South Dakota Sports Betting Appears a Reality After Final Rule Approval

South Dakota sports betting seems to be a reality this fall after the state’s Commission on Gaming approved detailed sports betting regulations last Wednesday.

The state’s lawmakers will now review the regulations and are expected to approve them by Aug. 2. The next stage will be to approve operators at the commission’s meeting scheduled Sept. 8, a day before the Mount Rushmore State plans to launch the industry. The initial plan to launch South Dakota sports betting was on Sept. 1.

South Dakota sports betting regulations will define the rules for on-premise wagers at casinos in the city of Deadwood.

Last November, the state voters approve in-person sports betting in Deadwood only.

What Happened Last Wednesday?

Last Wednesday, the South Dakota Commission on Gaming met in an all-day-long meeting to add to a set of rules approved by a legislative committee in June. The meeting made small “style and form changes,” according to Mike Rodman, executive director of the Deadwood Gaming Association.

The 115-page document approved Wednesday incorporates further detail, including internal control procedure requirements, wager types, and authorized events.

The first rules establish the base regulations, including the incorporation of sports betting to the list of authorized gaming, and forming record keeping and surveillance processes.

The Commission Made Some Final Changes

The South Dakota Commission on Gaming also made some final changes, including a $5000 application fee for sportsbook operators. The fee covers out-of-state background checks, besides record-keeping and surveillance methods.

The commission also deals with federal excise taxes, which are no longer allowed to be taken from the sports wagering revenue totals. The approved operators will pay a state tax rate of 9% on revenue.

Initially drafted in May, the rules also call for recording sports betting equipment inspection and exclude gambling equipment suppliers from betting on sports betting equipment or manufacturing slot machines.

License Applications Review Process Underway

The commission is currently vetting the operators seeking a sports betting license. License application opened July 1, with a $5,000 application fee.

Though the finalists will be decided on Sept. 8 meeting, sources claim just under 10 operators have applied so far. However, the commission has not revealed the names of those looking for a license for South Dakota retail sports betting when it goes live Sept. 9, the same day the 2021 NFL Season is scheduled to kick off.

Rodman told a local newspaper he expects as many as 10 properties to take wagers this fall in a “Vegas-style” setting.

Though there has been no official announcement, FanDuel, DraftKings, BetMGM, and Caesars, are the ‘usual suspects.’ Additionally, the Dakota Nations – the owner of three casinos in the state – will also be among the applicants. Casinos operate only in the tourist town of Deadwood and in Indian Country.

How Have We Reached Here?

South Dakota voters approved Deadwood sports betting in Nov. 2020. The state lawmakers swiftly rose to action at the beginning of the 2021 legislative session.

Gov. Kristi Noem signed sports betting into law in March, which went into effect July 1.

Under federal law, the state’s 11 tribal casinos can also extend sports betting in South Dakota, pending an amended state compact.

South Dakotans can place their bets at betting windows, kiosks, or via a mobile app while inside casino facilities. Online betting on casino premises will happen following an in-person registration at the casino.

The South Dakota sports betting law neither allows statewide mobile betting nor permits any college sports betting.

The gaming expansion could bring in a $22.1 million increase in overall gaming revenue, including $6.1 million from sports betting, according to an Oxford Economics study.