Commercial Gaming

South Dakota Sports Betting Will Likely Include Online Wagering

Now that 57 percent of South Dakota residents voted to legalize sports gambling at Deadwood on Tuesday, the next steps include whether online betting will be permitted and which company will run the sportsbook.

By July, sports betting could be allowed in Deadwood’s 25 casinos. (Image: Deadwood Chamber of Commerce)

“I think we’ll have a bill fairly quickly to at least work on” when the Legislature reconvenes on Jan. 12, Rep. Timothy Johns (R-Lead) told Casino.org on Thursday.

Regardless of when it passes, all legislation in South Dakota becomes effective on July 1. Depending on how quickly the state’s Gaming Commission can craft the rules and regulations and get through public hearings, the first bet could be placed at one of Deadwood’s 25 casinos at that time or shortly thereafter.

Online Gaming, Too?

While Amendment B only authorized the legalization of sports betting within the limits of Deadwood, the expectation is online wagering will be part of whatever the legislature approves.

Of course, Deadwood’s a destination,” said Johns, who served eight years in the House before being elected to the Senate for the upcoming term on Tuesday. “But if you want people to participate, you’re going to have to let them make bets remotely. It can be placed wherever in today’s world. But it would originate in Deadwood.”

South Dakota’s Gaming Commission and the Deadwood Gaming Association will be among the parties with input on the bill. Johns said legislators also will look to neighboring Iowa and Colorado, which have legal sports betting, for guidance.

In Tennessee’s fledgling sports gambling marketplace, FanDuel, BetMGM, and DraftKings were granted licenses. Deadwood would outsource its oddsmaking as well.

It would make economic sense for Deadwood to be partnering with oddsmakers, so I think that will be the model that we’re looking at,” said Mike Rodman, the executive director of the Deadwood Gaming Association, to Casino.org. “There have been several companies that have reached out and would like to have those conversations with us.”

Amendment B also allows sports gambling at tribal-run casinos.

Economic Impact

An analysis conducted in 2018 by the South Dakota Legislative Research Council projected gross revenue on sports gambling to surpass $2 million. Rodman, however, cited an Oxford Economics study that projected gross revenue of $6.1 million.

That was before Iowa and Colorado [legalized sports gambling]. You just look at the numbers coming out of neighboring states, we know that’s very conservative,” Rodman said in explaining the difference.

Beyond the direct impact of sports gambling, the Oxford study projected another $22.1 million would be wagered in Deadwood’s casinos. Plus, there would be additional hotel and food and beverage revenue.

We approached this, one, to keep Deadwood relevant. We wanted to be able to compete on a level playing field,” Rodman said to Casino.org. “And, two, we knew that it would drive further visitation to Deadwood, particularly in the times of the year that we really need it. That’s what we’re most excited about.”

According to the Deadwood Gaming Association, its casinos during the fiscal-year that ended June 30 contributed almost $14.7 million in tax revenue for historic preservation and tourism, as well as city, county, and state governments.

Beyond the finances, Johns said Amendment B recognizes the reality that people were betting on games anyway.

“I know it goes on, and it always has,” Johns said. “It’s nice to legalize what people have already done anyway. And it’s another tax revenue for the state and the city of Deadwood, and we need it. We need the state competitive. Iowa has it. A lot of people over on the east side of the state, I’d bet my bottom dollar that that’s where they’re wagering, is right across the line in Iowa. So, we can gain back some of the business that we’ve lost.”

Meanwhile, police are investigating a shooting that took place during what was called a “Deadweird Halloween event” at a historic Deadwood gaming property and bar.

Bill Huber

Sports, sportsbetting----Football, from games to the draft, is Bill Huber’s passion. A graduate of the University of Wisconsin-Whitewater, a Division III powerhouse where Bill watched games from the bench for a few seasons, he's reported on the NFL’s Green Bay Packers since 2008, first for Packer Report and now for Sports Illustrated’s Packer Central. He's covered two Super Bowls, writing features so insightful that they made some players’ moms cry. When not writing about football, he loves camping with his family, coaching his kids, playing with his two golden retrievers. But his real joy is in going toe-to-toe in cribbage with his wife. Email: bill.huber@casino.org.

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Bill Huber