Industry stakeholders weigh in as New York sports betting moves forward

Officials in New York State have added the recently minted mobile sports betting regulations to the Empire State’s public register, inviting comment from members of the general public. The legislation was signed into law by disgraced former Governor Andrew Cuomo before his departure in August, with the first licenses issued earlier this month to nine operators. In tandem with making the request for public feedback on the published standards, the register reveals comments from a number of operators, data suppliers, and technology companies. In all, seven responses were sent by these businesses to the New York State Gaming Commission (NYGC), which oversees gambling regulation in the Empire State. DraftKings was the largest respondent to the NYGC’s request for feedback on the mobile sports betting regulations, making requests for changes in several key parts of the legislation. The Boston-headquartered operator suggested limiting the number of employees who would need to be licensed as key employees, clarifying that employee registration applies explicitly to those involved in the operation of mobile sports wagering in New York and that the registration requirement should apply annually rather than quarterly. Further, the US sports betting heavyweight considered this to be an “overbroad” requirement, all assertions which were rejected by the NYGC. DraftKings suggested limiting the rule on official league data to only “commercially reasonable” league data and to wager types other than the outcome of the sports contest and wagers placed in-game. DraftKings further proposed that once a skin receives authorization to use an alternative data source for a sports wager type, then all skins should be allowed to use that same source to settle wagers. The Commission agreed that upon approval of an alternative data source, such source should be available to all licensees to settle wagers and that the addition of such clarification is not a substantial revision. DraftKings suggested that remittance of mobile sports wagering taxes be monthly (instead of weekly), something which was rejected by the NYGC to maintain consistency with land-based operations. The operator also advised that a platform provider’s gross gaming revenue reports should be required from either accounting or finance department personnel of a platform provider, which was accepted by the NYGC. DraftKings proposed that the rule governing withdrawals from bettor accounts include crediting the customer’s e-wallet as a method of withdrawal, a change which was dismissed by the NYGC. Targeting promotions made via its platform provider, DraftKings suggested that submission of promotions be limited to new promotions and that a skin should not be required to submit substantially similar promotional mechanisms the Commission has previously approved. “The Commission disagrees, as requiring all promotions to be submitted enhances regulatory control and best protects consumers. Approval of promotions may be described generically, reducing the concern about advance-notice submission deadlines,” the NYGC wrote. In its own feedback to the NYGC, Penn National Gaming argued for a rephrasing of the rule on the usage of official league data, with alternative language to say league data “is preferred” for wager determination. The Barstool sportsbook operator recommended shifting the burden to the NYGC to reject, rather than affirmatively approve, an alternative data source. Its request was also summarily rejected, as was a separate request to remove “odds benefit” and “odds boosts” from accepted promotional wording, citing consumer protection and regulatory concerns. Penn National advised on amending the rule concerning review of the accuracy and timeliness of data feeds used in a mobile sports wagering system, suggesting responsibility be placed on the skin or platform provider. However, this was similarly rejected on grounds it would confuse and potentially hamper transparency in reporting, as were proposals to remove requirements to report all suspicious betting within seven days. As part of its response and an obvious nod to its sports betting data war with Genius Sports, Sportradar argued that data suppliers be allowed to demonstrate to the NYGC the suitability of an “alternative” data source. In this instance, the NYGC amended statutes to allow these requests to be made by licensees via written petition. In the case of the New York Racing Association (NYRA), the horseracing entity sought clarification on whether an electronic wallet would be used, something which the NYGC confirmed, albeit with a proviso that it satisfies existing racing and parimutuel betting laws. Responding to the call for feedback, information technology company Bulletproof proposed that specific areas of the state where mobile sports wagering may not occur should be defined and that the level of field testing involved should be set forth in regulation. However, the NYGC rejected the calls for greater definition on prohibited areas, as well as stating its belief that a flexible, adaptable approach to field testing would better suit the market. Despite being rejected in these areas, the NYGC approved proposals made by Bulletproof in respect of internal control changes and independent assessments, approving wording changes in these areas. The regulatory process remains on track for the anticipated launch of New York online sports betting before Super Bowl LVI on February 13, 2022.