Deadwood Or Bust: Iowa Casinos Keep Revenue Advantage As SD Gov. Signs Sports Betting Bill

Posted By Russ Mitchell on March 19, 2021

You’ll find Grand Falls Casino & Golf Resort about 6 miles outside of Larchwood, Iowa — a town of about 875 residents.

But, if you want to understand why cornfields surrounded such a visitor-reliant industry instead of chain restaurants and movie theaters, keep driving west another 15 miles.

Iowa Highway 9 changes to South Dakota Highway 42, and you’ll arrive in Sioux Fallspopulation 191,000. That Iowa-South Dakota state line makes all the difference for people who want to wager on a Sunday afternoon NFL game.

About 3 of every 5 voters in South Dakota supported Amendment B in November 2020, which allowed Deadwood, SD, casinos to open sportsbooks in the Black Hills community on the western side of the state. Deadwood is a short trip from Mount Rushmore and serves as South Dakota’s version of Atlantic City, NJ, or Reno, NV.

Gov. Kristi Noem on Thursday signed Senate Bill 44, which officially opens the door for sportsbooks there.

Deadwood Gaming Association Executive Director Mike Rodman said geolocation technology will limit sportsbook betting to Deadwood casino properties only. Rodman told PlayIA:

“I think it’s fairly straightforward. It doesn’t allow for wagering on high school sports. It doesn’t allow for wagering on South Dakota (collegiate) teams It’s somewhat restrictive in that regard, but obviously, I think the legislature wanted to be very conservative. “

He later added:

“Realistically, we’re looking at around the first of September as a start date. That’s what we’ll be pushing for. But there’s a lot of ground to cover between now and then.”

South Dakota still catching up to Iowa sports betting

Sports betting became legal in Iowa in August 2019. In-person registration was a requirement at first at Iowa sportsbooks. Bettors could place wagers from anywhere, but they first had to find a brick-and-mortar casino for the initial sign-up process.

But that requirement was thrown out with the 2020 calendar. Iowans and people who visit Iowa can both register and bet online legally from their tablets and smartphones — as long as the betting takes place on the right side of that Iowa-South Dakota border.

Lyon County, Iowa, residents will still take day trips to shop in Sioux Falls, to be sure. But, sportsbook betting brings essential revenue back east into Iowa.

Just ask Basil Hofer, the sportsbook manager at Grand Falls Casino:

“We’ve got such a good retail property here to where our book is probably one of the nicest ones in Iowa. Every Sunday morning (during football season), we’ve got four (hundred) or five hundred people in line. So I don’t see anything changing here.”

Hofer’s correct — South Dakota residents will still come to Iowa to bet on games because of the conservative approach Rodman mentioned in the Rushmore State.

South Dakota voters want to bet on games

The South Dakota Legislature and Gov. Noem had a chance to do more: House Bill 1211 would have allowed any business with a liquor license to install betting kiosks. A Sioux Falls bar and grill owner, for example, could set up a kiosk and connect it to the voter-approved Deadwood sportsbook.

Put another way, Sioux Falls bettors could have used a de facto betting window at their neighborhood tavern under HB 1211 rather than make a 385-mile drive on Interstate 90. The bill didn’t make it out of committee, however.

Southeast South Dakotans will likely continue to choose Hofer’s Iowa workplace over the remote vacation spot to the west:

“Not a lot of people are going to drive to Deadwood to make a bet, you know? And I don’t see the tribal casinos (having) a big impact on this. I don’t think (SB44) is going to change anything here at all. If anything, illegal bookies will just keep thriving in South Dakota.”

Hard Rock watches its neighbors

Mike Adams is the assistant general manager and vice president of operations at Hard Rock Casino in Sioux City. He told PlayIA that monitors two neighboring states:

“Right across the river is Nebraska and probably 3 or 4 miles up the road is South Dakota. That places us in a very unique position. So yes, we absolutely watch everything that’s going on around us. We were keeping an eye on the sports bill in South Dakota. And we’re certainly keeping a very close eye on the expansion of gaming in Nebraska as it relates to a proposed casino in South Sioux (City). It would arguably be less than 10 miles away from our property.”

NE lawmakers consider Nebraska sports betting, too

Nebraska voters also told lawmakers they want gambling expansion with a November 2020 referendum vote.

As the Omaha World-Herald reports, lawmakers debated and ultimately determined that sports wagers qualify as “games of chance” approved by voters. A merged bill would limit sportsbook betting to enclosures within the state’s six newly-formed racinos.

Adams said:

“It’s in the infancy stages. So I think they’re still trying to hash all that out, but it’s certainly something that we’re very keen on watching. I would suspect that you’ll see Lincoln open probably as the first casino followed by Omaha. And then we’ll see where it goes from there.”

The Hard Rock VP estimates 20% to 25% of his casino’s traffic is from South Dakota. He agrees with Hofer in saying a Deadwood-only approach in South Dakota “doesn’t change our model one iota.”

“Probably the biggest question that we get is: ‘When are you going to have entertainment?’ And, we’re certainly hoping to start again in the summer.”

More sportsbook expansion in Iowa?

Adams said remote sportsbook registrations have been convenient for Iowa bettors and his casino has plans to expand the offerings:

“It just opened up another avenue for us, so now we’re just hopeful that we’ll work down the line and perhaps look at partnering for a second skin with, probably, one of your more well-known players out there. It’s a little too early to comment on that except to say that the process is in the works. … We’re definitely seeking partners for our second skin. But quite frankly, it’s not gotten to the point where we’ve narrowed it down to two or three yet.”

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Russ Mitchell

Russ Mitchell has been covering news and sports in northwest Iowa since 1997, including 11 years as managing editor for one of the most acclaimed community newspapers in the state. He looks forward to keeping readers up to date on the growing sportsbook industry in Iowa.

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