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Deadwood casinos deadlocked on statewide sports betting

Tellers prepare for the first day of sports betting in Deadwood
Arielle Zionts
Tellers prepare for the first day of sports betting in Deadwood last fall.

One stakeholder group has been notably absent during testimony on a legislative resolution that would allow South Dakotans to decide whether they want to expand sports betting across the state.

The Deadwood Gaming Association — which represents the casino industry in the only town that offers sports betting — has not testified at the Capitol because the association is deadlocked.

"We did not reach a consensus here in Deadwood on that bill," said Executive Director Mike Rodman. "When Deadwood Gaming doesn't have consensus, we don't take a position."

Rodman said the industry is nearly split in half on the issue.

"Some of the operators in Deadwood believe that the biggest benefit of sports wagering is bringing people to Deadwood that engage in sports wagering and then engage in other activities in Deadwood, whether they play cards or buy a hotel room or eat in our restaurants," he said.

"There are those who believe that in order for Deadwood to compete with surrounding jurisdictions — like Iowa, Wyoming, Colorado and soon-to-be Nebraska — that will have statewide mobile wagering, that we should have that too as long as that of course runs through Deadwood through a licensed gaming establishment," Rodman said. They believe "the additional revenues from statewide would offset whatever revenues that they would be losing from less visits to Deadwood."

The resolution would put a constitutional amendment question on the November ballot that asks voters whether they want to expand sports betting statewide. The betting would be through websites or mobile apps, and would be routed through computer servers in Deadwood casinos.

Sports betting began in Deadwood last fall after 58% of South Dakota voters approved the gambling option, but only within the city.

The resolution to expand sports betting narrowly passed a Senate committee and the entire Senate, on 5-4 and 18-17 votes, respectively.

The resolution has support from the national sports betting industry and South Dakota Retailer's Association.

Some supporters say businesses should have the freedom to offer sports betting while individuals should have the choice to gamble — which comes with the personal responsibility to avoid negative consequences.

"The people in our state have said time and time again, please stop restricting our freedom, we want to engage in this activity," said Sen. David Wheeler, R-Huron.

He noted that South Dakota voters have expanded gambling options multiple times. They legalized Deadwood-based gambling for the first time in 1998 and added the sports betting option in 2020.

The Department of Revenue, the Department of Social Services — which helps with gambling addiction — and some socially conservative groups are against expansion. They say addiction can lead to mental health issues, financial struggles and family problems.

Sen. Jack Kolbeck, R-Sioux Falls, argued that supporters are overselling the statewide economic benefits of mobile betting and there's a better way to expand the profits.

"Establishments that have a video lottery license should be able to participate in that by having a kiosk in that location where those people can walk into that location, spend their time, spend their money, watch the games on the TV and place their bets through the kiosk through Deadwood, South Dakota," he said.

The resolution will now be debated in a House committee.

Arielle Zionts, rural health care correspondent, is based in South Dakota. She primarily covers South Dakota and its neighboring states and tribal nations. Arielle previously worked at South Dakota Public Broadcasting, where she reported on business and economic development.
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