South Dakota Senate Approves Statewide Mobile Sports Betting Amendment

The South Dakota Senate recently approved a resolution that would allow the mobile sports betting question to go before the voters on the November 3rd ballot.

Economic Relief

South Dakotans approved in-person betting at tribal and Deadwood casinos in 2020 and officially launched the industry on September 9, 2021. The Mount Rushmore State is one of the few jurisdictions that have approved retail, but not mobile, sports betting.

However, Senate Joint Resolution 504, sponsored by Senator Casey Crabtree, could change all of that, and although previous attempts have failed to gain traction, a 23-10 approval in the state Senate last week could be a harbinger of legalization in the near future.

Constitutional Amendment And Property Tax Relief

The bill has now advanced to the state’s House of Representatives and will be the subject of further debate. However, if the House concurs with the Senate, voters will ultimately decide the measure in November. The bill is designed to earmark 90% of the tax revenue generated by mobile sportsbooks’ profits toward reducing property taxes for homeowners.

Crabtree defended his bill, which would amend the state constitution, saying, “The proposal in front of you is about property tax relief. It ultimately puts more money in the pockets of hard-working South Dakotans. This revenue is already being generated in our state, but it is leaving our borders and going to the benefit of surrounding states.”

Lawmakers Cite Wayfair As Precedent

Another proponent of the legislation, Republican Senator Steve Kolbeck, pointed out the similarities between this bill and the “Wayfair decision” by the US Supreme Court, which ruled South Dakota and other states can now require out-of-state retailers to collect sales tax on purchases made online.

“This is us having revenue out there that we’re not collecting; just like when Amazon was new, we had to go get that,” Kolbeck said. “We had to adjust as a state. Now we have this situation that this body needs to react to and adjust to so that revenue can come back into our state coffers.”

Opposition Mounts

Although the bill has made it past the first significant hurdle, it doesn’t mean the House will rubber-stamp it. Opposing legislators have expressed concerns that greater access to sports betting will lead to an increase in problem gambling throughout the state.

A 2022 amendment similar to this initiative stalled in the House because of safety concerns for South Dakotans. And that same opposition is being mounted against this latest mobile sports betting bill.

“South Dakota is rated number two of the five most gambling-addicted states,” Sen. Joy Hohn said. “Gambling addicts develop a high tendency to amass even more debt, suffer from other health issues, lose their jobs, strain their relationships, or even commit crimes.”

However, Senator Crabtree insists that sports betting is already occurring in South Dakota through offshore sports betting sites and those who travel to bordering states that have approved digital sports betting. Crabtree has stated that if this bill is approved by the House and then the voters, the legislators could construct guardrails to protect those vulnerable to problem gambling and provide resources to combat it.

“This revenue is already being generated in our state, but it is leaving our borders and going to the benefit of surrounding states,” Senator Crabtree said during his testimony. “The voters get to decide if they want this in November, and if the people say yes, then the legislature builds the guardrails and safety nets in the next session.”