By Dana Hess

For the S.D. Newspaper Association

BROOKINGS — Deadwood casinos are once again betting on South Dakota voters to allow them to expand their gaming choices. Amendment B authorizes the Legislature to allow wagering on sporting events at Deadwood casinos. If approved, tribal casinos would also be allowed to offer sports wagering.

“We know that sports wagering is happening in South Dakota,” said Mike Rodman, executive director of the Deadwood Gaming Association. “It’s happening illegally.”

Illegal bets are placed using bookies or websites. According to Rodman, players prefer a legal way to place their bets. That was evident, he said, when Grand Falls Casino in northwestern Iowa began offering sports betting.

“People were going across the border to place their wagers,” Rodman said.

Iowa, along with Colorado and Montana, are seen by Deadwood casinos as their main competitors. Iowa got sports betting in August of 2019 and it came to Colorado and Montana in May of this year.

“We want to continue to be competitive as a gaming destination,” Rodman said.

The biggest events for sports wagering—March Madness and the Super Bowl—take place during traditionally slow times for Deadwood casinos.

“Those are opportunities to drive more traffic to Deadwood,” Rodman said.

Deadwood gaming revenues are taxed at 9%. In 2012 a 1% tax was added that goes to the state’s general fund. The original 8% tax has 40% going to tourism, 10% to Lawrence County and 50% going to Deadwood historic preservation until that fund reaches $6.8 million. At that point 70% of the 50% goes to the state’s general fund, 10% to the local school district, 10% to other Lawrence County municipalities and 10% to Deadwood historic preservation.

Deadwood casinos also fund the state gaming commission, historic preservation grants and treatment programs for problem gamblers.

While the decision is up to the Legislature, Rodman assumes that sports wagering would be taxed at the same 9% rate.

Estimates on how much would be wagered at Deadwood vary. In December 2018 the Legislative Research Council estimated that $2.5 million would be wagered annually.

A gaming industry study estimated bets of $6.1 million annually creating 152 additional jobs in Deadwood and an overall boost to Deadwood gaming of 15%.

“Adding sports betting wouldn’t be of any significant value,” according to Rep. Steven Haugaard, R-Sioux Falls. “It’s of very little value to the state. It’s a net loss if even one person becomes addicted.”

South Dakota has an estimated 15,000 problem gamblers. Haugaard, who serves as the Speaker of the House in the Legislature, predicts young people will be tempted to channel their enthusiasm for fantasy football into sports wagering.

“An obsession with sports can certainly lead to an obsession with sports betting,” Haugaard said. “It really shouldn’t be a training ground for young people.”

Technology could bring sports betting out of Deadwood casinos. Rodman said Iowa and Colorado use “geofencing,” a technology that allows registered bettors with a phone app to place their wagers from anywhere in the state.

Montana uses pinpoint geofencing, allowing registered bettors to place their wagers if they are in one of the state’s liquor stores.

That option is available, Rodman said, “if other organizations wanted to be part of sports wagering.”

Haugaard notes that after Nevada, South Dakota is the most reliant on gaming revenues to fund state government.

“There’s a general degradation of individuals’ lives when they become obsessed with these things,” Haugaard said. “We just shouldn’t be taking advantage of vulnerable people.”

Amendment B is on the statewide ballot in the Nov. 3 general election. Absentee voting begins Sept. 18.

By Dana Hess

For the S.D. Newspaper Association

BROOKINGS — South Dakota voters aren’t seeing double; marijuana is on the ballot twice in 2020.

Initiated Measure 26 lays out the parameters for starting and running a medical marijuana program. Constitutional Amendment A takes an omnibus approach, calling on the Legislature to make rules for medical marijuana and setting the standards for legalizing the use of recreational marijuana.

Organizers for the two ballot measures say that they complement each other, and that the passage of Amendment A would protect the initiated measure from meddling by the Legislature.

“There’s always one legislator who thinks they know better than voters do,” said Melissa Mentele, executive director of New Approach South Dakota which is advocating for the medical marijuana measure.

Organizers are wary of the Legislature after its reworking of IM22, an anti-corruption measure approved by voters in 2016.

“We learned that the South Dakota Legislature is very willing and perfectly able to essentially gut a ballot issue,” said Drey Samuelson, political director of South Dakotans for Better Marijuana Laws which is championing Amendment A.

