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South Dakota House Committee Kills Online Sports Betting Bill

South Dakota House Committee Kills Online Sports Betting Bill article feature image
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Rich Barnes/Getty Images. Pictured: The South Dakota State Jackrabbits mascot.

A measure to legalize online sports betting in South Dakota faltered Friday.

The House State Affairs committee voted 10-3 to kill a bill that would have brought the question of online legalization before voters during the November 2022 election. Under the prospective ballot measure, online sportsbooks would have to be controlled by or partnered with one of the four Deadwood casinos that currently offer the state’s only legal wagers.

It passed the Senate earlier this month by one vote.

An online sports betting measure could still appear on the 2022 ballot if it garners 33,921 signatures before May 3, though chances of that are slim.

The FanDuel– and DraftKings-backed legislation was met with heavy resistance during the hearing from David Wiest, deputy secretary of the Department of Revenue, who took issue with the measure going through the legislature.

“Go and get a petition and circulate it for signatures,” Wiest said. “What has FanDuel or DraftKings done in the past two years? Apparently nothing, except coming here and begging this legislature to hit the easy button to go to the front of the line.”

Sen. Kyle Schoenfish (R), the bill’s primary sponsor, pushed back on that, saying the companies want to align their goals with the state and Deadwood’s casinos.

“Proponents intentionally went through the legislature to work with us to have the language we wanted,” he said.

Potential Revenue Increases

South Dakotans first opted to legalize retail sports betting at Deadwood’s casinos in November 2020 by a 58% margin.

Its been live since September 2021, yielding the state $30,319 off its 9% tax rate. Online betting is currently legal in neighboring Iowa and Wyoming, with launch pending in Nebraska.

Garret Gross of the Dakota Gaming Group, which run a sportsbook at one of the Deadwood casinos, said online expansion could have increased monthly handle and taxes to $77 million and $424,00 respectively once the market matured.

Casinos to Deduct Federal Tax

The committee also unanimously advanced a bill Friday that would exempt casino’s taxable gross gaming revenue from the 0.25% federal excise tax on wagers. It next heads to the full House for consideration.

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