South Dakota Ready to Become Latest State to Welcome Legal Sports Betting

South Dakota made good on their desire to welcome legal sports betting into their jurisdiction Thursday when Senate Bill 44 was signed into law by Governor Kristi Noem. Constituents overwhelmingly voted on the November election ballot to bring on a sports betting platform at Deadwood gaming facilities, as well as tribal gaming facilities in the state.

“We’re that much closer to having legal sports wagering,” Mike Rodman, executive director of the Deadwood Gaming Association, said Friday. “Our next step will be working with the South Dakota Commission on gaming to promulgate the rules. Once the commission approves the rules, it’ll go back to the interim rules committee for final approval, and then it will be official. We expect that process will take a little bit of time to get everything in place.”

While somewhat limited at this time, it is expected that the South Dakota Legislature will be able to effectively use the 2021 session to approve the rules and regulations for a September launch of the platform, just in time for the 2021 NFL season. Along with the drafting of the regulations comes hope that a more expansive platform will become a reality and that 20 or so sportsbooks will become operational within the state.

Timeline of the Legislation

Legal sports betting became a reality in South Dakota in relatively quick fashion. Senate Bill 44 was drawn up and eventually introduced to that lawmaking body in January and after some debate and was passed by a 32-2 margin on February 9 with minimal amendment or opposition, except interestingly, the aspects that would bring about mobile wagering for the state.

The Bill was quickly sent to the South Dakota House the next day where it received its first reading. It was March 4 that Senate Bill 44 got final approval among lawmakers after a 58-8 House vote. March 10 was the date Bill 44 was officially sent over to Governor Kristi Noem for her to sign it into legislation. She did so on March 18 with the intention on enacting the law July 1.

The Market

The state of South Dakota is small, so the legal sports betting market isn't expected to elevate into any elite category. South Dakota is the 46th-most populous U.S. state with under 1 million residents. That said, the American Gaming Association has projected $6.1 million in sports wagering for Deadwood with the overall impact on gaming for South Dakota being $22.1 million with 152 full-time jobs being created.

As of now, the plan is for a casino at Deadwood to host the legal sports betting platform. It will be in-person to start with mobile bets allowed just on premise in Deadwood casinos after in-person registration for the platform. There will be a 9% tax rate on gross gaming revenues which will go to mitigate some of the COVID related decimation of state and local coffers.

That's just a start. There is optimism that the platform will quickly expand and that there will be more locations soon. “There’s been a lot of excitement,” Mike Rodman said of sports betting coming to Deadwood. “From the casino operators, I’ve had conversations with some of them, and I’m estimating that sports wagering will open with at least 10 properties here in Deadwood that will offer sports wagering. That will give us a healthy mix for patrons to go and place their sports wagers.”

As the Bill is written, there will be no betting allowed on high school sports, minor league sports, college teams from South Dakota or prop bets on individual college athletes.

The Bills That Died in the Legislature

There were many attempts to broaden South Dakota's legal sports betting platform beyond what Senate Bill 44 contained. HB 1231 looked to allow mobile sports wagering with servers located on Deadwood properties and HB 1211 looked at ways to allow sports betting to businesses with liquor licences through a kiosk-model.

All were struck down in the legislature but the idea of expansion beyond the one Deadwood location certainly isn't dead. “I think the legislature and the governor looked at it with kind of a go-slow approach,” Rodman said. “Let’s get sports wagering implemented and let’s make sure that we can properly handle sports wagering and properly regulate it. Then we can look down the road. That’s my perception.

“I know that there were conversations and some legislators were amenable to expanding it to outside of the city limits of Deadwood, so we’ll just have to wait and see how that plays out in future legislature. We’re just pleased they moved forward with the will of the people and we’re going to get that up and running this year.”

So...

While the legislation seems narrow for South Dakota bettors right now, there is hope that sports betting will take place among the state’s 11 tribal casinos sometime this year. Things remain unclear as to exactly what the language means, however. Especially the language surrounding a potential mobile sports betting platform.

Citizens are scheduled to have their say June 16 during a public hearing on the matter. Final rules for the legal sports betting platform will be introduced and discussed then, before being implemented.

Everything is pointing to a late-summer launch for legal sports betting in South Dakota. Stay tuned to see which operators will take their chance on a new and exciting South Dakota market