There is urgency to enter the New York market with legalized online sports betting potentially set for launch in early 2022. But a tax rate that could reach 50% or greater doesn’t exactly thrill operators.
“Well, if you tell me what the tax rate is, I’ll tell you the answer to that question,” BetMGM CEO Adam Greenblatt joked during the Business of Sport US Summit on Thursday afternoon.
“It’s critically important. There is overlap between New Jersey and New York, clearly. There is tax revenue leakage from New York into New Jersey. That’s an issue for New York state. With such a significant population and market size opportunity in the state, it’s critical.”
Details On NY Super Bid For Online Sports Betting
BetMGM Sportsbook is part of a heavily-favored “super bid” alongside DraftKings Sportsbook, FanDuel Sports Betting and Bally’s. As part of the bid, those major operators want to be the only four NY online sportsbooks in the state.
They also would be open to a revenue share or tax rate of 50%, with the potential for $1.3 billion in gross revenue by Year 3, bringing more than $600 million in revenue to the state.
The quartet, which makes up about 80% of the US market share, would also contribute $100 million in license fees. The bid also suggested adding more operators beyond this bid would create “economically unfeasible conditions.”
“I think we at BetMGM have participated in a consortium that we believe could be the whole answer for the state, and proposed very aggressive tax rates associated with that,” Greenblatt continued. “So let’s see.
“Our starting point would be open market, sensible tax rate — we referenced earlier the structure in Arizona being a good one. We agree. But look, we just need to work within the framework that is within what is possible. So we’re going to do the best we can with it, and that definitely participating in New York is essential.”
Where Things Stand for NY And Sports Betting
The New York State Gaming Commission is currently reviewing applications, and has until before Dec. 6 to select applicants for licenses. The hope is that online sports betting can be up and running in the state by the Super Bowl on Feb. 13, 2022, though legal experts are skeptical of that timetable being met.
“It’s hard for me to speak too much on this issue because it’s a government bidding process, and the rules are public. But we’ve submitted thousands and thousands of pages for our application,” Bally’s chairman Soo Kim told PlayNY.
“Look, we are in the bidding consortium with DraftKings, FanDuel and BetMGM. I feel like it’s a good one to be part of, and as a native New Yorker myself, I believe that I’m looking forward to rolling out our products in the state. Beyond that, it’s hard to say.
“It’s going to be a competitive market, and no matter how many operators are chosen, we’re excited for it.”