DEADWOOD — Gaming has been good for Deadwood’s economy, transforming the town with a failing infrastructure into a premier tourist destination with about $100 million spent annually in the 26 casinos lining the streets.

Now Deadwood is looking to take another gamble, this time on sports betting.

Gaming officials believe the addition of sports betting will be a good wager.

“Using Las Vegas stats, (betting on sporting events) is about 1.5 percent of total casino gaming revenues, so in Deadwood’s $100 million dollar annual market, we might be able to generate $1.5 million in casino win annually,” said Mike Rodman, executive director of the Deadwood Gaming Association. 

In 2014, South Dakota voters approved a change to the state’s constitution allowing keno, craps, and roulette be added to Deadwood’s gaming lineup. Those games were placed on the casino floors on July 1, 2015, and resulted in about 10 percent of the table revenue – about $10 million.

Rodman believes Deadwood would see similar gains with the addition of sports betting. But additional spending would occur, he said.

“This would result in more hotel stays, retail sales, and food and beverage sales. We see the traditionally off-season time periods positively impacted by events like the Super Bowl, March Madness, and the World Series,” Rodman said. “Deadwood needs to continue to grow as a visitor destination that has an enormous impact on the Northern Hills and all of South Dakota’s tourism industry. Betting on sporting events gives us just one more option to attract additional visitors.”

Caleb Arceneaux, Liv Hospitality chief executive officer, said wagering on sporting events will certainly help maintain Deadwood’s relevance as a destination gaming market. 

“The proliferation of sports wagering across the country will force any legitimate, competing gaming market to adopt this game type to stay competitive,” Arceneaux said. “That is all we are asking the voters of the state to do - allow an additional game type to an already established and regulated gaming jurisdiction in the state. It really is a product development effort to help maintain Deadwood’s relevance as a gaming destination.” 

Rodman recognized that not all casinos would offer the expansion.

“Perhaps only a handful of gaming properties will want to make the investment for betting on sporting events, but they would keep Deadwood a competitive gaming destination as we know surrounding states are currently exploring adding sports betting, including North Dakota, Colorado, and Iowa,” Rodman said. “Sports betting in Deadwood would provide a legal, safe, regulated environment for those South Dakotans who enjoy betting on sporting events. Currently, sports bets are happening in South Dakota, just illegally and unregulated.”

A proposed initiated constitution amendment has been filed with Secretary of State’s office to permit the new bets.

South Dakota Attorney General Marty Jackley recently filed his Attorney General’s Explanation of the proposed amendment. 

As stated in the explanation, the constitution currently authorizes the legislature to allow certain types of gaming in Deadwood, including roulette, keno, craps, limited card games, and slot machines.  The proposed amendment authorizes the legislature to also include wagering on sporting events as a type of gaming allowed in Deadwood. 

The proposed constitutional amendment also allows for proceeds from Deadwood gaming to Deadwood historic restoration and preservation to be adjusted annually for inflation. The constitution currently requires the net municipal proceeds of Deadwood gaming to be devoted to Deadwood historic restoration and preservation.

This usually is the state law cap of $6.8 million annually, but varies to lower amounts at times with declining gaming revenue.

Also per the Attorney General’s statement, under federal law, any gaming authorized by the legislature to be offered in Deadwood would also be allowed at on-reservation tribal casinos.

The explanation will appear on a petition that will be circulated by the sponsor of the amendment. 

If the sponsor obtains a sufficient number of signatures, by November 2019, as certified by the Secretary of State, the amendment will be placed on the ballot for the November 2020 general election. 

The state assesses a 9 percent tax on Deadwood gaming revenues. Casinos are also charged a $2,000 per device or table fee. From those revenues, 1 percent goes to the state general fund, 40 percent to the state Department of Tourism, 10 percent to Lawrence County, and the rest to the South Dakota Gaming Association until its expenses are met. Following Deadwood’s revenue, excess funds are distributed to Lawrence County cities and school districts.

Rodman added the constitutional amendment proposal would also include a cost of living adjustment to Deadwood’s historic preservation proceeds, which have been capped for over 25 years at the same amount.

“It is our plan at the current time to present this to the (2019) legislature and ask them to place it on the 2020 ballot,” Rodman said. “We have not yet reached out to legislators to be the bill sponsors but will probably ask our District 31 legislators before the session starts.”

The legislative session begins Jan. 8, 2019

This article is a reprint from BHPioneer.com.  To view the original story and comment, click here.