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SB 44: License and Regulate Sports Betting in Deadwood

Remember that bender we went on over the election, when we voted to re-elect a lying snowflake traitor as President and legalize marijuana and sports betting in South Dakota?

Well, that first part of South Dakota’s sin-binge was rejected by America’s sane and non-seditious majority, and the second part still has to get over Kristi Noem’s hump.

But sports betting in Deadwood, as allowed by our humble Amendment B, has its implementation legislation in the hopper. Senate Bill 44 lays out the particulars for the four magic words—”wagering on sporting events”—that we inserted in Article 3, Section 25 of our Constitution.

SB 44 requires that Deadwood casinos wishing to offer sports betting must pay a $2,000 annual fee for a “sports wagering services provider license.” That $2,000 fee is higher than any other gambling-related license fee.

SB 44 requires any sports wagering take place inside a licensed gaming establishment in Deadwood. You can’t sit in an outdoor café, let alone sit in your car on I-90 or in your living room in Bismarck, and place sports bets.

SB 44 allows betting only on professional, major league sports. Betting on high school, college, or minor-league sports is out.

SB 44 Section 22 includes a Pete Rose rule: casinos may not take bets from players, team members, coaches, team managers, or game officials. Players and casino licensees who violate that rule face a Class 6 felony charge.

SB 44 amends our very recently adopted definition of “cheating” to include messing with the “result of a sporting event or an event within a sporting event” or the “performance or nonperformance of an athlete or competitor during a sporting event.” Interestingly, SB 44 appears not to tie that sports cheating to the statute (SDCL 42-7B-42) that makes some cheating a Class 5 felony. That penalty statute outlaws using or having on one’s person “any cheating device” while playing a licensed game of chance, but it does not otherwise clearly refer to “cheating” itself as a punishable offense. The “cheating” definition seems to exist solely to support the definition of “cheating device”, not to provide the grounds for prosecution of bettors who, say, throw a banana peel onto the first base line or take the goalie out drinking so he’s hung over the next day for the playoff game.

That penalty statute also outlaws using “any fraudulent scheme or technique,” and SB 44 tacks “placing a bet” into the definitions of “fraudulent scheme”and “fraudulent technique”:

(5B)(13) “Fraudulent scheme,” a dishonest or deceptive plan or arrangement used or intended to be used to play a game or slot machine or place a bet, that gives any person an advantage when playing a game or slot machine, or placing a bet;

(5C)(14) “Fraudulent technique,” a dishonest or deceptive procedure or method of playing a game or slot machine, or placing a bet that gives any person an advantage when playing a game or slot machine, or placing a bet [2021 SB 44, original draft, 2021.01.__]

Hmmm… is it really dishonest or deceptive to throw that banana peel in front of a runner or get the goalie drunk? Such actions are clearly dirty, but their intent doesn’t deceive anyone. Such actions don’t cleanly fit the existing language on gambling, which was designed for in-house card games, slots and other games of chance. Instead of simply tacking sports language onto casino provisions, the Department of Revenue, which requested SB 44, may need to propose amendments to its definitions and to the penalty statute to make sure we can charge and convict sports bettors who try to improperly influence the outcomes of games.

Senate Bill 44 provides for the taxation of sports betting, but not explicitly. Once authorized, sports betting will be subject to the same 8% gaming tax and additional 1% tax as all other Deadwood games. The taxes on sports bets will go into the same pot as current casino taxes and be divvied up the same way: the first $6.8 million each year goes to historic restoration preservation in Deadwood, and subsequent amounts each year go 70% to the state general fund, 10% to the other towns in Lawrence County, 10% to Lawrence County school districts, and 10% to Deadwood for more historic restoration and preservation.

These new licenses and rules for Amendment B’s sports betting will cost something to enforce, but neither SB 44 nor any other currently filed bill addresses the cost of launching and regulating this newly legalized recreational activity. yet the Department of Revenue has chosen to put the cash before the horse on recreational marijuana, handing the Legislature Senate Bill 35 to appropriate the much bally-boo-hooed money to implement Amendment A’s marijuana legalization before posting any legislation addressing the actual implementation details. Hmm… maybe Amendment A would have received swifter service from the Executive Branch if it had specified that only the Pierre-friendly Deadwood casino operators could sell recreational marijuana.