That argument is characterized as “garbage” by David Owen, president of the South Dakota Chamber of Commerce and Industry and a leader of the No Way on Amendment A coalition.

Lawmakers winnowed out the unconstitutional aspects of IM22, Owen said, and enacted legislation that provided for many of its anti-corruption features like an accountability board, limits on gifts to legislators and an increase in the time it takes to go from being a lawmaker to being a lobbyist.

“The voters’ intent was preserved,” Owen said. “It’s a distortion to say the whole thing was repealed.”

Workforce vs. economic development

Amendment A opponents are worried about the effect legalized recreational marijuana will have on the workforce. Owen explained that manufacturers in South Dakota rely on federal contracts which require a drug-free workforce.

“We’re going to see a spike in people failing drug tests,” Owen said, as well as an increase in businesses having to fire the people who fail those tests.

For his part, Samuelson predicts an “economic boom” with the passage of Amendment A as marijuana growing buildings and dispensaries are built.

A fiscal note on the attorney general’s Amendment A explanation predicts that state revenues from licensing fees, sales tax and a 15% excise tax would total $29.3 million in 2024. The revenues would be split with 50% for public schools and 50% for the state’s general fund.

“That’s a lot of money in a small state like South Dakota,” Samuelson said.

Owen notes the many costs of legalizing marijuana which include the administrative costs of the program, increased social services and more traffic fatalities.

“There’s a serious question how much of that $30 million is going to get to schools or the general fund,” Owen said. “We don’t think it’s the panacea proponents make it out to be.”

Balancing risks and rewards

Eleven states have legalized the recreational use of marijuana and, according to Samuelson, it remains popular in those states. He notes that legalization doesn’t necessarily lead to an increase in marijuana use but rather as a way to reduce opioid and heroin overdose deaths and defund drug dealers and cartels.

“You don’t have to be pro marijuana use to believe that prohibition doesn’t work,” Samuelson said.

The risks of legalization are too great for Owen who notes, “This is an intoxicant.” Legalization will lead to putting more youth at risk, traffic fatalities and abuse.

Medical marijuana on ballot, too

There are 37 states that have legalized medical marijuana, among them South Dakota’s neighbors Iowa, North Dakota and Minnesota. It’s also on the ballot in Nebraska this year.

IM26 backer Mentele said the measure was written to “help people with low incomes access medicine that can be very expensive.” The measure also allows for the home cultivation of a small amount of marijuana.

Mentele’s IM26 “pro” statement on the 2020 ballot question pamphlet quotes Gov. Kristi Noem on “trusting our citizens to exercise their personal responsibility to do what’s best for themselves and their loved ones.”

“That trust and weight should also be applied to cannabis,” Mentele said, noting that the passage of IM26 would get people who are currently circumventing the law into a legal market.

“We’re just trying to keep people out of prison,” Mentele said. “The narrative that this will create new users is false. Just because it’s legal doesn’t mean you have to do it.”

Medical group opposes IM26

“Medical marijuana is a misnomer,” according to Benjamin Aaker, MD, president of the South Dakota State Medical Association. Aaker notes that marijuana has about 400 different chemicals.

Legitimate medications are approved by the Food and Drug Administration. “We have active ingredients identified,” Aaker said. “We know the dose to give.”

There are no prescriptions written for medical marijuana. A patient with a chronic ailment would get a card from the doctor that would allow the patient to purchase marijuana at a dispensary.

Aaker said that voters considering legalizing medical marijuana should know that what they are voting for already exists. Marinol uses synthetic THC, the active ingredient in marijuana. It’s an FDA-approved drug for the relief of post-chemotherapy nausea.

“We can give it as a legitimate drug,” Aaker said. “We can already prescribe it right now.”

The SDSMA also opposes Amendment A. Marijuana use has the same harmful effects as smoking, Aaker said, and can lead to decreased judgment and response time, impairs adolescent brain development and can lead to schizophrenia.

Aaker predicts that if recreational marijuana is legalized it will lead to increased traffic accidents and more psychiatric diagnoses.

Both questions – Amendment A and IM26 – are on the statewide ballot in the Nov. 3 general election. Absentee voting begins Sept. 18.