South Dakota Pushes for Online Sports Betting Expansion with New Proposal

South Dakota lawmakers are making another attempt to expand sports betting within the state, this time through Senate Joint Resolution 507 (SJR 507). The resolution seeks to amend the state constitution to permit mobile and electronic sports wagering, allowing residents to place bets from anywhere within state lines. If approved by the legislature and passed by voters in the 2026 general election, this measure could significantly reshape South Dakota's gaming industry.

A Step Toward Modernizing Sports Betting

Currently, South Dakota's gambling laws remain highly restrictive. The state constitution only permits limited forms of gambling, including charitable gaming, state-run lotteries, and video gambling under strict regulations. Full-scale casino gaming, including slot machines, roulette, keno, and craps, is allowed exclusively in Deadwood, the state's historic gaming center.

The proposed amendment, championed by Senator Steve Kolbeck, aims to expand these limitations by introducing mobile and electronic sports betting. However, regulatory safeguards remain intact. Online betting platforms would need to partner with a licensed casino, and all betting servers must be housed within Deadwood's city limits. These measures ensure that oversight remains centralized while offering South Dakotans broader access to sports wagering.

Tax Revenue and Economic Impact

One of the most compelling aspects of SJR 507 is its approach to tax revenue allocation. As reported by NEXT.io, 90% of the tax income generated from online sports betting would be dedicated to property tax relief across the state. Meanwhile, tax revenue from traditional casino operations in Deadwood would continue supporting the city's Historic Restoration and Preservation Fund.

If enacted, this amendment could enhance South Dakota's competitiveness in the regional gaming market, particularly against neighbouring states that have already embraced online sports betting. With states like Iowa, Wyoming, Montana, and Nebraska offering mobile wagering, South Dakota risks falling behind unless it adapts to evolving industry trends.

Past Attempts and Legislative Challenges

South Dakota's journey toward online sports betting legalization has been fraught with obstacles. In 2020, voters approved Constitutional Amendment B, allowing retail sportsbooks in Deadwood and on tribal lands. This led to the establishment of physical sportsbooks in 2021, but online expansion efforts have since struggled.

A 2022 attempt, Senate Joint Resolution 502 (SJR 502), aimed to place an online betting measure on the ballot. Despite passing the state Senate by a slim 18-17 vote, it was ultimately blocked by the House State Affairs Committee. In 2023, House Joint Resolution 5006 (HJR 5006) sought a similar expansion, but it faced strong opposition in the House and was defeated by a 41-28 vote. Lawmakers cited concerns about potential conflicts with tribal gaming compacts, which complicated efforts to secure widespread legislative support.

The Road Ahead for SJR 507

Unlike previous efforts, SJR 507 enjoys bipartisan backing, with four co-sponsors from both major parties. However, despite this support, concerns over problem gambling remain a significant hurdle. Some lawmakers and advocacy groups have voiced apprehensions about the potential societal consequences of expanded online betting, particularly its impact on vulnerable populations.

South Dakota's decision comes at a time when neighbouring states are actively shaping their own gambling policies. While North Dakota recently rejected an online sports betting initiative due to opposition from university officials and community groups, other states like Minnesota are considering ballot measures to legalize mobile wagering.