South Dakota legislature approves sports betting bill

South Dakota lawmakers overwhelmingly approved sports betting legalization last week, and it now needs Gov. Kristi Noem's signature before passing into law.

The Senate had passed the bill 32-2 in February and the House followed, 58-8, last week. Legal sports wagers could possibly kick-off before the end of 2021. Under the bill, South Dakota bettors can wager in-person at casinos in the historic gaming city of Deadwood. Bettors will be able to wager through apps while physically within casino properties.

South Dakota tribal casinos will also be able to open retail sportsbooks, while statewide mobile wagering is not permitted, as reported by The Action Network. The retail-only authorization came after South Dakota voters approved sports betting on a 2020 ballot measure even though several top lawmakers campaigned against the proposed constitutional amendment.

Several mobile 2021 wagering bills gained little traction in the legislature. The amendment only permitted betting within Deadwood city limits — and, by existing law, Native American casinos — but mobile backers proponents argued online wagering was legal if the computer servers were physically within the city. Ultimately, the potential legal challenge never materialized as opponents easily killed mobile authorization bills in committee.

Sportsbooks will be taxed 9% of gross gaming revenues, slightly below the national median average. This rate is competitive enough that it could attract all major sportsbook operating partners between the roughly two-dozen Deadwood casinos, but the relatively limited revenue potential could dissuade would-be entrants, especially smaller companies.

Iowa is the only neighboring state currently with statewide mobile wagering. North Dakota and Wyoming are considering online bills this year, and Montana has already approved retail betting. Nebraska voters approve casino gaming on a 2020 ballot measure and lawmakers are currently working through sportsbook legislation.

The bill is awaiting signatures from Speaker of the House Steven Haugaard and Senate President Larry Rhoden, part of the bill finalization process, before it goes to Noem’s desk. This could come as early as this week. Once formally transmitted to the governor’s office, Noem will have five days (excluding weekends and holidays) to either sign the bill or let it pass into law without her signature. She initially opposed legal sports betting upon taking office in 2019, but warmed to the idea as a new revenue generator in 2020.

Assuming the bill passes into law in the coming weeks, South Dakota regulators will then have to promulgate rules, a process that has taken between three and 18 months in other states. In a best-case scenario, Deadwood sportsbooks could be open ahead of the 2021 football season.