Legislators might permit 15 video lottery terminals
PIERRE -- House Democratic leader Bernie Hunhoff said Monday he can support allowing video lottery establishments in South Dakota to have more machines. But he wants state funding to be more easily available for addiction services.
The Yankton lawmaker proved to be the key swing vote Monday as a House committee endorsed the expansion on a 7-5 vote. The full House of Representatives could consider the legislation as early as this afternoon.
The measure, SB 180, would increase the maximum to 15 machines per licensed establishment. The limit has always been 10. Machines 11 through 15 would need to feature new technology.
If the House adopts an amendment to meet Hunhoff's request and then passes the new version, it would need to return to the Senate for a decision whether to agree.
The Senate passed the legislation in its original form 22-12 on Feb. 19.
Depending upon how the amendment is written, the legislation could require a two-thirds majority in each chamber: 47 yes votes in the House and 24 in the Senate.
About 450 of the approximately 1,400 establishments are at a maximum of 10 machines, according to Rep. Dick Werner, R-Huron. He is the bill's lead sponsor in the House.
The bill's prime sponsor, Sen. Dan Lederman, said there are about 9,000 machines in play.
Lederman, R-Dakota Dunes, said he asked himself whether this is an expansion when the businesses could have up to 14,000 machines already.
"We tax video lottery higher than any other product in the state at 50 percent," Lederman said. "That just solidifies it's a public-private partnership with these folks."
Norm Lingle, executive director for the South Dakota Lottery, said the expansion to 15 machines is one of the recommendations from the state Lottery Commission.
The commission ordered a 2013 study because video lottery had become stagnant since its creation 25 years ago.
"It became very mature. Very few if any changes were made to the video lottery program," Lingle said.
In 2002 video lottery had roughly 60 percent of the gambling market in South Dakota. That decreased to 42 percent 10 years later, while Deadwood and tribal casinos gained market share.
Lingle said some establishments have customer demand for additional machines. A new machine will cost "somewhere in the neighborhood of $13,000," he said.
There are about 7,000 VLC "legacy" machines still in the field while new machines are performing better by about $16 daily in net machine income, according to Lingle.
The VLC machines were declared obsolete by the lottery commission in 2008, he said.
Expanding to a 15-machine limit would give businesses more flexibility, Lingle said. The goal is to increase player appeal and loyalty, he said.