Browse articles by topic

South Dakota approves tax changes ahead of sports betting introduction


South Dakota has taken a step closer to the limited introduction of sports betting after state gambling officials amended and passed final regulations.

The rules, having now been approved by South Dakota Commission on Gaming (SDCG), are set to be considered by the state legislature for approval on 2 August, with operators to then be licensed ahead of the start of the National Football League (NFL) season in September.

The approved regulations include a significant change to the initial proposals with federal excise taxes no longer allowed to be deducted from sports wagering revenue totals. Operators are to pay a state tax rate on sports betting revenue of 9%.

The rules also include a $5,000 application fee for sports betting service providers to cover out-of-state travel for background checks, as well as commitments on record-keeping and surveillance methods.

In addition, the approved rules, drafted in May, dictate specific language for sports wagering equipment record inspection, along with the prohibition of gambling equipment suppliers from gambling on sports betting equipment or manufacturing slot machines.

Sports betting is only to be allowed in the town of Deadwood, a popular tourist attraction and the only town in the state with legal casino gaming, after voters there approved the introduction of in-person wagering at casinos in November. Mobile betting will be allowed on casino premises with bettors having to register for the service -in-person.

Senate Bill 44, which legalises sports betting, was signed by Governor Kristo Noem in March 2021.

Deadwood is a six-hour drive from the state’s largest city, Sioux Falls, which is on the border with Iowa, a legal market that does not require in-person mobile registration. Neighboring states Wyoming and Nebraska both passed sports betting legislation this year.

Under federal law, any gaming authorized in Deadwood would also be allowed at on-reservation tribal casinos upon amendments to current tribal gaming compacts.