South Dakota Online Sports Betting Remains a Long Shot

Ever since South Dakota sports betting was legalized a few years ago, the clock on when they would expand those gaming laws has been ticking. People wanted South Dakota online sports betting to eventually join retail wagering. They still do. But plenty of others, it seems, do not.

Just a couple of years ago, The Mount Rushmore State was probably ahead of the gambling curve. They legalized sports betting back in November 2020, when much less than half of the country had done the same. At the time, it was a progressive move from an historically conservative state.

Skip ahead to present day, though, sports betting in South Dakota now lags behind a good chunk of the USA. They continue to resist expanding into online sports betting. The matter was discussed, in-depth, during 2023 legislative meetings and ultimately flopped. Residents can still only place sports wagers on-site, at a very limited number of locations.

These restrictions no longer jibe North America’s overarching view of gambling. The best online sportsbooks in the United States are now accessible in more than half the country. South Dakota, in many ways, has devolved into the outlier. 

As of now, this doesn’t appear on the precipice of changing entering 2024. Certain officials continue to campaign for the legalization of South Dakota online sports betting. But the opposition to it is real and strong.

Why Did the Push for South Dakota Online Sports Betting Fail in 2023?

Answering this question is complicated. Many states have resisted the appeal of online sports betting because they don’t want to infringe upon the earning potential and livelihood of tribal casinos. That no doubt plays into South Dakota’s current stance. Yet, there also seems to be a widespread opposition not just to online wagering, but the already-legalized retail sports betting. 

The devil’s in the details. This year’s South Dakota online sports betting bail barely had enough support to earn official consideration. It was then brutalized during its vote. Not only that, but the discourse surrounding it wasn’t particularly flattering. Consider this excerpt from the Mitchell Republic’s Jason Heward: 

Following an intense House floor debate on Thursday, Feb. 16, over a resolution looking to bring mobile sports wagering to the voters via a 2024 ballot amendment, lawmakers voted 41-28 to stop the proposal — which scraped out of committee in a 7-6 vote one day earlier — in its tracks. Had it passed through the legislative process and garnered the support of the voters, House Joint Resolution 5006, brought to the floor by Rep. Greg Jamison, of Sioux Falls, would have allowed mobile sports wagering under two conditions: a mobile betting site would have to partner with a licensed casino, and its servers would have to be located in Deadwood, the home of the state’s small sports wagering industry. But lawmakers sporting concerns over the addictive nature of the practice had different plans. ‘I just cannot support an expansion of what we already have,’ said Rep. David Kull, of Brandon. “I think we already have a problem.”

Representative Kull’s comments stick out like a sore thumb. And to be sure, he’s not necessarily wrong. Studies have linked legalized sports betting to an uptick in gambling addiction. While it’s an unsolvable issue, it’s also not one that can be ignored.

Sports Betting Revenue in South Dakota is Slumping

However, at the same time, opponents of South Dakota online sports betting cannot ignore that their stance is imperfect. Simply refusing to legalize mobile wagering won’t actually prevent it. 

There is online sports betting in Iowa and online sports betting in Wyoming, two states within driving distance of South Dakota. Residents are absolutely taking advantage of that proximity. Especially if they live anywhere near state borders. Like Bill Van Camp, a lobbyist with the South Dakota Retailers Association, told an assembled committee during deliberations: “As much as the opponents will, I'm sure, attack gambling as something they don't want to see in South Dakota, the ship has sailed on this.”

Mr. Camp isn’t wrong. There’s no exact number on how much South Dakota online sports betting revenue the state currently misses out on, but the incoming revenue speaks for itself. In the previous fiscal year, South Dakota collected under $50,000 in taxes from tribal sports betting operators. That’s the “smallest haul in any state with legal gambling,” according to the Mitchell Republic.

To be fair, South Dakota is one of the five least populated states in the USA. To be even more fair, that’s not exactly the point. Compare South Dakota’s overall sports gambling revenue to what’s happening in Wyoming. The Cowboy State has the lowest population in the country. And yet, they average about $135,000 in sports betting tax revenue per month. That’s the equivalent of $1.6 million per year. Put another way: Despite having a lower population, Wyoming’s annual sports betting revenue is around 32 times that of South Dakota. 

Should we just believe Wyomans are bigger sports fans? Of course not. The difference is, they have online sports betting and South Dakota does not. That needs to start factoring into the thinking of state legislature members. The online sports betting industry won’t just disappear if South Dakota waits it out. Risks, imperfections and all, it’s here to stay. And at some point, South Dakota will have to join the growing throng of states with online sports betting. It just isn’t clear when that point will be—or whether it’s even relatively close.

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