The United States Supreme Court just offered South Dakota a budgetary shot in the arm. No, they haven’t given Marty Jackley a win on our online sales tax. Instead, today a 6–3 majority struck down the 1992 Professional and Amateur Sports Protection Act, the federal ban on sports betting in most states.
Governor Dennis Daugaard says he welcomes the decision, but don’t place your bets yet:
Our state constitution, however, does not permit sports betting in South Dakota. A state constitutional amendment could be placed on the 2020 general election ballot through the petition process, or by the State Legislature in 2019 or 2020, and would need to be approved by the voters [Gov. Dennis Daugaard, press release, 2018.05.14].
What?! $18 million in easy sales tax revenue from sports betting, and the Governor wants to wait until 2021 to start cashing in? Ditto from the Deadwood Gaming Association, which says it is proposing an amendment for the 2020 ballot?
Why let three Super Bowls, three March Madnesses, three Stanley Cups, three NBA Finals, and two World Series pass us by? We called a special session last June for nonmeandered waters, a topic with far less proven revenue impact. Governor Daugaard could call the Legislature to Pierre next week, have them approve a sports-betting amendment in a one-day special session, and place it on the November ballot as Amendment A. Since it’s an amendment, the Legislature could even craft language superseding the onerous and unnecessary delayed-enactment date they wrote into statute last year:
Section 1: That Article 3, Section 25 of the state constitution be amended by adding the following clause: “Further, it shall be lawful for the Legislature to authorize, regulate, and tax betting on professional and amateur sporting events.”
Section 2: Notwithstanding any other provision of law, this amendment shall take effect immediately after the Secretary of State certifies that a majority of eligible electors casting votes on this measure cast affirmative votes for this amendment.
Of course, gambling is an exercise in sloth and mathematical ignorance, so we should make sure the proceeds go toward education:
Section 3: All tax revenues derived from sports gambling shall be distributed to all South Dakota school districts for the exclusive purpose of increasing teacher pay.
Hmm… $18 million in new sales tax, 9,604 teachers… $1,874 more per teacher… wowza! That would raise our average pay (from 2017) up to $48,853, still $279 shy of the $49,131.96 target teacher salary set by this year’s Legislature (see HB 1056), but enough to vault us from 48th to 41st in teacher pay nationwide! We’d still be more than a couple grand behind every neighboring state, but let’s not the perfect be the enemy of the good, which we can get with gambling! Sports gambling!
The fan in the money booth is whirring. Jump in, Governor, and let’s grab some cash! Special Session next week, Amendment A on November 6, sports betting legal in time for the Thanksgiving football games, and the first bonus checks to teachers go out this Christmas.
According to a report on NPR, the amount of tax dollars that this change will generate for a state like South Dakota will be minuscule. In states that have many years of experience, like Nevada, it is not a large part of the gambling industry.
NPR is a bunch of pessimists! Our Republican Governor and Legislature should be jumping all over this ruling as an opportunity to promote economic development (business for their friends in Deadwood), tax revenue (more insulation against income tax), and the jockocracy!
Some revenue from sport’s betting is better then none.
I wouldn’t trust the republican legislature’s promise of using the new gaming revenue for education or teachers.
So the sales tax gets to be put on the bettings? The cities will love this too. But the tribal casinos don’t have local sales taxes do they? Perhaps grudznick is wrong on that. They should slap a 10-center on every dollar quick if the tribes could crank this into being faster than the state could. People would flock there to gamble on the ponies and baseballers and by football season it will be the place to be.
When will the people who want to protect the stupid people from themselves start complaining about this? That is a really important question. Expanding the stupid tax hurts no one, except the stupid, but the whiners will be out in force, I am sure.
South Dakota tribes, at least most of them, have compacts with the state to collect sales tax.
Perhaps, school districts could operate betting rings to put the blood money directly into teachers’ pockets? The last thing South Dakota needs are revenue sources that degrade the same families teachers work with.
