Analysis: Mobile NY Sports Betting Bid Process Could Help These Operators

Even the best plans often go wrong, and so is New York sports betting.

Four companies were ahead of the game, having first skin access offerings to the market months and even years ago:

  • DraftKings, along with From the lake
  • FanDuel, along with Tioga Downs
  • Bet365, along with Empire Resorts
  • BetRivers, attached to Rush Street rivers casino

But under the New York Sportsbook deal reached this week, those agreements are controversial. Instead, it is an open tendering process for access to sports betting in New York.

So who is in the driver’s seat?

Good news and bad news for DraftKings

DraftKings shares fell 2% Wednesday the Susquehanna analyst Joe Stauff attributed to the New York News and the loss of this access.

The licensing requirement is really a jump ball, ”said Stauff.

However, he found that DraftKings was “particularly beneficial” with every offering because of the number of New York customers it already serves.

“By issuing DKNG and FanDuel licenses in NY, the state can recapture a relevant amount of business overnight, which is another notable benefit to winning a license,” wrote Stauff.

DK also offers sports betting New Hampshire – the market that governor Andrew Cuomo want to emulate. Crucially, DraftKings got to market quickly after the deal was signed and the launch will be a key determinant of the New York sports betting process.

FanDuel in the driver’s seat?

FanDuel also caters to many New York bettors, arguably even more so than DraftKings given the strength of its retail presence The grasslands. FanDuel said more than before 20% from his New Jersey GGR is from New York. That’s a lot of tax revenue that could possibly be brought back across the border.

The company could have another benefit as it could offer multiple skins (Fox Bet, FanDuel) on a technical platform. This assumes that the company can resolve its legal differences with Fox. That situation escalated over the weekend and Fox threatened to suspend FanDuel’s TV advertising.

At a conference call on Wednesday, Sen. Joe Addabbo Jr.. stressed the state wants a “top tier” operator with the ability to handle New York volume. That would apparently put FanDuel and DraftKings in the best position.

Where is BetRivers?

Rush Street also saw the stock drop a few percentage points on the news because it no longer has its mark on a skin.

It is also dependent on warehouse for sports betting tech. Stauff noted that paying a vendor could limit Rivers’ ability to deliver additional revenue to the state.

In fact, NY becomes a “Extremely challenging Margin environment, “said Shaun Kelley from Bank of America.

“If [operators] It will be unclear whether it will ever be possible to make a profit, ”added Kelley.

Of course, several Kambi operators want to live in New York. Could we see Kambi bid for a platform with BetRivers? barstool Sports betting and the Seneca tribe as skins?

The Dark Horse contender

After all, the structure isn’t good news for bet365. The company bought equity in Empire Resorts back in 2018 especially to gain market access to New York.

But now that United Kingdom-based operator has no obvious bid partner. Bet365 is a global giant but a small player in the US. Would other companies be willing to invite this competition to their offer?

As Stauff said, a company competing for a platform spot is likely to prefer a sub-scale operator as a skin partner.

Susquehanna said in a note on Thursday:

“We estimate that all bidders will include the three state tribal casino operators (Oneida, Seneca, Mohawk) as part of their skins as they do not pose a competitive threat to any of the bidders. And the state will value these inclusions higher than commercial operators according to the bidding rules. “

The budget language stipulates that bids that work with tribal casinos will receive a higher score in the as yet undetermined RFP process.

Other runners for NY sports betting

Elsewhere, Said Stauff The structure wasn’t a bad thing for Penn National, That was always a relative underdog to get into NY via second skin access.

It’s a similar story for BetMGM, that was skinless under the old model. Now the operator has a chance and has its own technology.

MGM also has links with the New York lottery over his Empire City Casino.

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