NY Regulators Publish Expanded FAQ Ahead Of Mobile Sports Providers’ Proposals

In April, New York Gov. Andrew Cuomo signed a new budget bill into law, an act that moved NY a step closer to introducing mobile sports betting. But much work remained, and a couple of weeks later the New York State Gaming Commission (NYSGC) helped clarify some questions by issuing a 10-page FAQ.

Interested parties had more to ask, however, and this week the Commission provided a supplementary set of questions and answers addressing just how mobile sports betting will work in the Empire State.

The expanded FAQ comes ahead of the publication of the official RFA, or Request for Applications on July 1. Providers will then have 30 days to submit proposals, after which regulators will select at least two platform providers and four mobile sports wagering operators.

Additional questions about applications process, tribes’ involvement

The initial FAQ in April set out guidelines defining qualifications for providers and operators, the NY tribes’ exclusivity zones, and other pertinent details including general indications of selection criteria regulators will use when making their selections.

The new questions covered a similarly wide range of topics. The first concerned whether commercial casinos would be ready for additional network traffic in cases where a provider’s servers are located on site. To that the NYSGC insisted they would “facilitate to ensure functionality” in such instances.

There were several new questions about the RFA process as well. The NYSGC clarified that operators must be included in providers’ initial bids. Also, the Commission insisted it has no preferences regarding the number of operators a provider has as partners. The Commission also reiterated how each provider with a winning bid must pay the $25 million license fee. However the NYSGC avoided responding to other questions about the process and judging applicants. As the Commission explained, the RFA should provide such specifics.

The Commission addressed questions about the tribes’ potential involvement as well. Answers under that heading included the following:

• an operator can have revenue share relationships with multiple tribes
• tribes need not already have wagering technology in place to apply as providers
• applicants with revenue share agreements with compacted tribes will earn “additional points” when judged
• a bid involving participation by a non-New York tribe would not be perceived favorably

Taxes, fees, licensing, details of operation also addressed

Regarding taxation and fee considerations, the NYSGC confirmed the need to include operators’ revenue and tax projections as part of providers’ bids. The Commission also confirmed that when calculating their estimates providers would not be able to deduct costs related to purchasing official league data from gross gaming revenue.

There were a number of new questions regarding licensing. Among the clarifications, the NYSGC explained:

• all businesses must have legal authority to operate in New York
• a license will be effective for up to 10 years
• during that 10-year term operators cannot change platform providers

Additional questions speculated about various potential situations involving licensees. But the NYSGC made it clear “the Commission does not entertain hypothetical scenarios.” Most of those questions concerned what the consequences would be should a licensee fail to follow regulatory or statutory requirements.

Finally, under the heading of mobile sports operation came questions about what would be required of providers. These included questions about the processing of wagers, record keeping, reporting requirements, account management, and responsible gambling programs.

The Commission provided some guidance regarding each of these topics. However, in many cases the NYSGC explained that answers would have to wait until the drafting of regulations.

Bettors, providers eagerly anticipate mobile sports betting launch

Many will be watching closely once the RFA process begins. There will be pressure to move quickly. Many interested parties continuing to hope for the launch of mobile sports betting later this year or at the start of 2024, perhaps in time for wagering on Super Bowl LVI in February.

As noted, once the RFA goes live on July 1, applicants will have 30 days to submit proposals. After that, the Commission will have 150 days to select winners, The NYSGC previously indicated its intention to “make all reasonable efforts to expedite the award process.”

That said, the Commission added it could not predict in advance how long they might need to do so.