South Dakota Voters Could Bring Sports Betting to Deadwood

South Dakota Voters Could Bring Sports Betting to Deadwood
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Editor’s note: One in a series of articles on U.S. sports betting and gaming issues that will appear on Nov. 3 ballots.

South Dakota would like to offer the same gaming options nearby states have and bringing sports betting to Deadwood is key to keeping up with them, a local gaming official says.

On Nov. 3, South Dakota voters could allow Deadwood’s commercial casinos to offer sports wagering by voting yes on Constitutional Amendment B.

The constitution currently authorizes the legislature to allow certain types of gaming in Deadwood such as roulette, keno, craps, limited card games and slot machines. If Amendment B passes, it would authorize the legislature to include betting on sporting events as a type of gaming permitted in Deadwood.

“It’s important for Deadwood to stay competitive as a gaming destination and offer the same gaming options that surrounding jurisdictions are offering,” Mike Rodman, Deadwood Gaming Association Executive Director, said. “We just think it’s certainly important for Deadwood to be able to do that and have sports wagering here in South Dakota.”

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Other states within the region — Iowa, Montana and Colorado — already offer sports wagering, providing an outlet for South Dakotans to place bets. If sports betting was legalized in South Dakota, the state could potentially add $22.1 million in additional gaming revenue, $2.2 million in additional gaming taxes and 152 direct gaming jobs with $6.1 million in additional income, according to an Oxford Economics study commissioned by the American Gaming Association (AGA).

“That funding formula impacts the state general fund and South Dakota state tourism, as well as the local municipalities in school districts and Lawrence County and the city of Deadwood,” Rodman said.

In 2019, sports wagering went before the legislature and passed in the Senate but fell short in the House. But in 2020, lawmakers were convinced to put sports wagering back on the ballot. Now, South Dakotans will be able to decide the future of sports betting in their state.

“I certainly think the change from one year’s legislature to the next was at the urging of the people in South Dakota, who made the lawmakers who didn’t support it to change their minds and put it on the ballot,” Rodman said.

South Dakota is one of six states that have gaming issues on the Nov. 3 ballot. Maryland, Nebraska, Colorado, Virginia and Louisiana are the others.

Check Out: Latest updates and legal Virginia Sports Betting Sites.

A Legal Option for Bettors

New research from the AGA shows bettors are willing to move from illegal bookies and toward legal options when available in their states. According to a study, average spending with illegal bookies fell 25% in legal sports betting states last year, while legal online and mobile betting spending increased 12%.

Numerous factors played a part in bettors going from illegal gambling to the legal market. The leading reasons were confidence that bets will be paid out (25%), awareness of legal options (20%) and a desire to use a regulated book (19%).

“We’ve known for a long time that Americans like to bet on sports. This research affirms their interest in moving toward the protections of the legal market,” Bill Miller, AGA president and CEO, said when the study was released. “Giving consumers convenient alternatives to the illegal market, like regulated mobile offerings and competitive odds, is key for getting bettors to switch to legal channels.”

The transparency of the legal market has led bettors to prefer legal operators, with 74% saying it is important to bet through legal avenues. Still, 52% of sports bettors participated in the illegal market in 2019, according to the AGA. The study also found that the average consumer sometimes fails to differentiate between what’s legal and illegal, with 55% of consumers who placed most of their wagers through illegal operators left to believe they did so legally.

And unlike the illegal market, regulations can be put in place to curtail bad gambling habits and monitor any destructive betting behaviors.

“South Dakotans want to wager on sporting events, and they want the opportunity to do it in a legal and safe environment,” Rodman said. “We really saw that people of the eastern part of the state started to travel across to Iowa once sports betting was legal in Iowa, and they prefer to wager in a legal and safe environment when they can.

“We think that having it in a legal environment here in South Dakota where the bet limit will be $1,000 and in the illegal market, they can bet whatever. So we think that having some of those controls will be beneficial instead of the unregulated environment.”

Cautiously Optimistic

If South Dakotans approve Amendment B, the 2021 legislature would then be tasked with promulgating rules for it and laying down parameters. Sports wagering in Deadwood could potentially debut on July 1, 2021.

Combined with studies from the AGA showing the majority of gambling is done responsibly and the potential economic boost to Deadwood, Rodman is hopeful sports betting will be endorsed by the citizens of South Dakota.

“The studies from the American Gaming Association state that 90% of gaming customers look at gaming as a form of entertainment,” Rodman said. “They set a budget, and we certainly think that’s going to be the same with sports wagering. We certainly believe that the vast majority of South Dakotans look at this as just a form of entertainment and budget accordingly.

“We’re certainly cautiously optimistic. We’ll wait for Nov. 3 and see what the voters say.”

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