S.B 209 IS ATTEMPTING TO ALLOW CHANGE VIDEO LOTTERY ESTABLISHMENTS STATEWIDE

Soon, the 2023 South Dakota Legislature will be hearing a public matter related to allowing "Sports Wagering" in Licensed Video Lottery Establishments, whereas the Gaming Commission approves of such practice to occur within such a place of business.

Posed as an An Act to authorize sports wagering in certain licensed alcoholic beverage retailer establishments - the gaming commission under S.D.C.L 42-7B-4 would be amended to allow for the Gaming Commission to approve of such establishment(s) to obtain a license to partner with, and to hold a Public Sports Wagering Service in connection to City of Deadwood-SD, of which is States main place of business to host such types of activity.

In 1989, the Legislature had approved the City of Deadwood to qualify as an official licensed entity to hold the centralized Sports Wagering Business of the State, of which defined the city limits known as the City of Deadwood to be the main place of business where all State Citizens may, or may not be approved of to provide for, and take bets, and to interact within the system.

If approved, the Gaming Commission may enter inter agreements with other Statewide Gaming Establishments, aka Video Lottery locations, to become equal partners with the City of Deadwood, so long as they meet the conditions set forth in statute.

All net proceeds stemming from Sports Wagering, and any such activities within the city limits of Deadwood - are to benefit the Historic Preservation to maintain its historical background, cultural heritage, and necessary supporting infrastructures.

Types of sports wagering events that the public may engage within, would include Minor League sports betting, horse racing, collegiate sports betting, any such sporting event, qualified as such by the gaming commission itself.

All "licensed gaming establishments" approved by the gaming commission would be allowed under state law to hold a sports wagering license, this means any such place of business that provides any forms of video lottery, gaming products, services.

Any sports wagering may only be conducted on the premises of a licensed gaming establishment as approved by the commission within the city of Deadwood or within the interior of a licensed affiliate business. Each operator or route operator that is authorized by the commission to conduct sports wagering shall install and maintain equipment that is approved by the commission to ensure that all bets are placed on the premises of a licensed gaming establishment as approved by the commission within the city of Deadwood or within the interior of a licensed affiliate business - S.D.C.L 42-7B-79 Amended

How may this change affect the future of video lottery, let alone gaming institutions within the City of Sioux Falls?

If approved, any such place of business across the state itself, would become an "Affiliated Licensed Business" in a joint partnership with the City of Deadwood (SD), with the goal, the criteria, and ability to participate in the sports wagering activity.

To better understand Affiliated Business Agreements, one must understand how two, or more companies can legally align themselves in partnerships, under state laws, in order to act within the means of governing themselves under common goals.

In an article written by Jean Murray, titled "What Are Affiliates and Affiliate Agreements in Business" published in January of 2023, she best explains it as an "official attachment" of one business entity to another. Official attachment implies a contract or agreement of some kind and an announcement to the public of the connection between the two businesses.

An affiliate agreement is a contract between two parties: the host or offering business and the affiliate. Under an amended version of South Dakota Codified Law - the Gaming Commission would act as the "host", of which the City of Deadwood acts as the licensed sports wagering company, of which now by means of acting through the gaming commission, would enter into an affiliate agreement (contract) any other gaming establishment (video lottery, state lottery, etc) across the State of South Dakota.

Affiliates are business entities that are attached to other businesses based on a contractual affiliation agreement,

An affiliate agreement is a contract between two parties: the host or offering business and the affiliate,

Whether one business is an affiliate of another is based on common ownership, common management, and the existence of a contract,

Corporate affiliates are typically related to a business by way of position of a member or as a subsidiary,

Affiliate marketing is common in the retail industry, where retailers may use affiliates to sell products or services.

Under S.D.C.L 42-7B-33, Any person, any stockholder owning five percent or more of any corporation or limited liability company, and any officer or director, or any partner in any partnership involved as a manufacturer, distributor, operator, retailer, gaming property owner, or sports wagering services provider, or licensed affiliate business, or key employee or support licensee involved with the conduct of gaming.

So, within the "interior" of the South Dakota Gaming Authority, the City of Deadwood would now be allowed to partner with, enter into a business contract with any such video lottery or gaming institution anywhere within the "State" itself, including within the City of Sioux Falls,

"The Small Business Administration (SBA) says that an individual, entity, or business (Business A) is an affiliate of another business (Business B) if Business B has control over Business A, based on one of several factors. The SBA considers factors such as ownership, management, previous relationships with or ties to another business, and contractual relationships."

Recently, the City Council adopted new ordinances to govern over the field of Video Lottery, restricting the total # of Video Lottery Establishments at 185 locations with the ability to increase the number by 1 per every 3,000 new residents each year.

If adopted by the 2023 South Dakota Legislature - the 185 Video Lottery Establishments, let alone any such business within the City of Sioux Falls that provides for, the institution of the State Lottery, would be allowed to become affiliated with the City of Deadwood, to extend the services of Sports Wagering to as many of the State Citizens as possible.

As the video lottery establishments begin to adapt to some of the new rules, and regulations as imposed by the City Council, here in Sioux Falls, they may soon have a new means of increasing their revenues under the newfound "cap" as imposed by the City of Sioux Falls.

In closing, in online retailing, affiliation is common in marketing and selling wherein one company may affiliate with another to sell products or services. The seller has a website on which affiliates may sell products. The seller has control over the site and pays a commission to affiliates. This relationship is sometimes called "affiliate marketing".

The goals being adapted to, would be to expand the the business of sports wagering across the "State" by allowing the City of Deadwood the authority to enter into a relationship with other companies across the state, of which allows them to market, advertise, sell their products, reach out to new, potential customers, with the goal to increase its revenues, of which their net profits now go back to benefit the Historical Preservation of the City of Deadwood, to promote its culture, background, heritage, and its necessary supporting infrastructure.

That means, all net proceeds collected as part of this newfound concept of an "interior affiliated business arrangement" would be the property, and jurisdictional control of the City of Deadwood itself. All of the Video Lottery Establishments of which become approved by the gaming commission, would effectively become 'independent contractors" of the City of Deadwood.