New York Mobile Sports Betting Operators May Work With a 64% Tax Rate

Mobile sports betting operators’ deadline to amend their proposed tax contribution expires today at 5 PM as told by the New York State Gaming Commission (NYSGC). The Commission also confirmed that a GGR rate of up to 64% could apply to applicants.

The Highest Tax Rate Has Been Selected, According to the Commission

The NYSGC’s deadline for the applications was August 9, and, as the Commission states, the bids by score are already ranked and the highest tax rate among the bidders has been selected. If the Commission has four or five licenses, then the applied tax rate would be 64%. With it, the contributions would drop to 50% gradually if there are 10-12 operators. If the number of operators is upwards of 13, then the contributions will decline gradually to 35%.

So far, a total of 14 operators are featured in the bidding process and any operator that declines to adhere to the new tax matrix will be dropped. Originally, these details were uncovered in the NY 2022 state budget, which featured mobile sports betting.

With the process of application for a license, the Commission also incentivized bidders to come up with a tax rate no lower than 50%, and the proposed bands were among the highest in the US for sports betting.

Applicants’ Final Selection Will Be Before December 6

While communicating with the applicants via email, the Commission said that this update was a step of the process of evaluation and selection. It also added that the proposed tax rates by operators wouldn’t need any amendments. As for the final selection of applicants, it will be completed before December 6.

In the email, the NYSGC reminded applicants of the so-called non-collusive bidding requirements to make sure that their bids are not visible by the competition.

When the request for mobile sports betting applications was launched in July, all of the bidders were asked to offer a state tax that cannot be lower than 50%, and the proposed rate is one of the main factors that will impact the decision on whether the Commission will hand a license or not. The initial fee of the license was set at $25 million.

As the scoring system suggests, technical factors can attribute to up to 75 points. Some of those technical factors include the sustainability and integrity of the applicant’s platform, as well as market expertise.

If agreements on revenue share are made with Native American tribes/nations, five additional points will be contributed. Moreover, the licensees will be required to house their services at a casino in NY and pay an annual $5-million fee to the operator. According to statements, mobile sports betting in the state is still safe, despite the resignation of Governor Cuomo.

Leave a Reply

Your email address will not be published. Required fields are marked *