The New York Racing Association recently awarded a contract to Betdaq parent company Global Betting Exchange to develop a new advance wagering service and improve online betting in the state of New York.
NYRA's decision has come under scrutiny after the Franchise Oversight Board said the racing association failed to conduct a competitive procurement process in adherence with approved procedures.
The Franchise Oversight Board, which has amongst its goals maximizing the state's revenues from pari-mutuel betting on racing, found issues with the document listing the specifications for the required online betting services.
According to FOB, NYRA did not specify minimum qualifications to participate to the bidding process and also failed to identify the criteria that would be used to judge bidders, which ended up being disqualified for a number of reasons, none of which had been foreseen by NYRA.
AmTote and Sportech were disqualified because of their reliance on a totalizator platform; TVG, TwinSpires and eBet were disqualified because they offered to white-label their platforms with only minor cosmetic customizations; BAM Software was disqualified because of the small size of the company and several other because direct competitors.
Global Betting Exchange itself was initially disqualified because of its high price, but after that NYRA abandoned the competitive procurement process, Global Betting Exchange was awarded the contract directly, with NYRA stating that the betting exchange operator is the best company for developing an advance wagering platform.
In its memorandum, the Franchise Oversight Board said that once NYRA began looking at other strategies for an advanced technology platform, which included conversations with other track operators about the possibility of forming an industry cooperative approach, it had an obligation to undertake a new competitive bidding process and to set out new requirements.
Because of the new approach, the bidder pool could have changed completely. Since this didn't happen, NYRA has not sufficiently demonstrated that Global Betting Exchange is the only company in the industry capable of developing the advance wagering service required by the state of New York.
Industry commentators criticized NYRA for its lack of transparency and for initially trying to stop the FOB memorandum from being made public, but eventually the Board of Directors of the New York Racing Association confirmed that a new bidding process will take place within 90 days and that Global Betting Exchange will be allowed to participate.