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t least two operators have been chosen and will be announced as soon as this week to launch online sports betting in New York, according to sources cited by New York Post, which reports online betting is likely to be up-and-running before the kickoff to the Super Bowl.
The reports by people familiar with the matter indicate the consortium of Bally Bet, BetMGM, DraftKings and FanDuel, along with the group formed by Caesars, Wynn Interactive, Empire Resorts, PointsBet and Rush Street Interactive, could be the chosen two.
The same sources further told The Post that a third group, consisting of Fanatics and Barstool Sportsbook (Penn National Gaming), has not gotten the same paperwork to sign this week as the two others, which appear better positioned to be selected by the state. As a result, questions have been raised about whether the Fanatics bid will also win.
Once greenlighted, sports betting is expected to report $10 billion next year for New York. The nearly $1 billion in expected profits would then be split between the state and the operators. This split was the source of much discussion throughout these last weeks.
Late last month, the committee to award the online sports betting licenses determined a “final tax rate matrix” that all bidders had to meet to be considered in the competition. The table establishes proposed rates based on the number of platform providers and sports betting operators selected for award.
The New York State Gaming Commission is expected to select a minimum of two platform providers and four operators. For this scheme, the proposed tax rate is 64%; while the tax rate decreases as the number of providers and operators increases.
Now, according to The Post, online operators would have to give 51% percent of their profits to the state as a result of a deal between applicants and the state. While not as high as the 64% maximum contemplated by the matrix, the split still outpaces most states.
It is being speculated that this could lead to bettors in New York seeing worse odds as they do in other states, as operators might look to improve profits. This could also mean no promotions to new gamblers, and no free bets.
The only state currently taxing at 51% is New Hampshire. Should New York settle on a similar scheme, both would be the states that tax the highest. In comparison, a state like New Jersey taxes at 13%, and Connecticut at 13.75%.
The report that mobile sports betting is on track to go live before the Super Bowl has been supported by State Sen. Joe Addabbo, a Democrat who represents part of Queens. “They are on schedule,” he said, referring to the gambling commission.