I got a big spanking at age nine when my Grandma found out I’d been gambling at the Catholic bazaar. She didn’t have a lot good to say about them damn C******ics letting Protestant kids lose their money on the “big wheel”. lol
Mr. C, I was not very clear about the tribes and the sales tax. I fear my state is more addled than ever before.
I was not worrying about the tribes collecting the 4.5%, only slightly less about them remitting it. I was suggesting or asking if the tribes can tack on their own, 2%, 3%, 10% of sales tax just for them, the way the cities do. A tribal tax. And if so, would that apply to the sports betting. I’d guess it would. I’m not even sure why the tribal casinos can’t just bet on sports stuff right now. They aren’t governed by the same laws, I expect. They could be posting bets on which monkey from the web camera at the zoo poops next, and perhaps they are. There are enough degenerates out there who would bet on such things.
Mr. Lansing, your Mama was right to spank you, and the swelling on your arse still shows.
Thank-you, Grudz. May I have another? 👊
PS, Grudzie … the person over on the other blog who just berated you and said, “You use(sic) to be funny.” is really Jason.
Tribal betting by federal law is restricted to what the state can do, (i.e. if the state can have casinos, so can tribes).
Tribes enter into gaming compacts with the state and operate under the same rules that govern all gaming operations.
South Dakota sales taxes on the reservation are collected by the vendors and paid directly to the state, the state in turn pays the tribes their share on a regular basis, this system has been in place for years and usually works well. Again, the tribes and state have a compact for taxes collection.
Mr. C, does the Flandreau Sioux Tribe have such a compact?
I am glad they collect taxes for the state within who’s boundaries they exist, but you are still missing my point. If cities can leverage another 2% sales tax on top of the state’s 4.5% (that last half is just for good teachers), why cannot the tribes add a 2% sales tax for themselves? Perhaps they do, and I’m just not being clear enough in my query.
Do the tribes add a spiff tax like how cities add a spiff tax? They should.
Finally, tribes are separate nations, and I do not know why they should follow the US laws at all. They should be doing whatever they want.
All tribes, including the Flandreau Sioux Tribe, are mandated by federal law to have a gaming compact with the state.
I’m not aware of any tribes that tax their members other than some standard business taxes.
Tribes are indeed sovereign nations, but they are limited on what they can do by treaty and federal laws.
Tribal members are encumbered by having to obey many state laws, tribal laws, and federal laws.
Well, heck, Spencer, if you’re going to get all moral on us, we’ll have to get rid of all of our sin taxes—video lottery, alcohol taxes, tobacco taxes (you’re voting no on Mickelson’s IM 25, right?), as well as our whole regressive sales tax, which degrades families by taxing their groceries.
Actually, I’m not opposed to Spencer’s position. If he and his neighbors could stop one-noting about abortion for an election cycle and focus on repealing video lottery, they could make a far more significant contribution to the general welfare. I’m just trying to thing like the mainstream Republican leadership. They’ve been eying the prospect of regulating and taxing sports betting. They have an opportunity to boost business and revenue in a way that (a) doesn’t involve expanding South Dakota’s income tax and (b) builds on the already accepted moral transgression of gambling. From a Republican mainstream perspective, there’s no reason not to call a special session immediately and put this issue on the November ballot. Heck, they could even justify putting it on a special election ballot (July 31?): every day South Dakota waits is a day that other states get their sports betting operations in place and make it harder for us to enter the marketplace and compete. It’s a gold rush, and we’ve got to stake our claims ASAP!
Do it right. South Dakota can’t compete with Vegas, who will immediately have nationwide internet gambling, charging state sales taxes and remitting the tax back to each state.
1. Ban internet gambling outside the state. Easily done by monitoring the sales tax software of national gambling sites.
2. Authorize county and town governments (no private licenses) to open OT&FB Parlors. (Off Track & Field Betting).
3. Allow each county and town to add a small tax to be used for civic improvement or grouped together with other counties and towns for statewide projects. (e.g. Save The Sioux River)
It’s vital to ban internet gambling first thing this session. Vital!! It’s the only way to keep hometown money in the state and keep it fun.
