25.774.16 100th Legislative Session 1203
2025 South Dakota Legislature
House Bill 1203
Introduced by: Representative Weisgram
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An Act to authorize the operation of pari -mutuel historical horse racing machines, 1
and to authorize a new tax. 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3
Section 1. That § 42-7B-1 be AMENDED: 4
42-7B-1. Limited card games, slot machines, craps, roulette, keno, pari-mutuel 5
historical horse race wagering, and wagering on sporting events are hereby authorized, 6
and may be operated, conducted, and maintained, within the city limits of the city of 7
Deadwood, South Dakota, subject to the provisions of this chapter. 8
Section 2. That § 42-7B-4 be AMENDED: 9
42-7B-4. Terms used in this chapter mean: 10
(1) "Adjusted gross proceeds," except in the case of the games of poker, gross 11
proceeds less cash prizes. In games of poker, the term means any sum wagered 12
in a poker hand that may be retained by the licensee as compensation which must 13
be consistent with the minimum and maximum amount established by the 14
commission; 15
(2) "Advance deposit sports wagering," a method of wagering on sporting events in 16
which an eligible individual may, in an account established with a licensed operator 17
or route operator, deposit money into an account and use the balance to pay for 18
bets placed on the premises of a licensed gaming establishment as approved by 19
the commission in the city of Deadwood; 20
(3) "Associated equipment," any equipment or any mechanical, electromechanical, or 21
electronic device, component, or machine, or any combination thereof, that is used 22
remotely or directly in connection with gaming or any gaming device; 23 25.774.16 2 1203
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(4) "Associated equipment manufacturer or distributor," any a person who designs, 1
assembles, fabricates, produces, constructs, sells, leases, distributes, or otherwise 2
prepares a product or component of any associated equipment; 3
(5) "Bet," an amount placed as a wager in a game of chance or on the results of a 4
sporting event or a contingency during a sporting event or the performance or 5
nonperformance of an athlete or competitor during a sporting event; 6
(6) "Blackjack," a card game played by a maximum of seven players in which each 7
player bets against the dealer. The object is to draw cards whose value will equal 8
or approach twenty-one without exceeding that amount and win bets, payable by 9
the dealer, if the player holds cards more valuable than the dealer's cards; 10
(7) "Cheating," any an attempt to alter the elements of chance, method of selection, 11
or criteria that determines the: 12
(a) Result of a game; 13
(b) Amount or frequency of payment in a game; 14
(c) Value of a wagering instrument; 15
(d) Value of a wagering credit; 16
(e) Result of a sporting event or an event within a sporting event; or 17
(f) Performance or nonperformance of an athlete or competitor during a 18
sporting event; 19
(8) "Cheating device," any a computerized, electronic, electrical, or mechanical device, 20
or any software or hardware, or any a combination thereof, that is designed, 21
constructed, altered, or programmed to obtain an advantage at playing any game 22
or placing any bet that is offered by a licensee, including a device that: 23
(a) Projects the outcome of the game or bet; 24
(b) Keeps track of cards played or cards prepared for play in the game; 25
(c) Tracks play and analyzes the probability of the occurrence of an event 26
relating to the game or bet; or 27
(d) Tracks play and analyzes the strategy for playing or betting to be used in 28
the game except as may be made available as part of an approved game or 29
otherwise permitted by the commission; 30
(9) "City limits," the boundaries of the city of Deadwood as they existed on January 1, 31
1989; 32
(10) "Collegiate sporting event," an athletic competition or event between two or more 33
colleges or universities; 34
(11) "Commission," the South Dakota Commission on Gaming; 35 25.774.16 3 1203
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(12) "Craps," a game in which the players place bets on the outcome of the roll or series 1
of rolls of a pair of dice; 2
(13) "Fraudulent scheme," a dishonest or deceptive plan or arrangement used or 3
intended to be used to play a game or slot machine or place a bet, that gives any 4
a person an advantage when playing a game or slot machine, or placing a bet; 5
(14) "Fraudulent technique," a dishonest or deceptive procedure or method of playing 6
a game or slot machine, or placing a bet that gives any person an advantage when 7
playing a game or slot machine, or placing a bet; 8
(15) "Gaming," limited card games, slot machines, craps, roulette, keno, pari-mutuel 9
historical horse race wagering, and wagering on sporting events, as allowed and 10
regulated by this chapter; 11
(16) "Gaming device," a poker table, a blackjack table, a slot machine, a craps table, a 12
