One day after the New York Gaming Commission awarded conditional mobile sports betting licenses to nine companies, top sportsbooks are already navigating through traffic at the speed of a hurried Manhattan cab driver in the race to dominate market share.
Expect the multi-billion-dollar companies to engage in an intense turf war for the New York gold mine. The partnership frenzy kicked off just hours after the commission’s historic announcement, when BetMGM announced Tuesday that it has secured a partnership with Madison Square Garden to become the official sports betting partner of the NBA’s New York Knicks and the NHL’s New York Rangers at the venue known traditionally as “The World’s Most Famous Arena.”
“We’re excited to be partnering with BetMGM — a leader in the sports betting and gaming entertainment industry — to bring them an unparalleled platform in sports and entertainment,” said Ron Skotarczak, who serves as executive vice president of marketing partnerships at MSG Entertainment. “MSG Sports and MSG Entertainment are made up of world-renowned brands that set industry standards for excellence, exposure and engagement — making us ideal partners to help drive sports betting’s continued growth.”
BetMGM x The World's Most Famous Arena 🗽
We're excited to announce a multi-year marketing partnership with Madison Square Garden!
More ➡️ https://t.co/K15go8FJjf
— BetMGM 🦁 (@BetMGM) November 9, 2021
Home to the nation’s largest media market, as well as serving as the financial capital of the world, New York City has the potential to become the mecca of mobile sports betting. Over the first year of mobile betting in the Empire State, it would not be a stretch for New York to record online gross gaming revenue (GGR) above $1 billion, multiple industry sources told US Bets in recent weeks.
Leveraging pro sports team and media partnerships
Vertically integrated companies that are able to implement sports betting into their omni-channel platforms will establish a leg up on the competition. BetMGM is one of four sportsbook operators that joined forces in a so-called “super bid,” featuring the industry’s most liquid, well-capitalized companies. The consortium, which also contains DraftKings, FanDuel, and Bally Bet, will look to utilize partnerships with pro sports leagues, teams, and major media networks as the sportsbooks attempt to expand their player databases exponentially.
Now that the bids have been awarded, those four are back on their own. Bally’s Sports, one of the nation’s top regional sports networks, carries select programing featuring the New York Yankees, Brooklyn Nets, New York Liberty of the WNBA, and New York FC of MLS through the expansive YES Network. Expect those teams, along with the Buffalo Bills and Buffalo Sabres, to develop creative ways for integrating sports betting into their respective broadcast and digital media strategies. In total, New York has 11 professional sports teams.
Who's in (lot of usual suspects), who's out (Barstool, among others), and what's what for online sports betting in New York.@MattRybaltowski breaks it down. https://t.co/v7GsBdT5fn
— Sports Handle (@sports_handle) November 8, 2021
Beyond the companies from the super bid, five others received conditional licensing on Monday through a consortium led by Kambi, a sports betting B2B technology provider: Rush Street Interactive, Caesars Entertainment, PointsBet, Wynn Resorts, and Genting, which owns Resorts World.
“Kambi has proven time and time again that we know what it takes to succeed in some of the world’s most competitive sports wagering markets,” Kambi CEO Kristian Nylén said in a statement. “Therefore, we are confident our mobile sportsbook will be just as popular with New Yorkers as our on-property product, which has been live in the state for the past two years.”
Other comments from selected applicants
- Rush Street Interactive: “New York is a crown jewel market with more than 20 million residents which, upon launch, will become the largest online sports betting market in the United States. Moreover, it is home to some of the most passionate sports fans in the nation,” Rush Street Interactive CEO Richard Schwartz said. “We look forward to bringing our award-winning online gaming platform and customer service to New York, deepening our roots in the state and region, and creating an omnichannel experience for sports bettors that we have successfully executed upon across the country.”
- Wynn Interactive: “New Yorkers represent a significant portion of the Wynn Las Vegas and Encore Boston Harbor databases, and we look forward to giving those customers more ways to earn and use Wynn Rewards. We also look forward to meeting and engaging with new customers in the state via WynnBET,” Wynn Interactive CEO Craig Billings said.
- PointsBet: “We are thankful to the Gaming Commission for this recommendation and believe it speaks volumes to PointsBet’s reputation and ability to deliver an unrivaled, world-class experience. We eagerly await the official opportunity to leverage our exclusive sports betting partnership with NBC Sports and introduce the nation’s premier sports betting product to the countless passionate, sports-loving New Yorkers.”
Implications on Wall Street
Following the commission’s announcement on Monday, gaming stocks for the successful bidders remained relatively unchanged, indicating that investors already baked in the addition of mobile sports betting in New York into their valuations. One company shut out of New York, Penn National Gaming, fell more than 4% on Monday.
Under a final tax rate matrix released by the commission last month, New York will assess a tax rate of 51% on each licensee’s online gross gaming revenue from sports betting. The rate is considerably higher than the nation’s state average of around 11%. But given a customer spend of $60 per adult on mobile sports betting, New York can reach the $1 billion threshold in annual GGR, Macquarie analyst Chad Beynon wrote in a research note.
“From a GGR perspective, we believe New York represents one of the most attractive sports betting states given its population,” Beynon wrote. “That said, clearly the 51% tax rate will impact operator profitability.”
Of the nine companies awarded mobile sports betting operator bids on Monday, seven were also selected as platform providers. The platform providers must pay the state a one-time fee of $25 million for a 10-year license.
Photo: Wendell Cruz/USA TODAY