This week, Governor Andrew Cuomo and the New York State Legislature agreed to a budget deal that will bring mobile sports betting to the State through a unique NY sports gambling law. Upon the Governor’s signature, NY sports gambling is primed to become the nation’s largest market. However, New York is taking a somewhat novel approach to mobile sports betting. Consequently, with scant details as to how the regulatory process will play out, what NY’s mobile sports betting market will eventually look like is far from clear at this time.
What do we know about the new NY sports gambling law?
NY Sports Gambling Law Specifics
The NY sports gambling law largely builds upon earlier legislation which brought sports betting to some of the State’s brick and mortar casinos, a topic on which we previously blogged. The future New York sports gambling market will be a so-called “state-run model,” in which the New York State Gaming Commission will determine which sportsbooks are permitted to enter the market. The key details of the state-run model will include the following:
- The Commission will select either one or two “platform providers” pursuant to a request for proposal procedure, with the application process expected to begin on July 1, 2021 (the law permits additional providers in the future if this is determined to be in the best interests of the State).
- Among the considerations that the Commission will consider in awarding a platform provider license are the number and quality of the applicant’s brand partners, affiliations with New York Native American Tribes, its prior business record, and employment demographics;
- Winning platform provider applicant(s) will be required to enter into a revenue sharing agreement with the State, pursuant to which the State is expected to seek at least fifty percent (50%) of the platform provider’s gross gaming revenue, on top of a statutory $25 million upfront fee for a 10-year license;
- Mobile servers must be located in New York commercial casinos in order to satisfy constitutional concerns; and
- There will be a minimum of four (4) mobile sports betting skins, or brands, available for players to access in the marketplace. There is no corresponding maximum number of sports betting skins.
The Gaming Commission will have 150 days to review the applications prior to selecting either one or two platform providers. Given the exclusive nature of the market that the State intends to create, legal challenges from excluded interested parties (particularly Native American Tribes) remains a risk that the State may well still need to navigate. Consequently, the earliest date on which New Yorkers will ultimately be able to place mobile sports wagers is likely to remain an open question for some time.
Changing Landscape for NY Sports Gambling
Insofar as mobile sports betting is concerned, New York businesses, consumers, and policymakers alike are embarking on a journey into a new frontier. The hybrid state-run model contemplated by the NY sports gambling law appears to be unique among the various states that have enacted sports betting legislation in the years since the Supreme Court’s landmark ruling invalidating the Professional and Amateur Sports Protection Act (“PASPA”). Much remains to be seen as to how the NY sports gambling law is implemented. During what is now an information gathering process, it is critical that those interested in entering this space work closely with knowledgeable gaming lawyers to review all aspects of their prospective licensing applications and associated offerings.
If you are interested in learning more about this topic or pursuing a venture in this area, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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