New York State Gaming Commission On Mobile Sports Betting: You Have Questions, We Have (Some) Answers

Posted By Derek Helling on April 27, 2021

Inquiring minds have wanted to know how regulators in New York will approach mobile sports betting since Gov. Andrew Cuomo signed the budget bill into law earlier this month.

Well, we now have a peek into the minds of the New York State Gaming Commission on the matter.

Late last week, the commission released a 10-page FAQ. The text sheds some light on some areas of the future landscape of online wagering in the Empire State. In other areas, though, the wait continues to see exactly what it will look like.

NY regulators release mobile sports betting FAQ

Probably the term that most people questioned is “platform provider.” That’s what the law calls at least two companies that the state will contract with to operate online sports betting on its behalf. Among the questions were who qualifies as a platform provider and what a platform provider specifically would and would not do.

The NYSGC tried its best to make the term clearer. For example, the commission laid out what a platform provider’s role in the system is.

“A platform provider must provide a system that, among other functionality, performs the acceptance and registration of all wagers; generation of all electronic wagering tickets; computation of wagering in the pool and payoffs; maintains records of all wagering activities; and generation of all reports required by the Commission.”

While the FAQ stated multiple times that the same company could be both an operator and platform provider, it did divide the role of those two entities from the state’s point of view.

“The operators (skins) will be consumer facing. A platform is the back-of-house system accepting and recording transactions initiated through the skin applications.”

Another stipulation in the FAQ for the operator-platform provider relationship is quite pertinent. Essentially, the regulations will require operators to use the platform providers’ technology when it comes to the actual betting activity.

“Operators must utilize the platform for the acceptance and processing of wagers. Utilization of technology beyond the required wagering transaction processing will be at the discretion of a platform provider.”

The commission also addressed other matters like tribes’ exclusivity zones and whether gambling companies that already operate retail sportsbooks at commercial casinos in New York have a leg up on the competition for online access. At the same time, it put off weighing in on some issues.

Regulators still have a lot of work ahead

Perhaps most daunting for gambling companies is it looks like there will only be one shot. The commission stated that “under its interpretation of the law,” adding more operators in the future is not permissible.

However, the language seems to point toward the commission potentially awarding more than two platform provider licenses. The law does not include a cap, only a minimum. The commission expressed that its priority is generating the greatest amount of revenue for the state.

It would appear a longshot, but potential operators like DraftKings and FanDuel could still find themselves on the outside looking in. Should they fail to obtain operator or platform provider licenses, their presence in the state would remain limited to the retail operations at del Lago and Tioga Downs casinos, respectively.

The commission was clear that such agreements between NY commercial casinos and operators “will have no relevance” in selecting operators/platform providers. Rather, it’s all about how an operator or platform provider scores in the commission’s system.

The FAQ does not provide a lot of details about that scoring system. As a matter of fact, there is only one way the information in this document lays out clearly for bidders to augment their scores.

What about NY tribal casinos?

Deals between platform providers and tribal casinos will have some value. The commission stated that “an operator that has a revenue share agreement with compacted Nation(s) or Tribe(s) will receive additional point consideration when its bid is scored.” Also of note in regard to tribal casinos is the commission’s stance on mobile wagering within those tribes’ exclusivity zones.

“State law specifies that the wager occurs where the server is located. No servers will be located on Indian lands therefore by operation of law no wagering activity will take place on Indian land or within their exclusivity zones.”

The FAQ punts on laying out specifics about tax rates, desired timeline for launch and whether it will require the use of official data. The forthcoming regulations will answer those questions.

What’s certain is that the interpretation of the commission on many matters will prove crucial for everyone going forward. With this FAQ in place, New Yorkers have a better idea of where that’s going.

Photo by AP / Frank Franklin II
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Derek Helling

Derek Helling is a freelance journalist who resides in Chicago. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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