New York State Gaming Commission finally sought to clarify some mysteries surrounding mobile sports betting passed into law earlier this month. The problem with Gov. Andrew Cuomo’s mobile sports betting model is that no one really understands it. Despite opposition from all the stakeholders including lawmakers, Cuomo pushed his limited operator model, which calls for at least two platform providers and four operators. The major uncertainty surrounded the relationship and working between platform providers and the operators.
On Friday, the NYSGC sought to clarify details regarding ambiguities in Cuomo’s plans. The commission is tasked with running the competitive bidding process for giving the Empire State’s mobile sports betting contracts.
The NYSGC answered certain questions in an attempt to address stakeholders’ concerns regarding the intense selection process and its working.
However, some questions still remain unanswered and the potential bidders and the state bettors will have to wait for the request for proposal (RFP) to drop for full details. It is expected by July 1, the day when the first draft of mobile sports betting regulation is also expected.
Relationship Between Platform Provider and Operators Clarified
New York mobile sports betting legislation passed in the budget authorizes the NYSGC to select a minimum of two platform providers and a minimum of four operators to launch statewide mobile betting through a Request for Application (RFA).
The biggest mystery unresolved to date was the actual functioning and relationship of platform provider and operator.
The NYSGC sought to clarify through its statement, saying operators must utilize the platform for accepting and processing the bets. It will be the discretion of a platform provider to utilize technology beyond the required wagering transaction process.
Another knotty issue that required clarification was if sportsbook operators under the same platform provider can use different technology. To this, the commission said they could, adding that the required utilization of a platform is limited to those functions concerning accepting a processing a bet. “Further utilization is subject to agreement between a platform provider and an operator.”
Platform Provider to Supervise Operators
The commission revealed that the platform would serve a sort of supervisory role. It said the operators (skins) would be consumer-facing, meaning a sportsbook operator could partner with someone that does not offer all of their technology as long as the operator routes its wagers through the platform provider.
“A platform is the back-of-house system taking and recording transactions initiated through the operators’ applications.”
Key Questions Remain Unanswered!
The commission did not clarify how the Empire State would get its money. Cuomo’s mobile sports betting model entails more than $500 million in yearly sports betting revenue within three years.
The Democratic governor dictated a minimum tax rate of 50% to be paid by platform providers. However, the winning bid with the highest proposed rate will set the standard. Other providers with a winning bid would have to include the higher rate to procure a license.
But it leaves platform providers confused regarding the viability of the enterprise as distribution of internal revenue is subject to agreement between a platform provider and a sportsbook operator.
The critics claim the stifling business environment appears to benefit only one stakeholder: the state of New York.
New York Mobile Betting by Super Bowl?
Under the law, the commission is supposed to release the RFA for the platform providers by July 1. On Friday, the commission reiterated it would “expedite the process” but remained short of giving any specific timeframe.
The commission hopes to make public the initial draft of New York mobile sports betting regulations in early July. Once issued, platform providers will have to submit their applications within 30 days.
The commission must select a minimum of two platform providers within 150 days after receiving the final application. The commission said it could speed up the process before the deadline. But again, the NYSGC did not say when New York mobile sports betting would go live once the bids are awarded.
After the legislature approved the budget, Sen. Joseph Addabbo Jr. expressed hope that online sports betting would be available to New Yorkers by the Super Bowl.