~ With internet gambling you’ll get people around the world with gambling algorithm software placing 40,000 bets on a single horse race in order to get a minute advantage and winning every trifecta and big pot. This takes the fun out of wagering for the common folk and they’ll quit participating. This is what happened to Draft Kings and Fan Duel, which were extremely popular the first couple years but now are just software geeks playing against each other with little chance for the common guy to win the big one.
Porter, can we ban our residents from engaging in online business/entertainment activity?
Sure. Ever see a contest that says Not Available in West Virginia or the like? States rights are in effect until they get challenged.
It shouldn’t be taxed.
Why not? Government takes a cut of video lottery and other forms of gambling. Why not tax sports betting, as a reasonable way to ensure that the industry pays for the social externalities that arise from its commercial activity?
Video lottery should not be taxed either.
What should happen if you must “tax” it, is tax a portion to go to legislature approved charities.
“Cash in Teachers’ Pockets by Christmas” gambling produces nothing but loss just as the lottery does. In 2017 South Dakota had over $751 MILLION lost in gambling to lottery, instant tickets and video lottery. We received $117 Millon in spendable revenue. If you taxed every state resident just $134.53 you would save South Dakotans $863.54 EACH!!! https://lottery.sd.gov/docs/SDLottery_AnnualReport_2017.pdf
Not a one of you are wealthy because of the lottery. What makes you think gambling online will somehow help? Go to your local casino that has taken residence in a closed convenience store> You will see the people on welfare shoving what little money they have into a machine that is selling nothing more than a dream. Who benefits from that?
What I can see is … Dan Lederman’s not getting any sleep figuring out how to get his crooked fingers and his Dakota Dunes into this opportunity . If anyone can slice a personal piece of the “people’s pie”, Dastardly Dan Can.
Please find an equitable and fair manner to tax the citizens to pay for the teachers that doesn’t depend upon drugs or gambling.
I don’t see why teachers should be punished in their paychecks when a state does the right thing and happens to be successful in reducing drugs and gambling.
I may be exaggerating, but aren’t a lot of you folks who support sports gambling the same people that were crying for laws to help prevent idiots from “falling victim” to the short term loan cycle of debt? Your morals are contradictory.
Ryan,
Those were private profits. For them, nothing comes above getting more money for “Government” no matter the cost.
Did you see this Ryan?
An audible gasp went out in the breakout room I was in at last month’s pension event cosponsored by The Civic Federation and the Federal Reserve Bank of Chicago. That was when a speaker from the Chicago Fed proposed levying, across the state and in addition to current property taxes, a special property assessment they estimate would be about 1% of actual property value each year for 30 years.
Evidently, that wasn’t reality-shock enough. This week the Chicago Fed published that proposal formally. It’s linked here.
https://www.zerohedge.com/news/2018-05-12/audible-gasp-was-heard-when-chicago-fed-unveiled-its-solution-pension-problem
http://midwest.chicagofedblogs.org/?p=3096
Zero Hedge Fund is a joke, almost as bad as Breitbart for a source.
It takes a real wacko for a commenter to use Zero Hedge Fund or Breitbart as a source on a liberal blog where they will be fact checked.
Roger.
I linked to the Chicago Fed website.
This is why I say you need to get help for your intelligence disability.
Jason, yes I also think money makes some people’s morals flexible. I didn’t get into that in my post because mike from iowa doesn’t like my posts getting too long.
I don’t carry about the Chicago Fed link, the fact remains that Zero Hedge Fund has zero credibility, is that clear enough for you?
Of course you don’t Roger. That’s a symptom of your intelligence disability.
There is help for you out there if you want it.
We got our limit tonight, Roger. You ‘da man. 👍
Sure enough did, Porter.
I used a new bait that was guaranteed work and just had to wait awhile to reel the fish in.
By the way, Porter, do you know what “intelligence disability” means, kind of sounds like a made up phrase by someone trying to act intelligent.
I thought about hiring him, so I got his High School transcripts. Wanna see ’em? lol
Porter,
Hold on to the transcripts for a bit and we’ll use them when we have a “grand coming out” party for him.
