A bill amendment from New York Assemb. Gary Pretlow to add more online sports betting operators and include more minority-controlled businesses has been included in the State Assembly’s one-house budget.
As per the Assembly one-house budget, the New York State Gaming Commission would award up to 16 licenses to online sportsbooks in New York. Currently, nine NY sports betting apps have received licensing.
The additional licenses would be determined following a competitive bidding process. The NYSGC would issue a request for applications no later than July 1 — and with a submission deadline no later than 30 days from the request date.
Also per the budget, the NYSC “shall establish a goal to award 30% of the mobile sports wagering licenses … to businesses owned by members of a minority group …”
Increasing NY sports betting apps would decrease tax rate
As it stands, NY online sportsbooks pay a 51% tax rate on total gross gaming revenue (GGR). But under the current matrix, going to at least 16 would drop the tax rate all the way down to 25%.
Pretlow’s bill amendment introduced to the Assembly had called for the Empire State to go from the current nine betting apps in New York to no fewer than 14 by Jan. 31, 2023. That would decrease the tax rate from 51% to 35%. The industry would then expand to no fewer than 16 NY sports betting operators by Jan. 31, 2024. This would lower the tax rate to 25%.
Operators left out during the NY online sports betting competitive bidding process last year (as well as other sportsbooks who did not initially apply) would be eligible to re-apply for license. That includes the likes of:
- Penn National Gaming/Barstool
Fanatics, initially left out of licensing, planned to have Jay-Z as vice chairman of Fanatics Sportsbook in addition to serving on its board of directors. Minority policymakers in the state have expressed disappointment with the lack of minority representation within online sports betting operator licensees.
According to Pretlow’s bill, the NYSGC would need to approve at least two applicants with “qualified minority representation.” Qualified representation means “no more than six individuals qualified as members of a minority group … with a direct or indirect economic interest of at least five percent in the applicant.”
Sportsbooks hoping for tax rate drop for long-term profitability
DraftKings CEO Jason Robins has reiterated his disapproval of New York’s 51% tax rate. Other NY sportsbooks have expressed similar sentiments when it comes to difficulties creating a sustainable and profitable business long-term.
But the state has already generated $121.2 million in tax revenue from Jan. 8 to March 6 off $3.5 billion in NY online sports betting handle.
It is possible the bill amendment also makes the NY Senate one-house budget.
The Senate one-house budget could also include the three downstate casino licenses, which could bring in at least $1.5 billion for NY in licensing fees alone.
Addabbo also looks to pass a bill that would allow NY betting apps to integrate fixed-odds horseracing and NASCAR. The bill would also allow betting kiosks to be placed at stadiums, arenas and racetracks across the state.