South Dakota Sports Betting Proposal Includes Mobile – With A Catch

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South Dakota sports betting

South Dakota residents approved sports betting in Deadwood by referendum last November.

What they also approved was language that created a mobile loophole.

Whether bets are technically placed on a device or on a server remains an unanswered legal question in federal law. SD bets legally have to be placed at a Deadwood casino, but that can be established by keeping the mobile betting servers at the casino.

SB 44 introduced by the Committee on Commerce and Energy suggests exactly that:

Any sports wagering may only be conducted in the interior of a licensed gaming establishment within the city of Deadwood. Each operator or route operator that is authorized by the commission to conduct sports wagering shall install and maintain equipment that is approved by the commission to ensure that all bets are placed from within the interior of a licensed gaming establishment within the city of Deadwood.

It’s also important to note that the distinction “within the city of Deadwood” does not apply to the state’s 11 tribal casinos. Under federal law, Indian casinos can offer any games authorized by that state’s legislature on tribal land.

Unfortunately, legal SD sports betting could struggle to capture dollars flowing to the illegal market or nearby Iowa should this bill pass as written.

Market-killing South Dakota sports betting bill detail

While it’s a big plus to include mobile betting in the bill, there’s one flaw preventing a truly open market.

The legislation requires in-person registration in Deadwood, which sits on the western border of the state. That’s a problem for those throughout the massive state that want to legally take part in online sports betting.

Take a sports bettor in Sioux Falls – a 5.5-hour car trip from Deadwood – for instance. That bettor would likely continue to bet in Iowa, which is only a 20-minute ride.

Iowa just became easier too

In-person registration recently expired in Iowa. That means anyone can bet with any sportsbook in the state with just a quick trip over the border.

Other important details:

In-person registration could change after passage

While there’s no expiration date for in-person registration like in the Iowa or Illinois sports betting markets, South Dakota could change its mind down the road.

Rhode Island did just that last summer. Originally, the RI sports betting legislation interpreted state law to mean customers must sign up in-person.

A later review indicated the servers being at the casino was enough to satisfy the law. Since the change in July, revenue and handle increased every month year-over-year through November.

Professional sporting event definition could cause confusion

One notable area of the bill is the definition for a professional sporting event:

“Professional sporting event,” a sporting event, other than a minor league sporting event, in which two or more persons participate and receive remuneration in excess of their out-of-pocket expenses for participating in the event;

This type of language has caused issues in the past. Some PGA Tour events were not available to bet in Illinois because of similar language.