PIERRE, S.D. (KELO) — South Dakota voters would get to decide yes or no on whether people can make sports wagers at Deadwood casinos through telephones, mobile devices and betting kiosks in other locations, under a proposed constitutional amendment that advanced Tuesday at the state Capitol.

The Senate Commerce and Energy Committee voted 5-4 to send the potential ballot measure to the full Senate for its consideration. The 35 senators will decide, possibly as early as Thursday, whether to stop it or let it continue on to the House of Representatives for further action.

South Dakota voters decided in 2020 they wanted the state constitution changed so that sports wagering could be allowed in Deadwood casinos. The Legislature developed laws and the first sports bets were cast last fall. The new proposal would let voters decide whether it should be legal for people to also make sports bets in Deadwood casinos from other places through their phones, devices and kiosks linked to the casinos.

A group of betting organizations including DraftKings, FanDuel and BetMGM sent lobbyists to support Senator Kyle Schoenfish, R-Scotland, in his effort to get the Legislature to put SJR 502 on the November statewide election ballot.

South Dakota’s lack of a corporate or personal income tax makes the state a favorable site, Schoenfish told the Senate committee Tuesday. He is a certified public accountant. “The goal here is to keep that business in South Dakota,” Schoenfish said.

The Flandreau Santee Sioux Tribe supports letting voters decide, according to the tribe’s attorney, Seth Pearman. He testified that the tribal casino at Flandreau doesn’t offer sports betting but he sees the competition Deadwood’s sports books face from the Grand Falls casino that’s just over the Iowa border and taps the Sioux Falls market.

“We see Iowa siphoning South Dakota cash all the time for sports betting,” Pearman said.

The South Dakota Retailers Association also supports letting the voters decide, said lobbyist Bill Van Camp, who described mobile wagering through Deadwood casinos as “the next logical step moving forward.”

Raining hellfire against the proposal from Governor Kristi Noem’s administration was David Wiest, deputy secretary for the state Department of Revenue. He called it “a major expansion of gaming in South Dakota” and said it has the potential to change the face of the state.

Wiest warned that the language of the ballot measure would “shackle the hands of the Legislature” to authorize sports wagering and would allow bets to be made from Florida or France. “We’ve got the right mixture of gaming in South Dakota right now. We don’t need any more,” he said.

The governor gets no say on legislative resolutions that propose constitutional amendments for the ballot. Wiest criticized Schoenfish for cutting to the head of the line, saying Schoenfish should have taken the proposal out to citizens to gather signatures to put it on the ballot.

But the Legislature did the same thing two years ago, when lawmakers used their constitutional authority and put sports wagering on the ballot. The first try, in 2019, failed as Noem’s administration fought it. The second try, in 2020, succeeded, in part because Noem dropped her opposition.

Rep. Scott Odenbach, R-Spearfish, also opposed Schoenfish’s direct attempt Tuesday. He said South Dakota’s top-producing source of gambling revenue, video lottery, causes social ills and called Schoenfish’s proposal “video lottery 2.0.” He said gambling should be done “in beautiful Deadwood, South Dakota” and not in the back of gas stations.

Laura Ringling from the state Department of Social Services, opposed it too, saying it would increase gambling-related harms in South Dakota.  

Norman Woods, a lobbyist for the Family Heritage Alliance, said people should be on their phones less. “Please do not try to raise money off the backs of addicts,” he told the committee.

Senator Wayne Steinhauer, R-Hartford, and Senator Lee Schoenbeck, R-Watertown, tried to kill the resolution. Steinhauer said he personally wasn’t fond of using gambling to fund state government, and Schoenbeck noted the Deadwood Gaming Association didn’t take a position for or against. “My understanding is they don’t have a consensus in their organization,” Schoenbeck said.

Schoenbeck asked whether people would be so gung-ho for this if the resolution said ‘video lottery’ rather than ‘sports wagering’ and there was the image of parents sitting around the house in their pajamas, betting video lottery on their phones. “I suspect you’d all say no.” 

Senator Erin Tobin, R-Winner, argued for letting it go to the voters. She said remote sports wagering was already happening illegally, and making it legal in South Dakota would mean that state government could collect revenue that could be used for addiction counseling.

Tobin added, “I know this is mercilessly addictive to some people, but It’s some people.”  

Senator Larry Zikmund, R-Sioux Falls, seconded her motion to move the resolution ahead. Zikmund said he doesn’t gamble but people should be able to if they want to. “It’s here folks and it’s coming, no matter what time we do it,” Zikmund said. “Let the people decide which way they want to do it.” 

Senator David Wheeler, R-Huron, said South Dakota is about freedom and personal responsibility. He said it’s legal for people to drive to Iowa and bet on sports there. He acknowledged the 2% who become addicted but said he was more concerned about freedom for the 98% who can handle it.