I’m just kidding, Jason. They wanted eight bucks and it’s not worth it.
Jason, you’ve got no “should” there, just what you want.
Gambling has externalities. Taxing gambling helps ensure that the gambling industry pays for its externalities.
If we tax gambling, there is no reason for the state to give those tax dollars to private charities before funding necessary public institutions. Throwing tax dollars at private charities invites either a lack of accountability or a government intrusion into those private charities’ affairs that you and I both would likely find unacceptable.
OS, the problem gamblers aren’t all welfare recipients. I’ve seen businesspeople with access to cash become addicts. They start dipping into the till to cover their losses, fudge the books, and end up in deep financial trouble.
I will accept that gambling addiction will hurt the poor more than the rich, or hurt them more quickly, since rich people can absorb their losses better.
But OS, if you’re serious about video lottery and gambling in general being a net loss for society, then sure, let’s go the other direction and pull the plug on all of it rather than buying in to sports betting, and let’s recoup the revenue loss with a fair, progressive income tax that shields the poor from the disproportionate harms that concern you.
Ryan, I’m trying to put this problem in the context of the moral framework our Republican Legislature uses.
I’m not ready to agree fully with the analogy to payday lending. Chuck Brennan, Rod Aycox, and the other usurers whom IM 21 effectively kicked out of our state craft their products not only to make money but also to trap borrowers into buying more of their products. In gambling, the house always wins, and casinos and the state use marketing tools and gaming practices to encourage people to keep playing, but offering fun games isn’t quite the same level of predatory behavior as plunging people into inescapable debt.
Here’s a primary difference: the moment a gambler is out of money, the casino ends the game. The payday lenders specifically cater to people who don’t have money and binds them to their loans.
Cory wrote:
Jason, you’ve got no “should” there, just what you want.
The same can be said for you.
Charitable gambling works fine in North Dakota. Please tell us why it wouldn’t here?
Wah, wah crying Ryan, mike from iowa is not the moderator here and it takes you so long to get to the point, your audience has died of old age and boredumb.
Cory likes them, so there is that.
Mr. Lansing, your Mama was right to spank you, and the swelling on your arse still shows.
Why are you paying attention to Porter’s arse, Grudz? This your way of coming out of the closet? Slip of the tongue or major announcement?
Why stop at taxing sports betting; why not have the state of South Dakota be “the house?” Like video lottery, have SD be the one to reap the benefits and let some of that flow to the venders who handle the money.
The sports betting debate will now shine a light on our moral hypocrisy – much like the marijuana legalization debate does.
We are ever in the quest of finding the “other guy” to pay our taxes for us.
Jason, my “should” comes from the SDGOP “should” for video lottery: regulate it, tax it, support public institutions. My “should” also derives from the SDGOP capitalist “should”—why continue to stand in the way of an industry that the US Supreme Court has declared permissible in all states? Promoting business to increase tax revenues and avoid increasing tax rates or imposing new taxes is at the core of the SDGOP argument for its policies. If you have a beef with my “should” on this topic, you really have a beef with the SDGOP and its business-über-alles core philosophy.
Note that I didn’t say charitable gambling wouldn’t work. I said that the state’s first priority is and should be the support of public institutions, that we can maintain better accountability of public spending on public institutions than of transfers to private organizations, and that subsidies for private non-profits leads to undesirable increased government intrusion on private operations.
O gets closer to my deeper point: a debate this year, right now, on sports betting would offer us the opportunity to discuss South Dakota’s political and moral hypocrisy and get clear on just how we want to fund our public institutions. A vigorous debate on sports betting would inform the 2019 Legislature on how to proceed. Approval of an amendment would prompt the Legislature to formalize the regulatory and tax structure for sports betting. Rejection of such an amendment could re-energize anti-gambling forces and produce a 2019 Legislature that would pull us back from our dependence on video lottery, scratch tickets, and other taxes on stupidity. Either way, we get more informed public policy, and we get it sooner.
mfi – some people play checkers, others play chess. Some people sit at slot machines, and others play blackjack. You seem like the checkers and slot machine type, am I wrong?
