The piece of legislation that aims to let South Dakota residents vote on whether they want to legalize sports betting has been approved and sent on to the full Senate floor.
On Friday, the state’s Senate Taxation Committee advanced Senate Joint Resolution 504 by a narrow 4-3 vote during a hearing that included testimony in favor and opposition of the measure. SR 504 will now head to the full Senate floor for further consideration.
The committee passed the measure despite reluctance from some committee members, with one of those doubters eventually voting in favor of advancing the measure for full Senate consideration.
South Dakota offers retail sports wagering
South Dakota has welcomed legal sports betting in the past through a constitutional amendment, with residents voting in a November 2020 election to authorize retail wagering. The state’s active gaming law only allows physical sports betting at commercial casinos in Deadwood and at the state’s two tribal casinos outside the city.
SR 504 is the latest effort to expand South Dakota’s gaming market with online wagering.
“We’re missing out on an opportunity that presides here,” said SR 504 co-sponsor Sen. Casey Crabtree during Friday’s hearing. “The voters get to decide if they want this, and the legislature builds the guardrails and safety nets into the future.”
Proponents of SB 504 also pointed to the popularity of wagering and the lack of access statewide for South Dakota residents and visitors who want to place online wagers.
“That’s what we’re talking about fixing,” said Sen. Steve Kolbeck. “We’re talking about giving the citizens a chance to vote to see if they want to fix that problem.”
Other proponents of SR 504 during the hearing included GeoComply and Liv Hospitality.
Opponents of online sports betting in South Dakota
SR 504 has gathered support from lawmakers and key stakeholders in gaming and hospitality, but the measure is also drawing public health concerns.
“You can’t fix problems with gambling revenue because you create other problems,” said Norman Woods of advocacy organization Family Voice Action.
SR 504 is also receiving pushback from the South Dakota Catholic Conference.
“The availability of instant access to wagering on one’s phone or mobile, an impulse that can be instantly fulfilled at any time, in any place, has shown to be conducive to addiction that increases harm to individuals and families,” said Executive Director Michael Pauley. “These are the reasons we believe that addictive forms of gambling, such as what would be enabled by SR 504, should not be enshrined in the state constitution.”
The framework of online wagering under SR 504
Crabtree’s online sports wagering measure proposes requiring potential operators to partner with one of South Dakota’s land-based casinos, under the condition that an operator’s servers must be located within Deadwood city limits.
The bill does not explicitly provide an exact tax rate for online sports wagering. Retail sports betting in the Mount Rushmore State is taxed at a 9% rate on gaming revenue. Under SR 504, 90% of tax revenue from online sports wagering would be allocated toward property tax relief or to reduce property taxes in the state. The bill also requires that retail tax revenue be used to fund “the restoration and preservation of Deadwood.”
Since its drafting, 10 Republican senators have signed on as co-sponsors of the bill. Lawmakers hope to carry that momentum to the full Senate floor.
