Deadwood casinos are once again betting on South Dakota voters to allow them to expand their gaming choices. Amendment B authorizes the Legislature to allow wagering on sporting events at Deadwood casinos. If approved, tribal casinos would also be allowed to offer sports wagering.
“We know that sports wagering is happening in South Dakota,” said Mike Rodman, executive director of the Deadwood Gaming Association. “It’s happening illegally.”
Illegal bets are placed using bookies or websites. According to Rodman, players prefer a legal way to place their bets. That was evident, he said, when Grand Falls Casino in northwestern Iowa began offering sports betting.
“People were going across the border to place their wagers,” Rodman said.
Iowa, along with Colorado and Montana, are seen by Deadwood casinos as their main competitors. Iowa got sports betting in August of 2019 and it came to Colorado and Montana in May of this year.
“We want to continue to be competitive as a gaming destination,” Rodman said.
The biggest events for sports wagering—March Madness and the Super Bowl—take place during traditionally slow times for Deadwood casinos.
“Those are opportunities to drive more traffic to Deadwood,” Rodman said.
Deadwood gaming revenues are taxed at 9%. In 2012 a 1% tax was added that goes to the state’s general fund. The original 8% tax has 40% going to tourism, 10% to Lawrence County and 50% going to Deadwood historic preservation until that fund reaches $6.8 million. At that point 70% of the 50% goes to the state’s general fund, 10% to the local school district, 10% to other Lawrence County municipalities and 10% to Deadwood historic preservation.
Deadwood casinos also fund the state gaming commission, historic preservation grants and treatment programs for problem gamblers.
While the decision is up to the Legislature, Rodman assumes that sports wagering would be taxed at the same 9% rate.
Estimates on how much would be wagered at Deadwood vary. In December 2018 the Legislative Research Council estimated that $2.5 million would be wagered annually.
A gaming industry study estimated bets of $6.1 million annually creating 152 additional jobs in Deadwood and an overall boost to Deadwood gaming of 15%.
“Adding sports betting wouldn’t be of any significant value,” according to Rep. Steven Haugaard, R-Sioux Falls. “It’s of very little value to the state. It’s a net loss if even one person becomes addicted.”
South Dakota has an estimated 15,000 problem gamblers. Haugaard, who serves as the Speaker of the House in the Legislature, predicts young people will be tempted to channel their enthusiasm for fantasy football into sports wagering.
“An obsession with sports can certainly lead to an obsession with sports betting,” Haugaard said. “It really shouldn’t be a training ground for young people.”
Technology could bring sports betting out of Deadwood casinos. Rodman said Iowa and Colorado use “geofencing,” a technology that allows registered bettors with a phone app to place their wagers from anywhere in the state.
Montana uses pinpoint geofencing, allowing registered bettors to place their wagers if they are in one of the state’s liquor stores.
That option is available, Rodman said, “if other organizations wanted to be part of sports wagering.”
Haugaard notes that after Nevada, South Dakota is the most reliant on gaming revenues to fund state government.
“There’s a general degradation of individuals’ lives when they become obsessed with these things,” Haugaard said. “We just shouldn’t be taking advantage of vulnerable people.”
Amendment B is on the statewide ballot in the Nov. 3 general election. Absentee voting begins Sept. 18.