South Dakota voters approved a constitutional amendment to allow sports betting in November 2020. The state legislature passed laws to create a retail sports betting industry in Deadwood. This allows sports betting counters and kiosks in casinos in Deadwood, and by default through the federal Indian Gaming Regulatory Act, on South Dakota reservations.
This was a huge first step in creating a South Dakota sports betting industry. However, the plan is far from finished.
South Dakota Governor Kristi Noem opposes all gambling expansion, including mobile sports betting. Her stance allows offshore sportsbooks to have a monopoly on remote sports betting in South Dakota, while not permitting legitimate South Dakota businesses to enter the market.
It is an odd position in a state where gambling raises more tax dollars than any other form of revenue except sales tax. The governor’s opposition killed any chance for South Dakota to have mobile sports betting in 2021 and 2022.
The state legislature came up with an idea to get around Noem’s opposition to one of the state’s largest industries.
A constitutional amendment was proposed that would require mobile sports betting to be added to the retail sports betting that already occurs in Deadwood. The resolution already passed the state senate. The state house is debating the bill at this time. If it passes both chambers, it will head to South Dakota voters in November 2022. Governor Noem can’t veto it.
Why mobile sports betting makes sense for South Dakota
There are several reasons that mobile sports betting is a great fit for South Dakota. First, it already has mobile betting on horse racing. That has been legal in South Dakota for nearly 15 years. There are no known issues with this form of betting. It has become the only way for most South Dakotans to bet on horse races.
South Dakota mobile sports betting would create jobs. These jobs are currently in countries like Antigua and Costa Rica.
South Dakota taxes casinos at a rate of 9%. This includes sports betting. That money goes towards the revitalization of Deadwood and to the surrounding communities. Some goes directly to the state’s general fund. This is free money that is already being spent by residents in other states and offshore.
You may have noticed how many sportsbook ads there are on television. These companies do not advertise through local South Dakota media because the market is not open. If it does, South Dakota media companies would immediately benefit. This advertising money could make or break a small media organization, like a newspaper.
Making South Dakotans drive to Deadwood to make a sports bet when most Americans can make a sports bet from the comfort of their own home is an unnecessary inconvenience. For many South Dakotans, it is easier to drive to Iowa or Wyoming to make a mobile sports bet, and even easier to make the bet at an unlicensed offshore site from their home. The state loses every time a resident does any of that.
Deadwood casinos will make more money from licensing partnerships if mobile betting is permitted. Sportsbooks generated about $2.7 million in handle in the last four months of 2021. The statistical win was about 1% of that, or about $270,000. The total Deadwood win during this time was nearly $50 million.
Sports betting made up about 0.3% of that amount. Most states, on a percentage basis, generate 1-2% of their overall gaming revenue from sports betting. The cause of this is the lack of mobile betting in the state.
The future of gaming is on mobile devices and over the internet. It is time for South Dakota to join more than 20 other states in making that happen.