Cory, both short-term lending and gambling prey on people who make poor decisions to separate those people from their money. The people who impacted the most by each industry are the same people. The only difference I see is that short-term loans were making one guy a bunch of money and you didn’t like that one guy.
You say casinos stop when a person is out of money, but lenders don’t. That doesn’t make sense. Both casinos and lenders are in it for the long-term. Lenders would never make money if the borrower couldn’t come up with NEW money to pay for that loan. Just like casinos. They send you home when your pockets are empty, but they know you are going to find a way to scrape together some cash to give it ONE.LAST.CHANCE. Both industries take the lost dollars in the pockets of suckers.
If people cared as much about the “poor victims” as much as they pretend to, it wouldn’t be an issue of who collects the profits – it would be about protecting people from their own bad decisions, regardless who controls the game. However, that’s not what anybody on this thread is focusing on, and that isn’t the real reason most people supported the interest rate cap. It’s smoke and mirrors.
Stupid typos. I meant “last dollars” not lost dollars.
Also, for the record, I support legal gambling and short-term lending. Not because I necessarily think they are good ways for people to spend their time and money, but because I don’t like being told what to do and I don’t think we should run our country based on the helplessness and need-for-oversight that is present in the type of people whose lives are ruined by trivial stuff like payday loans and the Stanley Cup Final.
last/lost—no problem, Ryan. The slip is worth some casual wordplay.
For the record, I oppose short-term lending more than legal gambling, since short-term lending’s business model depends on a greater degree of predatory behavior. Such predation is not trivial; it is the sort of abuse that we organize governments to prevent
And remember: it’s not so much that we’re telling you what to do or not do (you can still get a short-term loan from your mom, your brother, your fishing buddies…); we’re telling lenders that they can’t engage in predatory practices.
Gambling has a better payback rate than the payday lenders charge; at least slots do.
~ Here are statistics from the South Dakota Commission on Gaming for the payback percentages on all of Deadwood’s slot machines for the one-year period from July 1, 2016 through June 30, 2017:
Denomination Payback %
1¢ Slots 90.73
5¢ Slots 93.79
25¢ Slots 90.74
$1 Slots 92.35
$5 Slots 92.21
Average 91.04
You are all mixing apples with oranges. Lenders, gambling and taxes. Pick a topic
Oh, OldSarg, you’re mistaking yourself for someone who has any credit available to tell us what topics to talk about. Please sit down and catch your breath.
Comparing gambling to payday lending is interesting. Both are money games. Neither industry creates new wealth. Both industries impose negative externalities on their communities. Both have clear connections to unsavory business practices. Having rid ourselves of payday lending, do we want to invite in more of the gambling industry?
Taking the last dollar in a gambler’s pocket is one thing. Taking the last dollar that will be in the payday borrower’s pocket next month and for every foreseeable month is another.
I could google the statistics, but then I would have to discern the credibility of the sources, and I don’t have the ambition for that…but I would guess that gambling addiction has created 1,000 times the poverty that “predatory” short-term-lending has.
I suspect both industries are connected at the hip. Some people gamble to pay off payday rip-offs and some people borrow short term financial traps to pay off gambling losses.
Get them coming and going.
Ryan … You don’t have ambition but you’d rather guess? What does that tell us?
Well, Ryan, if that’s our standard for banning an activity, how many people have drunk themselves into the poorhouse?
Porter, I don’t have the ambition to chase down reliable sources to answer a narrow and hyper-specific issue that I am only mildly interested in. I would rather guess, yes. What does that tell you? I have no idea. Maybe that I am employed…?
Cory, careful now. I don’t want to ban any of these activities. You and several commenters on here were supporters of the rate cap before it passed and then defended it after it passed. I think there should not be an interest rate cap, and I think gambling should be legal among adults. I also think drinking yourself into the poorhouse should be legal, which it is. I support idiots moving themselves out of everyone else’s way however they choose to do it. The “cycle of poverty” allegedly created by loans with interest rates above 36% is the devil you all wanted to battle. I’m saying you are likely making an argument for creating even more poverty to replace the poverty you all just “saved” people from.
mfi – agreed.
