Deadwood Casinos Still Pushing For Legal Sports Betting In South Dakota

Posted on June 23, 2020

The COVID-19 pandemic may have altered plans to educate voters about a proposal to legalize South Dakota sports betting, but it wasn’t sufficient to stifle the push altogether. Casino operators in Deadwood are determined to get it done.

South Dakota voters will decide whether to amend their constitution in November, and Deadwood casino operators are expending resources to ensure it passes.

Push to legalize South Dakota sports betting

For Deadwood’s casino operators, the opportunity to offer sports wagering is an attractive one. It may not necessarily be a game-changer in terms of win, however.

Operating a sportsbook, especially only on a retail basis, isn’t typically a high-profit venture. A typical monthly win for legal books in the US is about 5%-7% of handle.

According to a study by the UNLV Center for Gaming Research, over the past 10 years, Nevada sportsbooks have averaged a 5.3% annual profit margin.

Sportsbooks have to pay all the expenses out of that money, including labor, marketing, rent, taxes and utilities, among other things. It’s not uncommon for sportsbooks to lose money.

For casino operators, running a sportsbook is just like offering a buffet or salon. It’s another amenity that the casino offers to guests to maximize their spending.

That’s why the Deadwood Gaming Association¬†(DGA) is such a proponent of the amendment proposal. Mike Rodman, the executive director of the DGA, expressed optimism about this fall’s vote.

“I think that most people would rather see that sports wagering happens in a safe, legal, regulated environment than happening illegally. And I think that’s going to be the tipping point for the voters of South Dakota.”

Although it’s uncertain how frequently it occurs, South Dakotans currently must travel to Iowa casinos to enjoy legal sports betting.

Though, IA sportsbooks may still enjoy one huge advantage over Deadwood casinos even if voters approve the amendment.

Iowa’s online advantage

The most significant advantage that Iowa’s regulatory structure could have over South Dakota’s is online sports betting. In SD’s proposed framework, legal wagering could be restricted to Deadwood and tribal casinos.

The amendment proposal itself is mum on whether it would allow for online wagering in South Dakota. The amendment merely authorizes wagering and empowers the legislature to craft the framework.

In other states, tribal casino leaders have lobbied against online betting. It’s uncertain whether Deadwood casinos would be as staunchly opposed. Some wiggle room might exist on that subject.

In many states, online sportsbooks operate in partnership with land-based casinos. IA casinos currently enjoy another benefit, as the state mandates in-person registration for online wagering until Jan. 1.

If Deadwood casinos reject a similar structure, that could ensure that legal betting only takes place in person in SD. That could be a good situation for IA sportsbooks.

Especially after the in-person requirement sunsets, many SD bettors may find it more convenient to cross the state line and place wagers on mobile betting apps than to drive to Deadwood or an SD tribal casino. If that happens, the effect on handle in IA could be minimal.

The most important task at hand is motivating the electorate to approve the referendum measure. After that, SD can look to make its marketplace competitive.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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