Some Republican legislators want to reduce property taxes by legalizing and taxing online sports betting. Sounds like a great idea… if you think lowering your property taxes is worth reducing personal investment, lowering credit scores, and causing more South Dakotans to go bankrupt.
Senator and candidate for U.S. House Casey Crabtree (R-8/Madison) is the prime sponsor of Senate Joint Resolution 504, which proposes to ask voters to write online sports betting into the state constitution. Crabtree’s amendment, co-sponsored by a mix of nine other Republicans, adds this crucial language to Article 25:
It is lawful for the Legislature to authorize by law wagering on sporting events by individuals located within and outside the city limits of Deadwood, by means of a mobile or electronic platform, provided the mobile or electronic platform is offered by or in partnership with a licensed casino and the platform has its servers located within the city limits of Deadwood. Ninety percent of the proceeds from all taxes imposed on wagering on sports events by means of a mobile or electronic platform must be used for property tax relief or to reduce property taxes in this state [SJR 504, filed 2026.01.23].
Deadwood would keep control of the sports books, as authorized by the voters in 2020, but most of the tax proceeds would lower property taxes across the state.
The Legislature has resisted previous efforts to open up sports betting to online gamblers outside of Deadwood. Crabtree and SJR 504 co-sponsor Senator Kyle Schoenfish (R-19/Scotland) backed a similar online sports-betting amendment in 2022 that squeaked through the Senate but died on Governor Kristi Noem’s say-so in House State Affairs. The full House blocked online sports betting in 2023. Senator Steve Kolbeck (R-2/Sioux Falls) sweetened the deal last year by adding property tax relief, but that measure didn’t make it out of its first committee hearing.
Research shows that legalizing online sports betting is bad for citizens’ financial health:
A 2024 paper by Scott Baker et al.… found “that increases in sports betting do not coincide with decreases in participation in lotteries or other online gambling outlets like poker sites.” Instead, “betting activity crowds out financial investments, leading to a reduction in net deposits to brokerage accounts.” They estimate, “that the causal effect of $1 of online sports deposits is a reduction in net investment of just under $1.”
A 2025 paper by Brett Hollenbeck et al.… found that average credit scores declined by three times as much in states with online access to sportsbooks as in states with only physical ones.
They estimated a “roughly 10% increase” in bankruptcies in states with online sportsbooks. “[T]his increase leads to. . . roughly 30,000 more bankruptcies a year” [John Johnson, “What the Research Shows About Mobile Sports Betting,” Blue Book, 2025.11.19].
South Dakota taxes sports betting in Deadwood at 9%. That tax has drawn $3.6 million in revenue over the last five years, with a bit over $925,000 in FY2025. New York taxes online sports betting at 51%. Even if allowing the Deadwood casinos to take bets online ten-tupled sports gambling revenue in South Dakota, an annual haul of $9.25 million would equal less than half a percent the property taxes South Dakotans pay.
SJR 504 offers a tiny bit of tax relief for a lot of financial grief.
Related Reading: Sports betting in general is ruining college athletics:
A college basketball point-shaving scheme involving more than 39 players on 17 NCAA Division I teams resulted in dozens of games in the previous two seasons being fixed by a gambling ring that included a former NBA player, according to a federal indictment unsealed Thursday in the Eastern District of Pennsylvania.
…Authorities described five defendants as “fixers,” who recruited players to participate in the scheme and offered bribes ranging from $10,000 to $30,000 to intentionally underperform. The bettors then placed and won millions of dollars in wagers on the fixed games, according to prosecutors.
…The college basketball indictment is the latest in a string of sports betting scandals. In the past two years, cases of events allegedly being manipulated have surfaced in the NBA, Major League Baseball and UFC.
…”Victims in this case span every sector of American life,” [U.S. Attorney David] Metcalf said. “The fans, the honest athletes, the teammates of these players who are working their tail off. … Everyone is victimized by that” [David Purdum, “Many College Players Among Dozens Charged in Point-Shaving Plot,” ESPN, 2026.01.15].
Told you so. Three years ago I advised SD to allow online sports betting like most every other state.
Too late, now.
South Dakota already allows betting on sports, elections, and whether the corn will be knee high by …
They’re called “Prediction Markets” and nearly every stock brokerage house now has them.
What are prediction markets?
Broadly, prediction markets are exchanges, like stock markets, where people bet on the outcomes of future events. Any event you can imagine could potentially be added to the market, including elections, economic indicators, sporting events, the Academy Awards, which coach a team will hire, etc.