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The Path to Legalizing Sports Betting in South Dakota

A bipartisan group of state senators introduced a sports betting bill in 2019, but the government voted down that initial bill. The bill, SJR 2, would have created a constitutional amendment giving voters the right to choose whether to legalize sports betting or not.

Members of the House decided to vote against the referendum, which the Deadwood Gaming Association backed. In 2020, lawmakers wasted little time in proposing new legislation that was like the bill that the government shot down in 2019. SJR 501 passed through the House by a vote of 36-27 at the beginning of March, with the bill already having passed through the Senate.

That means that the electorate will get to vote in the referendum on legalizing sports betting, and there is confidence from lawmakers that it will pass. If voters in the state vote yes in the referendum, then the state’s lawmakers will have to pass legislation to regulate the industry. 

It is unclear if lawmakers will include online sports betting when they begin discussing laws. All of the casinos in Deadwood will be able to offer sports betting, but federal law dictates that the tribal casinos will be able to offer bets on sports as well.

South Dakota Currently Forbids Online Casinos

South Dakota strictly forbids all forms of online gambling, and this goes for social gambling as well. The SD casino industry is large compared to the population of the state, but players must do all gambling at brick-and-mortar locations.

The city of Deadwood, SD, is home to all the commercial casinos in the state, but there are nine other tribal casinos in operation as well. State lawmakers have not spent any time exploring online casino gambling, because they know that they will face stiff opposition from leaders in the casino industry. Due to the limited number of residents in South Dakota, casinos are extremely competitive when it comes to keeping their business.

Current Laws Don’t Allow Online Poker in South Dakota

Online poker in South Dakota is not likely to happen anytime soon, especially since the state has not legalized online casinos either. This card game has a very deep history in SD, which is why it is legal for all commercial and tribal casinos to offer live poker games. 

On the other hand, poker games at home are not legal in South Dakota, and it doesn’t appear that the state will legalize playing the online version of this card game from home either.

The Gray Area of Daily Fantasy Sports in South Dakota

Daily Fantasy sports are not legal in South Dakota, but they aren’t illegal either. This might sound a bit confusing, but this is the case for many states throughout the country. State lawmakers have simply not proposed any legislation to legalize DFS, and they have made no effort to regulate the industry.

South Dakota’s Attorney General Marty Jackley made a statement in 2016 stating that he didn’t know if DFS games were skill or luck. Because of this, he stated that his office would not be charging players or operators in the state. 

He made those comments almost four years ago and they still stand to this day. There is a large daily fantasy sports presence in South Dakota, but the state does not accept it as a legal form of gambling.

Playing the State Lottery in South Dakota

The government of South Dakota funds and operates the state’s lottery. Even though the lottery has an online website, players cannot purchase any lottery tickets online. They have to buy them at retail locations that the state authorizes to sell tickets.

SD passed a constitutional amendment in November 1986, giving the government the power to create the lottery. Lawmakers assigned a bill to start the game in April 1987, and they sold the first ticket on September 30, of the same year. 

The South Dakota Lottery is a member of the Multi-State Lottery Association. One interesting fact about the South Dakota Lottery is that the state doesn’t use any tax dollars to fund it.

Other Important Gambling Facts About South Dakota

Horse racing is the only current form of online sports betting that South Dakota allows. The state created its gambling industry to save the town of Deadwood.

Deadwood, SD, is an old mining town, and there was a fear that it would turn into a ghost town if the state’s lawmakers didn’t do something to save it. Awarding Deadwood the ability to build commercial casinos was the most logical option.

Video lottery has been a major topic of debate in South Dakota over the years. The video lottery began in South Dakota in 1989 but a court order shut it down in 1994. It took a constitutional amendment later that year to restart the video lottery industry in the state.

SD makes close to $10 million per year in taxes from casinos in Deadwood. The video lottery brings in close to $100 million per year in taxes, and the South Dakota Lottery brings in close to $50 million annually.

What’s Next for Gambling In South Dakota?

South Dakota has had some very restrictive gambling laws since legalizing casino gambling in 1989, but that could all change in 2021. Sports betting is a real possibility in SD, but the decision is ultimately up to the voters. If voters allow for lawmakers to work on creating sports betting legislation, then there is hope that online casino gambling will be next.

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