NY regulators launch RFP for new casinos, agree on 64% tax for online sports betting

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T

he NYS Gaming Commission issued on Wednesday a “request for information” for unawarded commercial casino licenses in up to three casinos in the New York City region.

Proposals are due December 10 and the RFP (request for proposals) is set to measure interest in downstate region developments, reports New York Post. The move, expected to draw interest from major operators, is the first step before the process of electing official bids launches.

The Commission launched the request “to solicit information from parties interested” in developing and/or operating gaming facilities. Likewise, the Commission is interested in receiving input from parties “that may be affected by developed facilities.”

It is being speculated that some of the licenses could go to gaming properties that have already been greenlighted to run slot machine gaming in the area: Genting-owned Resorts World Aqueduct Casino in Queens, and MGM Resorts-owned Empire City Casino in Yonkers.

The casinos could be located anywhere in New York City, Nassau-Suffolk in Long Island and Westchester-Rockland-Putnam counties north of the city, while there’s strong opposition among Manhattan lawmakers from opening a casino in Midtown or other parts of New York County.

The New York Post had previously reported that Bally’s Corp., Wynn Resorts, and Las Vegas Sands are all interested in competing for a New York City-area casino license.

Throughout the “request for information” process, the Commission will assess certain topics and questions, such as: how big is the interest in the project, which would be the ideal locations for the casinos, what should be the size of the venues, and the best taxation and license fee model.

Meanwhile, on Tuesday, the New York committee to award online sports betting licenses in the state has taken a big step forward by determining a “final tax rate matrix” that all bidders will have to meet to be considered in the competition.

Bidding groups have been alerted of the rate and will have until 5 p.m., Monday, Oct. 25, to amend their bids if their proposed tax rates do not match the required ones. The matrix has been made public.

The table establishes proposed rates based on the number of platform providers and sports betting operators selected for award. The NYSGC will select a minimum of two platform providers and four operators.

For a scheme of two platform providers and four operators, the proposed tax rate is 64%. The tax rate decreases as the number of providers and operators increases: under a 25 operators and 15 platform providers scenario, the tax is 35%.

In its request for proposals for the sports betting licenses, New York’s Gaming Commission noted that it was aiming for a tax rate of at least 50%. The newly introduced final tax rate further supports that intention.

The 64%+ rate would be the highest in the country for sports betting. New Hampshire currently taxes revenues at 51%, while Pennsylvania taxes at 36%. In comparison, a state like Indiana taxes sportsbook revenues at 9.5%, while New Jersey taxes online sports betting revenue at 13%.

The 50% tax threshold has been a key point for Gov. Andrew Cuomo, who until just months ago had not been a proponent of offering mobile gaming in the state. However, after the COVID-19 pandemic threatened the state’s finances, he sought new sources of revenue.

If a bidding group chooses not to amend its tax rate to reach the one set by the state, the group will be disqualified from further consideration for a license. However, agreeing to the newly introduced tax rate does not mean the automatic reception of an online sports betting license.

During the RFP, it was announced that proposals will be scored on several factors, including experience in sports betting as well as the operator partners’ experience. Applicants will also receive bonus points if they have a revenue-sharing agreement with a tribal gaming operator in the state.

After reviews and oral presentations, the Gaming Commission plans to select finalists by December 6 and give those applicants a week to submit a final application. Awards would then be made at the commission’s following meeting.

The New York State Gaming Commission has received six bids, three from solo companies and three group bids. The commission must select at least two platform providers, which will be in charge of the technology the online sports betting program will use, and four platform operators from the submitted bids.

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