Lottery revenue rose for treasury last year
PIERRE — State government received nearly $117.4 million of revenue from gambling on South Dakota Lottery products during the budget year that closed June 30.
"It was a great team effort," Executive Director Norm Lingle told members of the South Dakota Lottery Commission Friday.
Revenue this year is predicted to reach $123.4 million.
Instant scratch-off ticket sales set a record, according to Deputy Director Clark Hepper. They rose to $30,181,754, up from $26,068,946.
One reason: A promotion called Fresh Fridays that rolls out new instant games each month, Hepper said.
Online lotto sales bounced around again. They reached $27,999,156. That was up from $23,009,677.
The high mark for lotto sales in the past decade came in 2013 when they hit $32,048,317. Hepper said bigger jackpots draw more interest from lotto players.
For video lottery, net machine income climbed to $220,624,198. That was up from $212,377,795.
State government takes half of the net machine income. Establishments and owners keep the other half that gamblers lose in the privately run terminals.
Video lottery topped the $220,125,230 recorded in 2009 when people could still smoke in businesses that sold alcohol for on-premises drinking.
South Dakota voters in November 2010 ratified the Legislature's decision to ban smoking in those establishments.
They are the only places video lottery terminals are allowed in South Dakota.
After the anti-smoking vote, video lottery income sank for several years, finally hitting bottom at $176,644,130 in 2013, and gradually climbed back.
One reason for the rebound was the election of Gov. Dennis Daugaard in 2010. He encouraged the commission to try line games.
The newer terminals gained acceptance among many owners.
There were 6,104 legacy terminals and 2,907 line games in August 2016. By August 2018, legacy terminals were down to 5,352, while line games rose to 3,746.
"We're starting to see a turnover in our market," Hepper told commissioners.
Many of the old terminals are 1990s-era VLC 8700 models that the commission declared obsolete a decade ago when the manufacturer stopped selling replacement parts.
But owners continue to run them, swapping parts from terminals taken out of service.
The new terminals generate more than $90 apiece per day in net machine income. That is nearly double what old terminals produce.
Six counties last year didn't have video lottery or lotto: Oglala Lakota, Todd, Corson, Ziebach, Dewey and Buffalo.
Those are home grounds for the Oglala, Rosebud, Standing Rock, Cheyenne River and Crow Creek tribal reservations.
Corson, Ziebach and Dewey didn't have any businesses with South Dakota Lottery products.
"It's interesting data," Chairman Bill Shorma of Dakota Dunes said.