The New York Gaming Commission (NYGC) unanimously approved Monday proposed mobile sports betting rules following a quick meeting and a little discussion.
It was the last procedural hurdle between the legislation of mobile sports betting and the implementation of the new industry across the Empire State.
Gov. Andrew Cuomo – who has recently resigned from the office – had approved mobile sports betting as part of the fiscal 2022 budget into law in April.
The commission had announced proposed rules in July, the same time the Request for Applications (RFA) went live.
What Happened During Monday Meeting?
In the meeting that did not even last 10 minutes, New York Gaming Executive Director Rob Williams explained the rules, which occupied the day’s agenda.
While Commissioner Chair Barry Sample was not present in the meeting due to a prior engagement, he and John Crotty were not counted for the quorum. The remaining four commissioners approved the measure unopposed.
The most positive aspect of the meeting was the indication that the regulatory process is likely to continue uninterrupted. Williams said all selections must be made by Jan. 6, 2020, which means the current schedule will not be disturbed by the sudden resignation of the governor.
In July, the commission included the set of regulations as part of a 130-page RFA that provides the model for the state’s selection of online sports betting licenses in the coming months.
Some Changes Sought in Adopted Rules
The proposed rules received as many as 14 changes from the pre-proposal draft released along with the RFA. However, those changes are not clearly discernable.
William said that as for the pre-proposal rule circulation, the commission received 94 comments, of which 42 were repetitive. Nine of those sought clarification of terms, meaning there were 43 comments looking to amend the pre-proposal document. After a review, the commission accepted 14 comments, fully or partially, Williams said.
Only after seeing the comments – which are not easily accessible – and the regulatory body’s suggestions would make it possible to see what actually changed.
The comments could be obtained under the state’s Freedom of Information Act laws.
What Do Regulations Contain?
The New York mobile sports betting regulations contain provisions on digital sports betting system requirements, in addition to requirements relating to accounting and financial records, and anti-money laundering program.
The commission finalized the rules Monday, less than a week after issuing detailed information regarding the submissions of all six applications seeking the coveted and rare mobile licenses.
The NYGC is tasked with selecting a minimum of two mobile sports betting platform providers and two mobile sports betting operators during the state’s unprecedented bidding process.
The Empire State’s unique model brought together most unlikely allies – FanDuel, DraftKings, and BetMGM. The three leading giants – otherwise traditional competitors in most other markets – combined to submit a joint application under FanDuel.
The consortium – which also includes Bally Bet as the fourth partner – proposed a 50% preferred tax rate on gross gaming revenues. It projects the proposed GGR will bring the Empire State almost $600 million in tax revenue during the first year of online sports betting.
According to the consortium, the annual state revenue could swell to over $1.3 billion from the new industry at the end of year three.
The potential bidders are expected to give oral presentations in the next step, which can start Sept. 1. Following Friday, when NYGC released the applications submitted by the six bidders, things appear to become less unpredictable.
The forecast suggests that the four companies will be the only platform providers to get licensure during the process. FanDuel-led consortium makes a point how it can sufficiently fill the market at a 50% tax rate, leaving no room for any other competitor.
Another proposal, led by Kambi, projects $892.5 million in yearly tax revenue, with nine sports betting skins in the market, at a 51% tax rate.
The commission must name the winning platform providers and online sports betting operators within 150 days from the time it receives the final application. It means, the NYGC shall select the successful bidders by Jan. 6, 2022, William said.
The commission, however, can also award those contracts before the deadline.