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Deadwood officials leading effort to legalize sports betting in South Dakota

Sports betting would be allowed in the 22 Deadwood casinos if the proposed amendment is approved. The city of Deadwood receives up to $6.8 million in revenue from its gaming operations each year. Tom Griffith / South Dakota News Watch

The South Dakota Legislature in January will be asked to pave the way for legalized sports betting in the state.

Proponents pushing a constitutional amendment to allow the gaming in Deadwood casinos want lawmakers to place the question on the 2020 ballot.

Several states now offer sports betting and others are considering it following a U.S. Supreme Court ruling in May. The decision struck down a federal law which banned such betting outside of Nevada. The ruling allows individual states to determine if sports betting will be allowed.

Gaming industry professionals, sports bar owners, even those charged with overseeing South Dakota’s current legalized wagering, acknowledge that illegal sports betting is already occurring in the state. Proponents of legal sports betting contend that South Dakota is missing out on potential revenues in the process.

“I was sitting at the bar at the Ramkota in Pierre and the guy next to me picked up his phone and made a bet on a football game,” said Larry Eliason, executive secretary of the South Dakota Commission on Gaming, the state agency that oversees all legal gambling activities in the state. “Of course, he didn’t know who I was.

“So, we know people in South Dakota bet on sports through bookies now,” Eliason added.

“How much they bet and how many bookies there are, we don’t know. It’s difficult to accurately gauge the extent of any activity that’s illegal.”

South Dakota has had legal gaming since 1989 and 22 casinos are operating in Deadwood. Gaming is only legal in Deadwood and at tribal casinos, though the video lottery is legal across the state.

The proposed amendment would expand the definition of gaming allowed in Deadwood casinos. If approved, the constitutional change also would allow sports betting in tribal casinos.

As proposed, the measure also would return a bigger share of gambling tax revenue to the city of Deadwood. The city has received $6.8 million in revenue each year since gambling was legalized in the state in 1989. The proposed amendment would allow the Deadwood allocation to grow with inflation.

Sports betting is big business in U.S.

An official with the American Gaming Association, which represents a $261 billion casino gaming industry in the U.S., told a U.S. House subcommittee in September that a massive illegal sports betting market currently exceeds $150 billion each year.

“This vast illegal market has fueled criminal activity and left American consumers outside of Nevada with no safe alternative to bet,” AGA Senior Vice President Sara Slane told the House panel. “Nearly 60 percent of Americans were in favor of eliminating the failed federal ban, and nearly two-thirds of Americans believe legal, regulated sports betting would deliver benefits to their communities.”

Since the Supreme Court’s May ruling, 18 states have considered legislation to legalize sports betting and Delaware, New Jersey, Mississippi and West Virginia have joined Nevada in allowing single-game sports betting. Meanwhile, operations in Pennsylvania, Rhode Island and New York are pending, Slane said.

Several other states, including Iowa, Nebraska and New Mexico, are currently exploring legislation to allow sports betting, according to recent news reports.

In view of what’s happening across the country, South Dakota’s gaming industry experts contend that sanctioning legal wagering on sporting contests will permit Deadwood and the state’s tribal casinos to remain competitive with other gaming jurisdictions – the same argument used when craps, roulette and keno were added to the state’s stable of games in summer 2015.

The Deadwood Gaming Association, which led past efforts to increase bet limits and add roulette, craps and keno to the existing slate of poker, blackjack and slot machines, has discussed what it needs to do to make legal sports betting come to South Dakota.

“For Deadwood, legal sports betting creates additional opportunities, particularly as it relates to high-visibility contests like the Super Bowl, Sweet 16, Major League Baseball World Series and the college football playoffs,” said Mike Rodman, executive director of the DGA. “All of those could create excitement, additional marketing opportunities, and would bring people to town. We know the people in South Dakota like sports betting and would like to do it in a legal, safe and regulated manner.”

In addition to giving prospective visitors another reason to come to Deadwood, Rodman noted that bringing legal sports wagering to Deadwood and the state’s tribal casinos would result in additional tax revenues for the state.

“We believe for Deadwood, a $100 million annual gaming market, that we would realize $1 million to $2 million in annual sports betting,” he said.

At least one of South Dakota’s tribes currently operating a casino supports the DGA plan.

“Sports betting is a multi-billion-dollar industry that, until recently, was illegal in most United States jurisdictions,” said Seth Pearman, an attorney representing the Flandreau Santee Sioux Tribe. “We have been actively monitoring the legalization of wagering on sporting events.”

Pearman said the tribe has had conversations with the Deadwood Gaming Association, industry experts and others regarding the possibility of legalizing in South Dakota and intends to work with these partners to further the legalization efforts.

“Sports wagering at the Royal River Casino would diversify the gaming opportunities for patrons, would positively impact their experience overall, and would keep them from leaving the area to legally place wagers,” Pearman said.

This story was produced by South Dakota News Watch, a nonprofit news organization. Find more in-depth reporting at www.sdnewswatch.org.

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