Bailey was 16-of-27 passing for 231 yards with 44 yards rushing to lead the Panthers (4-4, 2-3 Missouri Valley), who have won consecutive games since snapping a three-game losing skid.
Ryan Saeger was 11-of-21 for 133 yards passing with a first quarter touchdown to lead South Dakota (4-4, 2-3).
Bailey threw a 14-yard touchdown pass to Braden Lehman, and bullied in for a 1-yard TD run to cap an eight play, 83-yard drive to give the Panthers a 14-7 halftime lead.
Michael Schmadeke kicked field goals of 48 and 50 yards in the third quarter to cap the scoring.
The Coyotes had just 187 yards of offense with two fumbles and an interception.