It tells me enough. It was just a question to get you to expand. Now I know who you are. Thanks. Lovely day, mate.
Alright, despite my better judgment, I’ll bite. Who am I, Porter?
Ryan, I suppose you drag us to the question then: at what point does the societal detriment outweigh the individual right? How far is an individual allowed to drag down society before society SHOULD step in to curtail those individual rights? The free market in general, the vice market in particular and guns — all need the answer to this question.
Great question, O. I won’t pretend to have a great answer. I think the idea of autonomy and self-regulation is appealing and right on many levels. I understand that could lead to societal costs. I don’t know when we should “stop” somebody from harming themselves physically, emotionally, financially, or any other way. I think we should “stop” people from hurting others in those ways through laws and whatnot, but I don’t know where the right balance point is for personal rights versus societal harm. I would guess the middle ground is something arbitrary, like saying that age 18 is a good age to be able to sign a contract, kill a foreign soldier, or smoke cigarettes. It’s based on nothing but feel-goodery.
https://www.google.com/search?q=+is+gambling+more+addictive+than+short+term+payday+loan+borrowing&ie=utf-8&oe=utf-8&client=firefox-b-1-ab
Several articles that explore the topic.
States allow people to gamble. Some get way in debt and end up in debtor prisons.
I wonder if Pay Day Loans are behind or otherwise involved in for profit prisons.
well said doc.
spencer-sounds like u are growing up out of your republicanism. amazing what a little educational experience might do. well done
Christ sarge your posts are so predictable-“see the people on welfare shoving what little money they have into a machine”
meanwhile, in real matters, mcconnell gambles with all of our lives. what ever it takes to beat the dems.
“Senate Democrats (and the independents who caucus as Democrats) will be defending 26 of the 35 seats up for election this cycle, and the August recess is a critical time for campaigning. McConnell, is “seriously considering” canceling at least some of the recess.”
too bad republican leaders (you’ll see thune stalking the photo-op in the background. kind of a wanna-be like trump’s ‘replica of the Nobel medallion is mounted on what the White House described as a “tasteful black-velvet background” with an engraved plaque reading, “Donald J. Trump, 2018 Winner.” ‘ https://www.newyorker.com/humor/borowitz-report/trump-orders-replica-nobel-peace-prize-to-display-on-his-desk), aren’t educable. silence of the lambs. McConnell has been soooo quiet as the storm erupts around the republican administration. https://slate.com/news-and-politics/2018/05/mitch-mcconnell-could-keep-senate-democrats-off-the-campaign-trail.html
https://www.bloomberg.com/news/articles/2018-05-16/the-kochs-got-state-taxes-cut-now-teachers-are-striking
Leslie … For years I’ve wondered about the punctuation in your posts. You use a dictation machine, huh? Always great to read your stuff. You rock. :)
Leslie,
Your link said this:
So far, all the walkouts have ended with concessions to teachers. In Arizona, they’ll be getting a 20 percent pay raise over two years, although the state didn’t raise taxes to pay for it, to applause from Americans for Prosperity. Lawmakers are “making the decisions we want them to make,” says AFP’s Chougule.
Chougule says states that reversed earlier tax cuts to fund education aren’t good examples of fiscal policy. The model, he says, is a state that has cut taxes every year since 2013, created 300,000 jobs, and now has a revenue surplus, because it followed the AFP austerity gospel of keeping “the growth of spending under the growth of population plus inflation.”
That state is North Carolina.
Jason, that link also said that the starve the beast worked in only one state; It is an outlier. – never mind the absolute failure of Kansas. You also need to broaden your view of what a “successful” state budget is. All job creation is not equal, and a state is primarily responsible for making the jobs and opportunities needed for the success of its citizens (especially the most vulnerable – they young and the old).
Failing schools and infrastructure push businesses away – not to states.
O,
A Judge made Kansas spend money on education.
There was no beast starved in any State.