Start Spreading the News – New York Releases Sports Wagering Request for Applications

On July 9, 2021, the New York State Gaming Commission (the “Commission”) released a Request for Applications (“RFA”) for mobile sports wagering platform providers.  The RFA is based upon the statutory requirements that the Commission must follow, including a competitive bidding process and the award of licenses to at least two Mobile Sports Wagering Platform Providers and four Mobile Sports Wagering Operators.

Mobile Sports Wagering Platform Providers must fully integrate the Operator’s wagering system into the platform, accept and register all wagers, generate all electronic wagering tickets, compute wagering and payoffs, maintain records of all wagering activities and generate and/or submit to the Commission all required reports.

Mobile Sports Wager Operators means the skin and publicly-facing entity that accepts sports wagers from patrons through a Platform Provider.

Applications

Applicants must submit a matrix that includes various scenarios of number(s) of Operators and number(s) of platforms as well as a tax rate that the applicant will accept for each scenario.  The matrix must also include the specific sportsbook skins that would operate on their platforms.

An evaluation committee will score each applicant on a 75-point Technical Factor scale detailed below.

Technical Factor Value Up To
Expertise in the market of the Applicant and the Applicant’s Proposed Operators 25 points
Integrity, sustainability and safety of the Mobile Sports Wagering Platform 20 points
Past relevant experience of the Applicant and the Applicant’s proposed Operators 15 points
Advertising and promotional plans 7.5 points
Capacity to rapidly and efficiently bring Authorized Sports Bettors into the Applicant’s Platform 2.5 points
Applicant’s efforts to foster racial, ethnic, and gender diversity in Applicant’s workforce and the each of the Applicant’s proposed Operators’ workforce 2.5 points
Other factors impacting revenue to the State 2.5 points
Maximum cumulative score to be awarded for Technical Factors 75 points

Applicants can also earn five additional points for entering into a revenue sharing agreement with a Native American Tribe or Nation that is party to a compact with the State.

However, only those applicants with a Technical Factor Score (excluding the Tribe or Nation bonus, if any) at or exceeding 60 points out of 75 points will be considered a Qualified Applicant.

Additionally, applicants will obtain points based on the proposed tax rates used in their matrix.

Pricing Factor Value
Proposed taxation rate on Mobile Sports Wagering Gross Gaming Revenue
12.5 percent up to 30 percent 3 Points
30 percent up to 40 percent 10 Points
40 percent up to 50 percent 15 points
50 percent 20 points
One additional point for each full percentage point over 50 percent

Applicants will have a total score of the sum of the Technical Factor, Tribe or Nation Bonus (if any) and the Pricing Factor.  The Pricing Factor will be a tiebreaker between equally scoring applicants.

The final ranking of applicants is based on an analysis of the qualified applicants with the highest score that will collectively meet the requirements for two providers and four skins.

If the results of the total ranking process identify applicants who are the same as those selected in the technical portion of the process, those applicants would be selected as winners.  However, if the total ranking results in high scores that differ from the technical portion analysis, then the Commission must vary the number of selected providers and skins, and repeat the process until the high scorers are a match.

Each applicant must warrant, under penalty of perjury, that its application was arrived at independently and without collusion aimed at restricting competition.

Submission of Questions

The Commission wishes to impose certain restrictions on communications between the Commission and an applicant during the RFA process, similar to the restrictions that would apply to State contracting pursuant to State Finance Law.

An applicant is restricted from making contact from the issuance of the RFA through final award resulting in a license issued by the Commission (“Restricted Period”) to persons other than designated staff members, unless the contact is permitted, using the statutory exceptions set forth in State Finance Law Section 139-j (3)(a) as guidance. Designated staff members are identified below in the Key Contacts section.

Questions in regard to the RFA must be submitted by electronic mail no later than the date and time specified in the Key Dates section below.  Further, any attachments to emailed questions must be in Microsoft Word format.  Additionally, questions must be in generic terms and not contain specific information about the applicant or proposed application.

Key Contacts

All applicants responding to the RFA and all communications concerning the RFA process must be addressed to: Secretary to the Commission Kristen.Buckley@gaming.ny.gov; or Contract Management Specialist 3 Stacey.Relation@gaming.ny.gov; or Contract Management Specialist 2 Alysan.Bowers@gaming.ny.gov.

Questions regarding the Draft Regulations must be submitted independently of RFA questions and should be addressed to gamingrules@gaming.ny.gov.

Responses to questions and any changes to the RFA resulting from such questions will be communicated in published addenda, which will be posted on the Commission’s website, www.gaming.ny.gov

Key Dates

RFA Issued July 9, 2021
Applicants’ First Questions Due by 3:00 p.m. EDT July 16, 2021
Commission Response to First Questions July 22, 2021
Applicant’s Second Questions Due by 3:00 p.m. EDT July 27, 2021
Commission Response to Second Questions August 2, 2021
Applications Due by 4:00 p.m. EDT August 9, 2021
Oral Presentations of Applications May Begin September 1, 2021
Selection of Applicants Considered for Licensure Before December 6, 2021
Amended Applications Due by 4:00 p.m. EDT One week after notification of need for amendment
Award of Licenses Next Commission Meeting

General Information

The Commission intends to treat applications as public records and will make them available to the public, with applicable exemptions pursuant to the FOIL.

Any application submitted that contains confidential information must be conspicuously marked on the outside as containing confidential information, and each page upon which confidential information appears must be conspicuously marked as containing confidential information. Identification of the entire application as confidential may be deemed non-responsive and may disqualify the applicant. If an applicant designates any portion of an application as containing confidential information, the applicant must submit copies of its application from which the confidential information has been excised or redacted.  The confidential information must be redacted or excised in such a way as to allow the public to determine the general nature of the material removed and to retain as much of the application as possible.

As a condition to submitting an application, each applicant, on behalf of itself and any direct or indirect owner of such applicant, shall execute and deliver a waiver, release, indemnification agreement and covenant not to sue.

The Platform Provider is the primary applicant in response to the RFA. If more than one Platform Provider is included within an application, one Platform Provider must be designated as the primary applicant. The primary applicant is responsible for identifying all other Platform Providers and the Operator or Operators that will be hosted by the platforms. They are also responsible for the submission of all information and documentation required of all Platform Providers and Operators as part of their application.

If the applicant is awarded a Mobile Sports Wagering License, the Platform Provider will be responsible for the operation and maintenance of a Platform for the integration of Operator(s) to accept and process mobile sports wagers.

Applicants are also required to disclose conflicts of interest as well as any public officials or officers or employees of any governmental entity, and immediate family members of any such public officials, officers or employees, to the extent known, who, directly or indirectly, own any financial interest in, have any beneficial interest in, are the creditors of, hold any debt instrument issued by, or hold or have an interest, direct or indirect, in any contractual or service relationship with the applicant or their affiliates.

Fees

A Mobile Sports Wagering Platform Licensee must pay a licensing fee of $25,000,000 to the Commission within 30 days of approval of the applicant’s license and the license is conditioned upon payment of such fee.

Platform providers are required to make a cumulative annual payment of $20,000,000, in the form of $5,000,000 to each of the four commercial casinos in New York, as a server and equipment hosting fee.  Additionally, each platform provider will be responsible for its own reasonable and actual costs.

If you have any questions about this please contact Frank DiGiacomo, Steven J. Brody, Joseph F. Caputi or any of the attorneys in our Gaming Industry Group.