With online sports betting in the Empire State of New York finally set to become reality sometime in the next 12 months, New Jersey sportsbooks and regulators are facing the fact that it could mark the end of the Garden State’s incredible betting revenue reports. Or will it?
We look at the effect legalized online sports betting in New Jersey’s nearest state neighbor will have on the Garden State sports betting industry.
New York betting numbers will depend on the final number adopted
Many industry experts project that legalized online sports betting could potentially provide an annual windfall of $900 million in annual revenue with as much as $110 million per year going into the Empire State’s coffers. However, in order to reach those kinds of figures, a lot will depend on what sports betting model is adopted in New York. Governor Andrew Cuomo is not making it easy, as what online sports betting model will be taken up is not exactly clear.
The waters are muddied as nothing remains certain on how many online sportsbooks will be permitted and what fees and taxes will apply. The law itself is still murky and unwieldly and nothing like the crystal-clear type of legislation that New Jersey sports betting laws are built upon.
Even New York legislators who worked to finally get online sports wagering approved cannot exactly explain or even give an approximation as to how it will eventually work in the Empire State.
The main points of the New York sports betting law state;
The New York Gaming Commission will pick two operators through a complicated bidding process;
- Following that, the “operators” each get to choose what appears to be two licensees.
- The operators (and perhaps the licensees?) will be required to locate the servers in an existing casino. There appears to be ‘wriggle room’ in the law to offer more licenses in the future, but that does not appear altogether clear at this stage.
- The two selected New York platform providers will pay a one-time fee of $25 million for a 10-year license. The renewal process is yet to be set by the commission.
- The New York State Government state is also looking to impose revenue-sharing payments of between 50-55% of the provider’s gross gaming revenue (GGR) annually. Additionally, the provider will be expected to pay $5 million to the land-based casino where its online sportsbook server will be located.
The New York State online sports betting laws as they stand seem to generate far more questions than they do answers.
Given their strict revenue-sharing restrictions, it remains to be seen if any sportsbook operators at all maybe interested in winning a bid for a sports betting license. If any online sportsbooks are at all interested, if feels that only biggest national online sports betting platforms like the big three of FanDuel, DraftKings and BetMGM may be interested, or in fact, able to afford the inflated revenue sharing program.
Adding to the confusion, according to the New York law, the two platform providers selected must provide a minimum of 4 online sportsbooks, which may freeze DraftKings out of the game in the Empire State.
FanDuel could use its partner, Fox Bet, while BetMGM could potentially use Borgata, which New Jersey’s second-favorite online sportsbook, but as it stands nothing is clear in this regard.
Given the haphazard nature of the New York law as it stands, New Jersey’s online sportsbooks are not shaking in their boots. Yes, they may lose some revenue, but at this stage, it feels that the Garden State has little to fear from New York’s version of proposed online sports betting.
