South Dakota Legislators Reject Online Sports Betting Proposal

Sports betting in South Dakota will remain limited to Deadwood after legislators rejected a proposal that would have allowed online sports betting sites in the state.

Senate Joint Resolution 502 earned passage in the South Dakota State Senate before the House State Affairs Committee voted 10-3 against it on Friday. SJR 502 proposed a constitutional amendment to expand the state’s gambling rules to permit mobile betting apps.

Supporters of introducing an online sports betting market to South Dakota cite the millions of dollars in revenue the state is missing out on, while neighboring areas like Iowa and Wyoming can generate profits from internet sports wagering. The same applies to Kansas, where online sports betting is now fully permitted. For January, South Dakota's sports betting handle was just $835,252 and the state made $82,291.

There’s interest from South Dakotans in mobile betting.

According to data from GeoComply, a fraud prevention and cybersecurity solution that verifies players’ location in a legalized sports betting state, more than 6,700 people in South Dakota were blocked from Super Bowl betting sites. Data from GeoComply also showed almost 70% of the bets that were blocked from South Dakota were from people attempting to bet through Iowa sportsbooks.

Opposition to Sports Betting

Opposition from expanding the state’s gambling laws comes from Gov. Kristi Noem’s administration in addition to the Family Heritage Alliance. Department of Revenue Deputy Secretary David Wiest had the most extreme comparison, likening gambling to murder.

“It strikes me that people have been doing lots of stuff illegally. Should we strike those laws too?” Wiest asked the committee during Friday’s meeting. “How about theft? How about murder?”

Wiest also mentioned the Deadwood Gaming Association was not at the meeting to cite how mobile betting could hurt brick-and-mortar casinos. He also believes an online sports betting market in the state only serves to help out-of-state sports wagering companies such as FanDuel, DraftKings and BetMGM, who are regularly among the top operators in each state they launch.

“These folks are obviously sports betting companies, but they are multibillion-dollar sports betting companies,” he said. “They’re the ones that are behind it.”

Despite the failed proposal, supporters of an online sports betting market in South Dakota remain optimistic. A citizen-led ballot initiative is possible if the state’s lawmakers continue to object to mobile wagering. Sen. Kyle Schoenfish and Rep. Will Mortenson both spoke at the meeting and highlighted how the legislature should allow voters to broaden gambling laws in the state.

South Dakota voters approved sports betting in Deadwood during the 2020 election season. Lawmakers and regulators limited betting to only retail locations in the city. Residents aren’t allowed to bet on colleges in South Dakota or prop bets on individual college athletes.