South Dakota Voters Approve Deadwood Sports Betting

Posted on November 4, 2020

The expansion of legal sports betting in the US continues. On Tuesday, South Dakota voters OK’d sports betting within the city limits of Deadwood. And, by a significant margin.

According to The Associated Press, 58.5%  voted in favor of legal wagering with 95% of precincts reporting. For Iowa sportsbooks, the question now becomes whether this will have a significant effect on their business.

Details of South Dakota sports betting vote

The vote in favor of Amendment B sets up Deadwood casinos to offer legal wagering on sporting events in the future. Like in other states, it’s the result of direct action by SD citizens.

Deadwood casinos circulated a successful petition to allow voters in the state to begin casting absentee ballots as early as Sept. 18. It’s unclear how much of a role that played in the winning vote.

With this move, tribal casinos in South Dakota could someday offer legal wagering; however, that might require a renegotiation of their gaming compacts.

All the new constitutional amendment does is authorize the state’s legislature to create a legal framework for sports betting in Deadwood. It includes zero language giving any direction on the matter.

The SD Legislature needs to decide the following issues, among many others:

  • What state agency should regulate sports wagering.
  • The procedures for acquiring a sports betting license.
  • Whether to allow online wagering and to what extent.
  • How much to tax sportsbooks’ aggregate revenue.

There is some insight on that last bullet point. The Deadwood Gaming Association‘s executive director Mike Rodman says he believes there is a consensus in the legislature for a tax rate of 9%.

Until the legislature finishes creating the framework, Deadwood casinos won’t be able to start accepting wagers. Even then, the details of that framework may limit the effect on Iowa sportsbooks.

Why Iowa sportsbooks may not feel much of a hurt

It’s debatable how many South Dakotans cross into Iowa to place bets right now.

Since Deadwood, SD, is at least a six-hour commute to the Iowa border, it may be more convenient to bettors on the eastern side to continue visiting Grand Falls Casino to gamble — even when Deadwood sportsbooks open.

That will largely hinge upon the scheme of online betting in SD. Because the amendment only authorizes wagering in Deadwood, SD legislators may interpret that as limiting all wagering to those facilities.

That could take a couple of forms. It could work similar to online wagering in Mississippi, for example. There, casino patrons can place legal bets online but they can only do so on the premises of the casinos. On the other hand, SD could enact something more like Rhode Island, where the law also limits wagering to casinos. However, RI courts have decided because the online sportsbook’s servers are located on-site, it fits the bill.

That would allow Deadwood casinos to offer online betting everywhere in the state, in theory. By the same token, that would act as a deterrent for South Dakota bettors heading to Iowa.

Photo by AP Photo / Amber Hunt
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Derek Helling

Derek Helling is a freelance journalist who resides in Chicago. 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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