DraftKings, FanDuel Among Winners for New York Sports Betting Licenses
(Bloomberg) -- New York regulators chose two groups -- a total of nine casino and online gaming operators -- to offer mobile sports betting, making the state one of the largest yet to allow such wagering.
DraftKings Inc., MGM Resorts International’s BetMGM venture, Bally’s Corp. and FanDuel, a division of Flutter Entertainment Plc, had joined forces to win one of the bids. Another group included Caesars Entertainment Inc., Wynn Resorts Ltd., PointsBet Holdings Ltd., Rush Street Interactive and Resorts World, part of Malaysia’s Genting empire. That group was led by technology provider Kambi Group Plc.
The New York State Gaming Commission announced the awards Monday following a years-long effort by casino and online operators to crack the market. Mobile betting was included in the state budget passed in April, and regulators have been working since then to structure and evaluate the bids. Six bidders or groups of bidders submitted proposals to the state last summer.
Sports betting has exploded in the U.S. since the Supreme Court said states outside of Nevada could offer it in 2018. In New Jersey, an early adopter, more than $1 billion of bets were placed in September, many of them from New Yorkers crossing the state line to gamble.
New York State Senator Joseph Addabbo, the Democrat who chairs the racing, gaming and wagering committee, said he hoped the new mobile operators would be up and running by the Super Bowl in February, if not sooner. The operators will pay the state a 51% tax rate for 10 years.
“This is big,” he said in an interview before the announcement. “Once we enter the arena, we’ll eclipse New Jersey.”
State Comptroller Thomas DiNapoli estimated tax revenue from online bets could reach nearly $500 million by 2025, up from $99 million in the first year.
The way the state structured its market is unique, with mobile operators being asked to bid based on what tax rate they were willing to pay, notes James Kilsby, an analyst with Vixio GamblingCompliance. Most states approve the tax rate beforehand. Also, land-based casinos weren’t automatically awarded mobile licenses, though operators need to partner with a land-based casino, paying them a $5 million annual service fee to host servers on their properties.
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