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NY selects top mobile betting bidder, as operators could face 64% tax rate

The New York State Gaming Commission has given prospective mobile sports betting operators until 5pm on Monday to amend their proposed tax contributions, after confirming that rates of up to 64% of gross gaming revenue could apply to applicants.

The commission, which set a deadline of August 9 for applications, said that it had already ranked the bids by score – and selected the highest tax rate offered among the bidders.

The 64% rate would apply if the Commission selects four or five operator licenses, with contributions dropping gradually to 50% for between 10 and 12 operators and 35% for 13 or more. Fourteen operators have featured in the bidding process so far, although any that decline to conform with the new tax matrix will be cut from the process.

The commission’s request for applications in July incentivized bidders to offer the state a tax rate of at least 50%, with the proposed bands among the highest in the US for sports betting.

The final selection of applicants will take place before December 6. In an email communication with applicants, the commission stated that the latest update was “simply a step of the evaluation and selection process” and operators that had proposed the highest rates would not need to make an amendment.

The commission also reminded applicants of non-collusive bidding requirements, ensuring their bids remain blind from the competition.

When the commission launched its request for applications for mobile sports betting platform providers in July, potential bidders were incentivized to offer the state a tax rate of at least 50%.

The proposed tax rates are one of contributing factors towards the award of a license, with the initial fee having been tagged at $25m.

As part of the scoring system, up to 75 points are available for technical factors, including expertise in the market and the integrity and sustainability of the applicant’s platform.

An additional five points may be awarded for revenue-share agreements made with Native American tribes or nations. Licensees would also be required to house their servers in a New York casino and pay the operator an annual $5m fee.

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