PIERRE, S.D. (Makenzie Huber / South Dakota Searchlight) – The South Dakota Senate voted 23-10 on Wednesday to approve a resolution that would ask voters to legalize mobile sports betting and capture tax revenue from it to reduce property taxes.
If the state House of Representatives also approves the resolution, it will go on the ballot Nov. 3.
Senate Joint Resolution 504, introduced by Sen. Casey Crabtree, R-Madison, would put 90% of tax revenue from mobile sports betting toward replacing property taxes. If voters approve the state constitutional amendment, the Legislature would set additional policies to put the program in place.
Voters amended the state constitution in 2020 to legalize sports betting only in Deadwood and tribal casinos in South Dakota. It is legal statewide in Wyoming and Iowa, among other states, and sports-betting smartphone apps and websites have proliferated nationwide.
Republican Sen. Steve Kolbeck lives in Brandon, a short distance from Iowa with the Grand Falls Casino just across the border. He told lawmakers that if voters do approve a constitutional amendment, it would bring economic benefits to South Dakota towns with bettors choosing to eat, watch games and stay in their own communities rather than driving across the border to Iowa or Wyoming to legally place sports bets.
Kolbeck added that he sees the constitutional amendment “as another Wayfair decision,” referencing the U.S. Supreme Court decision involving South Dakota that allowed states to require out-of-state retailers to collect sales tax.
“This is us having revenue out there that we’re not collecting, just like when Amazon was new, we had to go get that,” Kolbeck said. “We had to adjust as a state. Now we have this situation that this body needs to react to and adjust to so that revenue can come back into our state coffers.”
Opponents criticized the effort for attempting to fund property tax relief with a potentially addictive activity.
A supporter of the measure, Sen. Amber Hulse, R-Hot Springs, sees the constitutional amendment as a way to set up safety measures and guardrails, such as easier access to an addiction hotline and betting caps. Funding property tax relief through the new revenue source would be an added benefit, she said, though it “isn’t going to probably do a lot.”
“You can’t legislate morality, but guess what? These people are already doing it,” Hulse said, sharing that a family member of hers in South Dakota participates in mobile sports betting.
“They’re already doing it on the black market. They’re already potentially making bets that are hurting their families more,” she added. “So why don’t we put some guardrails on it and help protect some families so that there aren’t as many harms being done by this, especially to our communities?”
The resolution does not need the governor’s signature to appear on the ballot — it just needs majority approval from both chambers.
South Dakota voters will consider at least four constitutional amendments in November, all of which were placed on the ballot by the Legislature last winter. Three other amendments have been approved for circulation, according to the South Dakota Secretary of State’s Office, and could end up on the ballot if petitioners obtain enough signatures from registered voters.