roulette table, a pari-mutuel historical horse race machine, or a keno number 13
selection device; 14
(17) "Gaming employee," any a person twenty-one years of age or older employed by 15
an operator, retailer hosting gaming, or sports wagering services provider, who 16
works directly with the gaming portion of that business and who must hold a 17
support license; 18
(18) "Gaming equipment," any equipment used in gaming that is allowed by this chapter 19
and which requires licensing; 20
(19) "Gaming license," any a license issued by the commission pursuant to this chapter 21
which authorizes any person to engage in gaming within the city of Deadwood; 22
(20) "Gaming property owner," any a person other than a licensed retailer who owns 23
real property where licensed gaming is conducted within the city of Deadwood. The 24
term, gaming property owner, provided the term does not include any a person 25
who owned real property where licensed gaming was conducted within the city of 26
Deadwood prior to January 1, 2010; 27
(21) "Historic restoration and preservation," the restoration and preservation of the city 28
of Deadwood to maintain its historical background, cultural heritage, and necessary 29
supporting infrastructures; 30
(22) "International sporting event," an international team or individual sporting event 31
governed by an international sports federation or sport's governing body, including 32
sporting events governed by the International Olympic Committee and the 33
International Federation of Association Football; 34 25.774.16 4 1203
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(23) "Keno," a game in which players place bets by marking their selections on a blank 1
ticket form with eighty numbered selection boxes and the outcome is determined 2
by a number selection device; 3
(24) "Key employee," any an executive, employee, or agent of a gaming licensee having 4
the power to exercise a significant influence over a decision concerning any part of 5
the operation of a gaming licensee; 6
(25) "Licensed gaming establishment," any a premises licensed pursuant to this chapter 7
where gaming is conducted; 8
(26) "Licensee," any a person licensed under this chapter; 9
(27) "Licensing authority," the South Dakota Commission on Gaming; 10
(28) "Limited card games," any a card games game, including poker, blackjack, and 11
variations of poker and blackjack, that are authorized by this chapter and regulated 12
by the commission; 13
(29) "Minor league sporting event," a sporting event conducted by a sports league that 14
has not been classified by the commission as a premier league in the sport; 15
(30) "Net municipal proceeds," the amount remitted to the city of Deadwood by the 16
South Dakota Commission on Gaming; 17
(31) "Operator," any a person who places poker tables, blackjack tables, slot machines, 18
craps tables, pari-mutuel historical horse race machines, roulette tables, keno 19
number selection devices, or accepts or redeems bets, in the person's own business 20
premises; 21
(32) "Poker," a card game played by players who are dealt cards by a nonplayer dealer. 22
The, where the object of the game is for each player to bet the superiority of the 23
player's own hand and win the other players' bets by either making a bet no other 24
player is willing to match or proving to hold the most valuable cards after all the 25
betting is over. Poker, providing the term includes draw, stud, low ball, or any a 26
combination thereof; 27
(33) "Professional sporting event," a sporting event, other than a minor league sporting 28
event, in which two or more persons participate and receive remuneration in excess 29
of their out-of-pocket expenses for participating in the event; 30
(34) "Retailer," any a licensee who maintains gaming at the licensee's place of business 31
within the city of Deadwood for use and operation by the public; 32
(35) "Retail space," the area where the retailer's business is principally conducted; 33
(36) "Roulette," a game in which players place bets on a single number or a range of 34
numbers or the colors red or black or whether the number is odd or even or a 35 25.774.16 5 1203
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combination thereof and the winning numbers and color are determined by a ball 1
which is spun on a wheel; 2
(37) "Route operator," any a person who, individually or jointly, pursuant to an 3
agreement whereby consideration is paid to accept or redeem bets or for the right 4
to place poker tables, blackjack tables, slot machines, craps tables, pari-mutuel 5
historical horse race machines, roulette tables, or a keno number selection device, 6
engages in the business of accepting or redeeming bets or placing and operating 7
poker tables, blackjack tables, slot machines, craps tables, roulette tables, or a 8
keno number selection device within the city of Deadwood; 9
(38) "Slot machines," any mechanical, electrical, or other device , contrivance, or 10
machine which, upon insertion of a coin, token or similar object, or upon payment 11
