly thereafter. The state hopes to launch mobile sportsbooks in time for Super Bowl LVI in February.