7 Comments

  1. Nick Nemec 2021-01-19

    Are the allowable professional, major league sports listed in the bill? Can I bet on PRCA rodeo events?

  2. CraigSk 2021-01-19

    I thought that sport betting will become reality way before recreational marijuana in this state would. Typical action for this state. I always had said there should be a smoking, drinking, and gambling tax appreciation day for those few that pay for everything in this state. I “bet” that one can place a sports bet over a year before they can buy recreational marijuana. Wired since “A” comes before “B”.

  3. Cory Allen Heidelberger Post author | 2021-01-19

    Very good question, Nick, and one with obvious tourism marketing tie-ins to Deadwood and the Black Hills. SB 44 defines “professional sporting event” as “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.” It defines “minor league sporting event” as “a sporting event conducted by a sports league that has not been classified by the commission as a premier league in the sport.” SB 44 prohibits betting on minor league, collegiate, and high school sports.

    I don’t know what constitutes “minor league” in the rodeo world. Is there such a thing as a “premier league” for the gaming commission to recognize?

    It appears to me that, under SB 44, if the Gaming Commission deems any professional rodeo leagues as “premier,” then yes, you’ll be able to bet on rodeo. Under no circumstances will you be able to bet on college or high school rodeo.

    But read Section 21 carefully: betting does not appear to be limited to professional sporting events. So maybe, just maybe, Deadwood will take bets on mutton-busting.

  4. Cory Allen Heidelberger Post author | 2021-01-19

    Craig, your timeline is highly likely. Amendment A Section 7 gives the Department of Revenue until April 1, 2022, to promulgate the rules necessary to regulate and tax pot. Amendment B gave lawmakers no such cushion time. Amendment B imposed no timeframe; arguably, the Legislature could do nothing and leave casinos in limbo and unable to conduct sports betting with any legal certainty… but hey, there’s money to be made by some special industry friends, so the Legislature will act swiftly to ensure the smooth expansion of that business opportunity.

  5. Cory Allen Heidelberger Post author | 2021-01-19

    Hmm… for those who view politics from a scoreboard perspective, could we start opening up betting lines on ballot measures, elections, and court cases? What’s the spread on Jason Ravnsborg’s ability to save Amendment A against Matt McCaulley in court?

    Or could we create a sport called tie-spotting and take bets on how many centimeters shy of the top button Jason Ravnsborg’s necktie will be at his next public appearance?

  6. Porter Lansing 2021-01-20

    Sports betting is done on your phone. The sports book apps are owned by Fox, CBS, NBC, MGM Grand, and about five others. They are very high tech apps and extremely popular. Players deposit money, which is matched by the sportsbook. This free money is deducted from the taxable net sports books owe to Colorado. Many credit and debit cards don’t allow money to be transferred from players bank account or credit line to gambling apps. Withdrawal of winnings is immediate and then usually takes 2 days to be debited back to the source the player deposited from.
    All major sports worldwide are available, including college and amateur.
    Every time a player logs into a sports book a notice appears telling them the last time they logged in, thus reminding them of their gambling habit frequency. Warnings of gambling addiction are ubiquitous. Every log in is tracked with GPS to not allow a player to participate if they’re not within the borders of the state.
    Colorado is only receiving modest tax revenues compared to the legal marijuana taxation.

    – In September, there was an even bigger gap than previous months. Betters wagered $207,655,942.72, but Colorado only received $69,771.64.

    This is mainly due to the large amount of promotional free bets sports books have been offering, according to the head of Colorado’s Division of Gaming, Dan Hartman. He says operators are not taxed on those promotions.

    “When the legislation was crafted, the operators, pay the tax on the net betting proceeds. The net betting proceeds come from the money that’s bet, the money that’s returned to players, but then the operators get to take off their promotional money, and their excise tax that they pay to the federal government before we get to the net proceeds,” Hartman explained.
    – I question whether casino only sports betting is the way to go. Sports gambling is very mathematically complex and better left to professionals in Nevada to regulate, leaving the state less liable to fraudulent players and able to concentrate on regulation of the taxation on the money returned to users.

  7. Mark Anderson 2021-01-20

    I watch tennis, you can watch it if you deposit money with certain operators who hope you will bet. Its actually cheaper than the tennis channel, although sometimes it would help if you understood any eastern European language.

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