of any consideration whatsoever, is available to play or operate, the play or 12
operation of which, whether by reason of the skill of the operator or application of 13
the element of chance, or both, may deliver or entitle the person playing or 14
operating the machine to receive cash premiums, merchandise, tokens, 15
redeemable game credits or anything of value other than unredeemable free games 16
whether the payoff is made automatically from the machines or in any other 17
manner; 18
(39) "Slot machine manufacturer or distributor," any a person who designs, assembles, 19
fabricates, produces, constructs, sells, leases, distributes, or otherwise prepares a 20
product or a component part of a slot machine, other than tables or cabinetry; 21
(40) "Sporting event," a contest or competition between individuals or teams the results 22
of which are determined at least in part by the skill or ability of an individual athlete 23
or competitor or a team which is competing in the event; 24
(41) "Sporting event official," any an official as recognized by the respective sport’s 25
governing body; 26
(42) "Sports wagering area," the designated location in a gaming establishment 27
approved by the commission, in which sports wagering may be conducted; 28
(43) "Sports wagering services provider," a person who maintains or operates the 29
software or hardware of a sports wagering system or facilitates wagering on a 30
sporting event by providing a service, including data aggregation, risk 31
management, computer service, furnishing information, and setting of odds; 32
(44) "Suitability" or "suitable," in relation to a person is the ability to be licensed by the 33
commission and as to acts or practices, are lawful acts or practices; 34 25.774.16 6 1203
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(45) "Unsuitability" or "unsuitable," in relation to a person is the inability to be licensed 1
by the commission because of prior acts, associations, or financial condition, and 2
as to acts or practices, are those that would violate the statutes or rules or would 3
be contrary to the declared legislative purpose of this chapter; and 4
(46) "Wagering on sporting events" or "sports wagering," the acceptance of a wager on 5
an authorized sporting event by any a system of wagering authorized by the 6
commission. 7
Section 3. That § 42-7B-7 be AMENDED: 8
42-7B-7. The commission may promulgate rules, pursuant to chapter 1-26, for 9
the orderly transaction and conduct of its business and the substantive rules that it may 10
determine proper concerning: 11
(1) The issuance, revocation, and suspension of gaming licensees; 12
(2) The division of limited card games, slot machines, craps, roulette, keno, pari-13
mutuel historical horse race machines, or devices used to accept or redeem bets, 14
that may be placed in any building or retail business; 15
(3) The conduct and operation of gaming; 16
(4) Variations of limited card games, craps, or roulette; and 17
(5) Any other things necessary to carry out the purposes of this chapter. 18
The commission may also promulgate rules necessary to administer complaints 19
received from the public and conduct such other investigations and inspections into the 20
conduct of the games and the licensees and the maintenance of the equipment as the 21
commission deems necessary and proper. License issuance, suspension, and revocation 22
are contested cases within the meaning of chapter 1-26. The commission's rules may 23
provide procedures for summary suspension of any license issued under this chapter and 24
shall provide for subsequent contested case hearings before suspensions become final or 25
a license is revoked. The commission may apply for injunctive or declaratory relief to 26
enforce the provisions of this chapter and any rules promulgated thereunder. Action by 27
the commission may not limit the authority of the state's attorney or attorney general 28
from enforcing criminal actions. 29
Section 4. That § 42-7B-15 be AMENDED: 30
42-7B-15. A licensed gaming establishment shall obtain approval of its rules for 31
blackjack, poker, craps, roulette, keno, pari-mutuel historical horse race wagering, and 32 25.774.16 7 1203
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sports wagering from the commission and clearly post the approved rules within plain view 1
of any applicable gaming table or area in which the gaming is offered for play. 2
Section 5. That § 42-7B-16 be AMENDED: 3
42-7B-16. A full complement The number of gaming devices, excluding pari-4
mutuel historical horse race machines, may not exceed thirty per retail license. 5
The number pari-mutuel historical horse race machines may not exceed four per 6
retail license. 7
Section 6. That § 42-7B-18 be AMENDED: 8
42-7B-18. The retail space of a licensee shall must be identified by a physical 9
layout within a building, called the retail floor plan. The retail floor plan showing the 10
location of each gaming device shall must be submitted to the commission at the time of 11
