South Dakotans May Not Have To Travel To Iowa To Place Legal Wagers For Much Longer

Posted on March 6, 2020

The days of Iowa’s legal sportsbooks pulling customers from across part of its western border may be numbered. A South Dakota sports betting referendum could legalize the activity in the Mount Rushmore State.

South Dakota Legislature has enacted a bill to put the matter to the state’s registered voters. The question now becomes if they will follow suit.

What could happen with South Dakota sports betting?

The South Dakota House, which defeated a similar bill last year, narrowly passed the measure on Tuesday. The measure is a simple one.

All it would do is repeal restrictions upon sports betting right now. It doesn’t provide any regulatory framework in the state.

In that regard, the legislature would have more work to do. Officials in Pierre would have to draft more legislation to determine matters like whether to allow gambling outside of Deadwood and how to tax wagers.

If the state’s voters don’t approve the ballot measure, the matter of the legality of sports betting will be settled for now. Proponents of gambling expansion there could try again in the next legislative session, however.

Although proponents of the bill are optimistic, there is little hard data to go on in terms of support among the state’s voters. In most states, voters tend to split on this issue along rural and urban lines.

Nearby Colorado saw this split in its own voter referendum on sports betting last year. Urban voters supported the measure by drastically higher margins than rural voters.

By most standards, South Dakota is a sparsely populated state. That suggests the referendum may fail. The measure has a powerful ally, however.

Private parties using their influence in November

Casino operators in Deadwood will likely support the referendum in November. Although it’s unclear exactly to what extent they will do so, such support could include a mass media voter education campaign.

There could be similar messaging from opposition parties, however. In other states, such messaging has come from politically conservative and religious groups.

Tribal casinos around the state could get in on the messaging campaign as well. South Dakota’s 11 such facilities would also be able to offer sports betting if the referendum passes.

Currently, the only place where the state allows commercial gambling is in Deadwood. Iowa sportsbooks may not see much of a drop-off if that remains the case even if the state legalizes sports betting.

Why Iowa sportsbooks may not feel much effect

For a lot of South Dakotans, crossing the eastern border into Iowa to place online wagers may still be more convenient than driving to Deadwood. That’s especially true if their state limits legal wagering to brick-and-mortar sportsbooks in that city.

Because there are still so many variables, Iowa sportsbooks won’t know how legalization in South Dakota will affect them for a while, even if voters approve the measure. It’s possible that the effect may be minimal.

What’s certain is that Iowa’s in-person registration requirement should expire before legal sportsbooks launch in South Dakota, as that is set to sunset on Jan. 1. That may give Iowa’s operators the edge they need to keep handle coming in from across the border regardless of what South Dakota does.

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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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