Deadwood Gaming Proponents Hope South Dakota Voters Keep Sports Betting Measure Alive

Posted on October 1, 2020 - Last Updated on October 13, 2020

If a statewide vote on South Dakota sports betting goes the way of the proponents this fall, Iowa casinos could see fewer bettors from their neighboring state next year.

Amendment B would add sports betting to the list of gambling that Deadwood casinos can offer. However, the proposal faces some opposition and would only open the door for the state legislature to act.

Latest on push for South Dakota sports betting

South Dakota voters will have their say on Amendment B on Election Day this year. However, absentee balloting began Sept. 18 because of a petition drive by Deadwood casino advocates and state legislators.

The measure would need a simple majority of 50% plus one to become law. It would amend Article III, Section 25 of the SD Constitution. It would only authorize sports betting within Deadwood and tribal casinos as those gaming compacts allow.

A proponent of sports betting in SD

The ballot information from the SD Secretary of State, Steve Barnett, contains arguments for and against the proposal from SD legislators.

South Dakota state Sen. Bob Ewing, who sponsored the amendment proposal, makes the argument in favor of it:

“Deadwood is in my district and as such, I’ve willingly carried legislative bills as the prime sponsor in the SD Senate. While some do not gamble or support gaming, I have always supported gaming in Deadwood, as it is permissive. No one has to participate. Whether one chooses to wager is solely their own decision.

“With that said, my sponsorship of bills for the Deadwood gaming industry has been successful in adding keno, craps, and roulette. This past session, I was successful in helping to add sports wagering to be voted on in the upcoming general election. If passed, (it) will add another option for people to support and wager on sporting events. Deadwood will then be on a level playing field, competing with other states that allow sports wagering. The tax dollars raised by Deadwood gaming are enjoyed by local cities, schools and the state of South Dakota.

“I am a proponent of adding sports wagering to assist Deadwood in attracting more people to the beautiful Black Hills, which has become a destination city. The whole state enjoys the dollars spent by tourists traveling across South Dakota on their way to Deadwood.”

The counterargument

Steve Haugaard, the SD state Speaker of the House, counters Ewing’s argument:

“Lots of people gamble and you see it every day at the gas station and corner casinos. Conservative estimates indicate nearly 15,000 South Dakotans are problem gamblers. Many of those are addicted to gambling. That’s equal to the population of Mitchell, Spearfish, Huron, Yankton or Pierre.

“Many are suffering and some take their own life. Addiction brings deep regret and shame. Many of our friends, family and neighbors are overwhelmed by their gambling addiction. You know them personally. If their pain is too great, they will use a gun, a rope or pills. That addiction is partly due to the fact that we, the state of South Dakota, cared more about revenue than human lives. Suicides are happening every week across our state. Sports betting would be a stumbling block for many people.

“The pandemic has taught us that we need to respect and care for our fellow man. Some say that you cannot legislate morality. If this was true, then we wouldn’t have any laws. It would simply be survival of the fittest, but that isn’t who we are. We do make laws for the public good. South Dakotans care for one another. This isn’t a liberty issue or a revenue issue; this is a life issue. Sports can already be an obsession. It shouldn’t be a training ground for young people to develop a gambling addiction. The few dollars that would come from sports betting pales in comparison to the damage it causes.

“We are the second-most gambling dependent state in the nation. We don’t need to make that worse. No one should take advantage of vulnerable people. Don’t vote for a new form of suffering. Join me in voting for families free from addiction. Vote no on sports betting.”

A ‘Bet for South Dakota’

The proponent website Yes on B in South Dakota cites an Oxford Economics study. That study says legal sports wagering will add $6.1 million to the economy in SD, create 152 permanent jobs and produce over $2 million in annual tax revenue.

As Ewing stated, another argument for ratification is keeping Deadwood competitive with other gambling destinations. Voter approval may be just the beginning of a long process, however.

Why Deadwood casinos may have to wait

Enacting the amendment is just the first step. All it does is give the legislature the authority to regulate sports betting in Deadwood.

The state legislature would have to decide the following and more:

  • How much to tax sports betting handle.
  • The process of licensure.
  • The rates for licenses.
  • Whether to allow online wagering and, if so, at what scale.

The process of working out a legal framework could take months, even if everyone is on the same page. Mike Rodman, the executive director of the Deadwood Gaming Association, thinks there’s at least a consensus for a 9% tax on handle.

With opponents like Haugaard in powerful places, the process of regulation could get bogged down. Additionally, SD courts may have to weigh in on the issue of online wagering.

As the amendment only authorizes sports betting at Deadwood and tribal casinos, that would suggest statewide online wagering would require further legislation. There’s a potential workaround, though.

SD could follow RI’s lead

SD could take a page from Rhode Island‘s legal playbook. Its constitution also only explicitly authorizes sports betting at its brick-and-mortar casinos.

That’s because the servers on which statewide online sports betting happens are at those casinos; however, it exists under that umbrella. Deadwood and SD tribal casinos could replicate that model to offer online wagering across SD.

Those are all secondary concerns right now. If the vote goes the way that Haugaard hopes, there won’t be any discussion over how to regulate South Dakota sports betting in the next legislative term.

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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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