application, and is subject to prior approval by the Deadwood City Commission. Approval 12
is subject to gaming rules and those rules pertaining to public health, safety, good order 13
and general welfare of the City of Deadwood. The retail gaming license may only be 14
granted to the retailer. All gaming devices shall must be located within the retail space of 15
the business. The number of gaming devices may not exceed thirty per building the limit 16
set forth in § 42-7B-16. 17
Section 7. That § 42-7B-28 be AMENDED: 18
42-7B-28. There is hereby imposed an eight percent gaming tax on the adjusted 19
gross proceeds of gaming allowed by this chapter, except pari-mutuel historical horse race 20
wagering. 21
Section 8. That § 42-7B-28.1 be AMENDED: 22
42-7B-28.1. In addition to the gaming tax imposed by § 42-7B-28, there is hereby 23
imposed an additional one percent tax on the adjusted gross proceeds of gaming allowed 24
by this chapter, except pari-mutuel historical horse race wagering. The tax shall be paid 25
to the commission and transferred to the general fund on a monthly basis notwithstanding 26
the provisions of §§ 42-7B-48 and 42-7B-48.1. 27
Section 9. That a NEW SECTION be added to chapter 42-7B: 28 25.774.16 8 1203
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There is imposed on pari-mutuel historical horse race wagering, a tax of nine 1
percent on the net winnings of pari-mutuel historical horse race wagering. 2
For purposes of taxation, net winnings are the total payout from a pari -mutuel 3
betting pool in a historical horse race. 4
Section 10. That § 42-7B-48 be AMENDED: 5
42-7B-48. There is established within the state treasury the South Dakota Gaming 6
Commission fund, into which shall be deposited the proceeds from the a gaming tax, 7
license stamp fees, license fees, application fees, the net proceeds generated by the 8
operation of the five-cent slot machines, and the initial fund is continuously appropriated 9
for the purposes specified in this section. All funds moneys received by the commission 10
shall must be set forth in an informational budget as described in § 4-7-7.2 and be 11
annually reviewed by the Legislature. Any disbursement of moneys from the Gaming 12
Commission fund shall, except moneys from the gaming tax imposed pursuant to section 13
9 of this Act, must be by authorization of the executive secretary for any of the following 14
purposes: 15
(1) Forty percent of the gaming tax collected shall be transferred to the tourism 16
promotion fund created in § 1-52-17, and ten percent of the gaming tax collected 17
shall be paid to Lawrence County; 18
(2) The expenses of the commission for administration and operation including 19
litigation and enforcement of this chapter and chapter 42-7 and for grants as 20
provided by § 42-7B-48.3; and 21
(3) All funds remaining after the payments provided in subdivisions (1) and (2), less 22
one hundred thousand dollars which shall be transferred to the historical 23
preservation loan and grant fund created in § 1-19A-13.1 constitute the net 24
municipal proceeds and shall be disbursed at least quarterly to the City of 25
Deadwood for deposit in the historic restoration and preservation fund. 26
Section 11. That § 42-7B-48.1 be AMENDED: 27
42-7B-48.1. Disbursements from the Gaming Commission fund shall must be as 28
set forth in made pursuant to § 42-7B-48, until such time as the net municipal proceeds 29
paid to the City of Deadwood equals equal six million eight hundred thousand dollars for 30
each year, and after payment of commission expenses pursuant to subdivision 42-7B-31
48(2), and after payment of one hundred thousand dollars to the State Historical 32
Preservation Grant and Loan fund pursuant to subdivision 42-7B-48(3). Thereafter Except 33 25.774.16 9 1203
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as provided in section 12 of this Act, all remaining funds shall moneys must be distributed 1
as follows: 2
(1) Seventy percent to the state general fund; 3
(2) Ten percent to be distributed to municipalities in Lawrence County, except the City 4
of Deadwood, pro rata according to their population; 5
(3) Ten percent to be distributed to school districts, pro rata based upon the previous 6
year's average daily membership, located in whole or in part, in Lawrence County. 7
For any school district located only partly in Lawrence County, only that portion of 8
the district's average daily attendance which represents students residing in 9
Lawrence County shall must be considered in calculating the proration required by 10
this subdivision; and 11
(4) Ten percent to the City of Deadwood for deposit in the historic restoration and 12
preservation fund. 13
Section 12. That a NEW SECTION be added to chapter 42-7B: 14
Moneys collected pursuant to section 9 of this Act must be distributed as follows: 15
(1) Forty-five percent to special racing revolving fund; 16
(2) Five percent to the South Dakota-bred racing fund; and 17
(3) Fifty percent according to the distribution provided in § 42-7B-48.1. 18