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Video lottery lobbyists lose 2nd try to get more machines and bigger bets

PIERRE -- Video lottery lobbyists made another run Friday in the Legislature to raise South Dakota's bet limit on video gambling to $5 from the current $2.

They lost again. And this time, the cost was much more.

The original $5 legislation, Senate Bill 167, was rejected 6-3 by the Senate committee on state affairs Feb. 6. On Friday, video gambling lobbyists came back through the other side of the legislative process.

They went to the House of Representatives committee on state affairs and sought to attach the $5 limit to another gambling expansion measure, Senate Bill 175, which had already been passed by the Senate. It would allow establishments to have more machines.

The first try at adding the $5 language to the bill failed on a 6-6 vote. It needed seven "yes" votes to be added.

So, Rep. Chuck Turbiville, RDeadwood, tried again.

He offered a more drastic change, stripping the legislation of its original purpose and inserting the $5 limit in its place. This time, Turbiville succeeded -- momentarily.

"Video lottery is here to stay. I understand there are addictions," said Turbiville, a past head of the Deadwood Gaming Association.

He said there are addictions to drinking and smoking, too. "There are some of us addicted to Big Macs," he continued. "I don't see us coming in to try to shut that down."

He picked up support from Rep. Brian Gosch, R-Rapid City, who called it "a good compromise."

Gosch said there wouldn't be an expansion of machines in the establishments, but the bet limit would increase for the first time since video lottery began in 1989.

The strategy backfired. The committee voted 7-4 to kill the bill altogether.

"We continue to creep forward with gambling and ignore the problems," said House Democratic Leader Bernie Hunhoff, of Yankton, before voting against it.

Sen. Bob Gray, R-Pierre, was prime sponsor of both measures. The original purpose of the legislation that was up for hearing Friday was to give video gambling establishments more flexibility to add the new slot-machine types of games.

Called line-up games, they were authorized by the South Dakota Lottery Commission last year. But establishments haven't been lining up to add the new machines because in thousands of instances their old models remain usable.

As passed by the Senate on Feb. 10, Senate Bill 175 would have allowed establishments to have up to 14 terminals. The current limit is 10. The legislation specified that if there are more than 10, the additional terminals must use the new software. The Senate voted 24-6 in favor.

Turbiville's amendment wiped out that language. The committee's final vote Friday took out the entire bill.

The committee's rejection of the increase to $5 for video lottery came less than 24 hours after the House had given final approval Thursday to increasing the Deadwood casinos bet limit to $1,000 from the current $100.

The $1,000 Deadwood limit also would apply at tribal casinos throughout South Dakota if Gov. Dennis Daugaard signs that legislation into law.

Larry Mann, representing the Video Lottery Establishments of South Dakota Association, told the House committee Friday that about 300 of approximately 9,000 video terminals currently in play could accept the $5 limit.

He said the conversion to $5 would be "very slow" as more new machines are put into place. Several other lobbyists representing video lottery-associated businesses also testified in favor.

Mann said there is a need to look for ways to offset the decline in play since the smoking ban took effect in November 2010, as well as to replace old equipment. "We've got machines that aren't going to last," he said.

Opponents were ready Friday.

"With all due respect, this bill goes from bad to worse," Dale Bartscher, representing the Family Heritage Alliance, said about the $5 amendment. "This bill if enacted is an expansion of gaming in our great state."

Bartscher asked the House committee to recognize the difference between what he described as convenience gambling with video lottery and destination gambling at Deadwood.

Several other opponents testified. "It's a step in the wrong direction," Matt McCaulley said on behalf of the South Dakota Family Policy Council.

During the question period, Rep. Gene Abdallah said repeatedly that some establishments have 20 machines now. Abdallah, R-Sioux Falls, was a co-sponsor of both pieces of video lottery legislation. He used the 20 number in challenging the testimony of Bartscher.

Later, Rep. Peggy Gibson, DHuron, quizzed Mann about that point.

"There may be 20 machines in one building. There may be two licenses in that building," Mann explained.