South Dakota Governor Kristi Noem opposes an effort in the legislature that would put a measure before the voters in 2020 that could legalize sports betting in Deadwood and tribal casinos.
Last week she said, “I’m not in favor of expansion of gambling in the state of South Dakota. And I look through that lens at any legislation that puts something else on the table for discussion.”
The governor added, “Our early indications are pretty clear that opening up state sports gambling to the public could end up costing us more than the actual revenue it would bring in. And so that’s a real concern for me. The juice isn’t worth the squeeze.”
Unlike bills that can be vetoed, the governor’s opinion on this resolution is just that. On the other hand, on political matters the governor’s opinions can be important.
The governor’s opposition didn’t stop the Senate State Affairs Committee from passing the Senate Joint Resolution 2, last week by a 5-4 vote. Now it is headed to the Senate Floor.
The two Senate Leaders, Kris Langer and Troy Heinert, are on board. Langer said sports betting already occurs, it’s just not legal.
Langer added, “To me, if we have more regulations around that and can oversee that, I think that’s a good thing.” She doesn’t see it as an expansion of gaming, which voters approved in 1988. She looks on it as “another option.”
Heinert said that ultimately the voters will decide. “And that’s how Deadwood gambling got started,” he said. Currently the town in the state where casinos are allowed (outside of the reservation) is Deadwood.
Because federal law stipulates that Indian casinos can offer any kind of gaming that is legal in the state, the resolution includes the tribes. Currently eight of the nine tribes have small casinos.
Representatives of the Crow Creek and Yankton Sioux tribes announced their support. “Sports wagering could have an incredible effect on tribal gaming, increasing the economic position of the tribes, reducing illegal bet-making and creating more jobs,” said Lester Thompson, Crow Creek Sioux tribal chairman.
Some, like the South Dakota Licensed Beverage Dealer and Gaming Association, don’t think the resolution goes far enough. They want more sports betting at more locations.
Another bill would also allow the town of Yankton to join Deadwood, but only to have a single license for a casino that would offer slots, tables and keno. A similar bill was introduced a year ago, but died in the Senate.
Some opponents, like Senator Jim Bolin, believes that Deadwood won’t lure enough people to make up for all the additional regulatory costs. He thinks the effects will be “negligible” unless the betting is extended to the entire state.
He told CDC Game Reports “So that’s going to have to be a value judgment people are going to make. If you want revenue, you’re going to have to make it statewide, but that also will increase the controversy of the discussion.”
House majority leader Lee Qualm opposes any kind of sports betting. “I guess I look at it as it is an extension, or expanding, gambling, and I’m not in favor of it, so I would just as soon see it go away for Deadwood or anyplace. That’s where I’m at with it.”
In testimony to the Senate State Affairs Committee officials from Deadwood argued that while sports betting wouldn’t bring in that much extra money by itself, would add to the list of amenities the city can offer, and lure more tourists.
Deadwood Gaming Association Executive Director Mike Rodman told lawmakers, “We compete both with surrounding states and nationally, and need to provide our customers with those gaming products they ask for that other states are providing.”
The state Department of Revenue Deputy Secretary David Weist told lawmakers that the cost of regulation would outweigh any additional tax revenues. He called current estimates of sports betting revenue $184,700 too high because they use Nevada casinos as a model, which, unlike South Dakota, has a year-round business model and is a “mature” market. He said the best estimates are that $80,000 would be collected, not enough to pay for one new employee to regulate it.
