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South Dakota Sports Betting Approved by Voters

South Dakota Sports Betting Approved by Voters article feature image

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South Dakota voters approved sports betting on the 2020 ballot, allowing legal sportsbooks in Deadwood as early as next year. The voter-ratified constitutional amendment will also pave the way for the state’s federally recognized Native American tribes to open sportsbooks at their gaming properties.

Voters overwhelmingly supported sports betting, approving “Amendment B” by a roughly 58% – 42% margin.

[Where All 50 States Stand with Sports Betting]

When Will South Dakota Sports Betting Begin?

Sports betting in South Dakota will likely begin sometime in 2021.

The ballot measure amends the state constitution to permit sports betting, but lawmakers will still need to pass critical follow-up legislation that, among other factors, determines tax rates and regulatory measures.

The initial measure passed with bipartisan support, and it appears some sort of sports betting legislation will pass after lawmakers begin the 2021 session, especially since legal wagering was backed by voters.

Assuming a bill passes sometime in the first half of 2021, regulatory officials will likely finalize sports betting rules in time for two-dozen Deadwood casinos and dozen tribal casinos to take their first bets sometime before the end of next year.

The bigger issue will be over how sports betting will be conducted, including the potential for online wagering. The state constitution only permits commercial gaming in Deadwood, but online sports betting backers may argue statewide mobile wagering is permissible as long as the computer servers are located in the town.

With gaming already controversial in one of the nation’s more politically and culturally conservative states, an online push could further complicate what may be a difficult legislative journey. Gaming stakeholders would likely support statewide mobile wagering, which would make up the vast majority of revenues in a sparsely populated state such as South Dakota, but it could face heavy resistance from lawmakers politically opposed to any gaming from outside Deadwood.

Was South Dakota Sports Betting Expected to Pass?

The fate of sports betting in South Dakota seemed like a toss-up heading into Election Day.

It was hard to gauge public interest with little public polling available, and, unlike in other states with 2020 sports wagering ballot measures such as Louisiana and Maryland, leading sportsbook operators DraftKings and FanDuel didn’t contribute financially to the “yes” vote.

South Dakotans had supported expanded Deadwood gaming options in 2014, and attitudes nationally continue to be more favorable toward legal gambling. Sports betting was previously legalized in 22 other states (plus Washington D.C. and Puerto Rico), including neighboring Montana and Iowa, which could have also played a factor.

Elected officials such as Republican Speaker of the House Steve Haugaard said sports betting would exacerbate problem gambling, a fear shared by some of his conservative colleagues (and a portion of South Dakotans). Other Republicans, including ballot-measure sponsor Sen. Bob Ewing, touted the revenue potential from sports betting, especially as it becomes legal in more states and is already occurring illegally through offshore sites and unlicensed bookmakers.

Notably, Republican Gov. Kristi Noem rescinded her previous opposition to legal sports betting after the state faced a budget shortfall from tax cuts and the COVID-19 pandemic. Sports betting tax revenues would be just a tiny fraction of the state budget, but South Dakota voters supported the potential for legal wagering over the existing prohibition.

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