Lottery officials plan smoking-ban reboundPIERRE — South Dakota Lottery officials are developing their strategy to help video gambling establishments rebound from the state’s expanded smoking ban.
By: Bob Mercer, The Daily Republic
PIERRE — South Dakota Lottery officials are developing their strategy to help video gambling establishments rebound from the state’s expanded smoking ban.
Their plan is still taking shape. It will be presented publicly at the Lottery Commission’s next meeting Sept. 28.
Look for penny play, payouts greater than 92 percent, cash acceptors for $50 and $100 bills, changes in seating requirements and the addition of a deputy executive director whose focus will be video lottery and especially the strategic plan.
State government is already advertising the deputy position, according to Lottery Director Norm Lingle. The application period closes Friday.
Lingle said he doesn’t know whether the right person will be found from that pool or the period will need to be extended.
“We’re excited about getting that person on board and up to speed,” Lingle said.
The commission chose a new chairman and a new vice chairman Wednesday in a pair of moves that further reflects the emphasis on video lottery.
Bob Hartford, of Pierre, is the new chairman. He was the executive director for the Music and Vending Association of South Dakota for more than a decade before his retirement after the 2010 legislative session.
The MVA, now led by Deb Mortenson, is one of the major organizations representing the video lottery businesses.
Doyle Estes, of Hill City, is the new vice chairman. He is a prominent lawyer and real estate developer in Rapid City, has served in a variety of civic roles at the local and state levels, and was involved in Deadwood gambling casinos.
He is married to Kathryn Johnson, an environmental scientist who is president of the South Dakota Board of Regents. The board governs the state’s public universities and special schools and has made improved funding a priority in its legislative agenda for 2013.
Estes’ Deadwood experience is already helping shape the strategic plan’s components. Approximately 70 percent of Deadwood slot-machine action involves penny games, and Estes suggests the lottery should go that direction.
The Legislature would need to change a state law for penny play to be allowed in the video lottery terminals.
“That is one that has been circled,” Lingle told Estes on Wednesday.
A review of the lottery’s laws and regulations is moving forward so that proposed changes can be submitted for the 2013 legislation session.
“With the statute package being put together, I fully expect that to be part of that package,” Lingle said. He added, “We are moving the ball forward.”
Hartford and Estes are among the five new members appointed by Gov. Dennis Daugaard to the Lottery Commission during the past two years. The commission has eight members total.
Last year the commission acted on the Daugaard administration’s recommendation and began allowing line-up games, which are similar to slot machines.
Video lottery terminals previously had only forms of computer poker, blackjack and keno games.
The change was protested by the Deadwood Gaming Association at the rules hearing, but no one filed a lawsuit.
Deadwood gambling interests subsequently succeeded during the 2012 legislative session in increasing the maximum bet limit to $1,000 from $100.
Of more than 9,000 video terminals in operation, more than 1,000 now feature the line-up games across South Dakota.
The lottery’s video administrator, Deb Reese, told commissioners that video revenue is running stronger during the first five weeks of the 2013 fiscal year that began July 1. She said the five-week total is 6 percent ahead of the similar period a year ago: $16.6 million vs. $15.7 million.
Net machine income, a term that describes the money players lose in the machines after winnings are paid, has been running at the 1996 level as a result of the smoking ban and the economy’s slowdown.
Director Lingle said the upturn so far this summer is encouraging. He said lottery directors from other states saw their video lottery play eventually bounce back from smoking bans.
“Hopefully we’ll catch up sooner rather than later,” Lingle said. “Hopefully we can shorten that time frame for it to come back.”
The lottery transferred $87.5 million from video lottery to the state treasury in fiscal 2012. The forecast calls for that amount to rise to $91.5 million in fiscal 2013. That compares to a peak of $111.9 million from video in fiscal 2008.