South Dakota to Become 2021’s 1st New Sports Betting State?

After voters in South Dakota found for sports betting in last November’s referendum, the state’s lawmakers have now finalized their debate and ironed out the details of what the Mount Rushmore State’s sports betting model will look like. Although South Dakota’s voters did not get the opportunity to vote yet on online sports betting, it is widely expected Governor Kristi Noem will add her signature to the lawmaker’s proposal to act on the voter’s wishes to bring land-based sports betting to the casinos of the historic town of Deadwood.

South Dakota’s online sports betting bill SB 44 was passed by lawmakers in the State House on a 58-8-4 vote last week and it allows for a legal framework to introduce bricks-and-mortar wagering in becoming the first piece of legislation before a State Governor in 2021.

Betting on South Dakota’s college teams is not permitted under this proposed laws and prop bets on college games would not be allowed either (where young stars could potentially be lured by the big money offered by unscrupulous match fixers). A state revenue sports tax of 9% would be set under the bill with the proceeds raised to go directly to the municipality of Deadwood.

Online Sports Betting Voted Down a Week Earlier

 While land-based sports betting in South Dakota is pushing forward, the Mount Rushmore State’s lawmakers disappointingly voted down online sports betting a week earlier. House Bill HB 1231 that would have allowed for mobile sports books to be licensed in conjunction with Deadwood’s casinos, a New Jersey – style agreement, was comprehensively voted by 11 votes to one. That legislation would have allowed for online sports wagering within state lines and a unique form of sports betting through licensed bars and liquor stores.

Lawmakers argued that the wording of the South Dakota Constitution, saying that legal commercial gambling must only take place “within the city limits of Deadwood” should be upheld.

“Technology doesn’t change the words of the Constitution,” David Wiest, Deputy Secretary for the South Dakota State Department of Revenue stated.

“The proponents of the internet betting legislation want the Legislature to expand the exemption for sports wagering statewide without asking the voters on another constitutional amendment. That is something quite frankly none of us can do,” Wiest concluded.

Lobbyist and gaming industry expert, Garrett Gross, representing the Dakota Gaming Group had estimated during a state hearing on that proposed online gaming legislation that South Dakota’s residents are already wagering $30 million per month illegally and the state government is missing out on the revenue that could be raised from legal wagers.

“These wagers are not tracked, regulated or taxed,” Gross said during the hearing. “That number should be an eye-opener, because it was for me”, a shocked Gross announced.

The South’s loss Could be North Dakota’s Gain

 In a double whammy of disappointment for the South Dakota state budget and potential online sports bettors alike, North Dakota lawmakers recently passed two different bills through the House that would allow for online sports betting and poker to be put to the state’s residents in a November 2022 referendum. Should that referendum pass, it could potentially see millions of dollars of tax revenue flooding north, with South Dakota’s residents missing out on crucial government funding for programs, services and infrastructure.

If that referendum were to actually succeed, North Dakota’s sports betting model would most like resemble something like successful Tennessee. North Dakota, just like Tennessee, does not have any heritage of legal land-based casinos and would potentially see all of its sports betting performed online.

North Dakota’s sports betting bill now goes to the Senate for a vote on the referendum going ahead.

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