The New York State Gaming Commission’s decision to approve mobile betting licenses for nine gaming operators — including FanDuel, DraftKings, Caesars Entertainment, Bally Sports and others with strong media ties — could be a big windfall for cable, broadcast and streaming sports channels that have spent the past three years forging relationships with sports books.
The New York State Gaming Commission on Nov. 8 issued 10-year mobile betting licenses to a group including FanDuel, DraftKings, Bally Corp.’s BallyNets; and to BetMGM, a partnership between MGM Resorts International and Entain PLC. The second group consists of Caesars Entertainment‘s Caesars Sportsbook; Rush Street International; Wynn Resorts’ WynnBET; PointsBet New York; and Empire Resorts, doing business as Resorts World.
With the approvals, sports bettors in the state will be able to make wagers through their mobile phones. Previously they could only bet on sports at physical casinos. The impact could be huge. New York state is the biggest sports-betting market in the country by some estimates, and could represent an additional $1 billion annually in wagering revenue. Cable, broadcast and streaming sports channels that have been forging relationships with gaming companies since the U.S. Supreme Court first allowed legal sports wagering in 2018 also could reap big rewards.
New York residents won’t be able to begin betting on sports through their phones immediately. The state still has a few technical kinks to work out, but most observers believe mobile wagering will begin well before Super Bowl LVI on Feb. 13, the biggest betting day of the year.
In an interview, Lee Berke, sports consultant and president and CEO of LHB Sports, Entertainment & Media, said the initial impact for sports networks will likely be on the advertising side. But networks, which have spent the past three years forming relationships with betting houses, are also in line to reap big rewards when remote betting becomes part of the game broadcasts themselves.
“As much as sports betting has been legalized in over half the country, New York includes the No. 1 DMA in the country and it’s just going to drive the trend toward the acceptance and the marketing and the development of the sports betting business well beyond where it has been up to this point,” Berke said. “It’s a big moment.”
It’s also a big moment for the state, which will charge each licensee a $200 million one-time fee and tax mobile sports wagering revenue at 51% annually, one of the highest among states that allow mobile betting. But the potential for success in New York is huge. The gaming commission estimated New York would reap about $489 million in annual tax revenue from a $1 billion sports wagering market.
Berke said for the networks, the impact will be seen in programming as well as advertising. He noted that Caesars Entertainment has been involved in a big national ad campaign around its Caesars Sportsbook, which launched in August in 11 states and the District of Columbia — Arizona, Tennessee, Illinois, Indiana, Iowa, West Virginia, Michigan, Colorado, Virginia, New Jersey, Nevada and Washington, D.C.
“You’ve got Caesars in the middle of a national ad campaign even though half the states don't allow sports betting,” Berke said. “They’re already spending, but when you open up individual states, it’s naturally going to create a lot of additional media spend in those states to reach those audiences.”
Berke also said to expect more betting-focused content to be available on TV. “There is going to be a lot of fallout from the rights finally being awarded,” he said.
In the meantime, the addition of New York to the mobile betting arena should drive interest and revenue.
While the gaming commission estimated about $1 billion in New York sports betting revenue, mobile could help boost that figure skyward. New Jersey, which has allowed mobile sports betting since 2018, raked in about $1 billion in sports wagering revenue in September alone. Most of that was via mobile bets.
Some New York legislators have chafed over the lack of mobile sports betting in the state in the past. In an October article in the New York Times, New York State Senate committee on racing, wagering and gaming chairman Joseph P. Addabbo, Jr., a Queens-based Democrat, said the state was missing out on millions of dollars in tax revenue without mobile betting. That same article depicted city residents who regularly bike over the George Washington Bridge to place mobile bets in New Jersey.
According to the American Gaming Association, sports wagering generated $886.5 million in revenue nationally in Q3, a quarterly low for the year because of a limited number of end of summer games, but still up 153.1% from the prior year. AGA said that combined sports betting and iGaming revenue for the first nine months of the year was up 200% to $5.36 billion.
Already the marketing deals are starting to grow. On Nov. 9, Madison Square Garden Sports and Madison Square Garden Entertainment unveiled a multi-year marketing partnership with BetMGM, where the sportsbook would receive substantial brand integration inside the Madison Square Garden arena during New York Knicks and New York Rangers games. As part of the deal, BetMGM will also be featured prominently on regional sports networks MSG and MSG Plus during coverage of the Knicks, Rangers, New Jersey Devils and New York Islanders, highlighted by a virtual blue line during Rangers games and commercial spots during game telecasts, the companies said.
FanDuel and DraftKings probably have the biggest relationships with television networks, having inked a deal with Turner Sports in October 2020 to integrate betting information into content from TNT, TBS and Bleacher Report. That pact also included the ability for Turner to collect referral fees if bettors placed wagers through their sites.
Bally Corp. signed a 10-year, $88 million deal in 2020 with Sinclair Broadcast Group to rebrand that company’s regional sports networks under the Bally Sports name. Bally also launched its mobile betting app, BallyBet, this year in Colorado and Iowa and plans to expand its online gaming reach to other states. In a press release, Bally Corp. chairman Soo Kim said the NYS Gaming Commission approval advances Bally’s footprint and “marks the latest milestone on our journey towards becoming the leading omnichannel gaming provider in the U.S. Above all, we look forward to providing New York's devoted fan base with engaging, best-in-class, sports betting experiences.“
Bally had earlier been rumored to be among the groups that would win approval from the NYS Gaming Commission, and during a conference call with analysts to discuss Q3 results on Nov. 3 (five days before the award was announced), Bally CEO Lee Fenton said that the company was comfortable with its position to gain access to the state, but lamented the proposed high tax rate for participants.
“No one is happy with a 51% tax rate,” Fenton said on the call. “I think that would be true for all of the partners that we‘ve been working with as well. But it‘s a huge state. And therefore, the scale of it means that you can have opportunities.”
Among those opportunities is with Sinclair’s RSNs, which Fenton said Bally’s could leverage within New York and in the outskirts of the state. “So obviously, I think it will change the cost dynamics of all operators that enter that market in terms of how they might address and attack that market. But clearly, New York is not a market that you want to miss out on.”
Other licensees were equally optimistic.
Wynn Resorts said in a press release the New York state approval, obtained as part of a partnership with the Oneida and St. Regis Mohawk compacted tribes, is the 19th market for its sports betting service, WynnBET.
“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,” Wynn Interactive CEO Craig Billings said in a release. “We also look forward to meeting and engaging with new customers in the state via WynnBET."
Caesars Entertainment, also is a partner with FuboTV for that sports streamer’s Fubo Sportsbook in Indiana and New Jersey. Fubo Sportsbook officially kicked off in Iowa on Nov. 3.
Rush Street Interactive currently operates online gaming in 11 states, including Connecticut and New Jersey. Once it launches its New York Sportsbook, the company said it will be one of only three companies that has online gaming access in all three states.
Rush Street Interactive CEO Richard Schwartz said in a release that approval from the New York State Gaming Commission validates the company, “the attractiveness of our offerings, and our ability to deliver value and results to our partners. We are pleased to continue our successful track record of securing access in high-barrier-to-entry jurisdictions, gaining market share, and differentiating our platform through the quality of our products, services, and customer service experience."
The smarter way to stay on top of the multichannel video marketplace. Sign up below.
Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.