- Associated Press - Thursday, February 20, 2014

PIERRE, S.D. (AP) - A bill intended to wean South Dakota government off video lottery revenue failed to pass the House Taxation Committee Thursday.

The panel voted 9-4 to kill the measure.

Supporters of the measure said video lottery has a high social cost in the state and revenues are dropping anyway. They said the bill would have helped decrease the state’s dependence on gambling.

Opponents to the bill said the measure would have directed funds away from schools.

The main sponsor, Rep. Steve Hickey, R-Sioux Falls, said the goal was to reduce dependence on revenue from the games before getting rid of them altogether. Supporters of the bill shared stories of crime and hardship that resulted from gambling.

“The state is addicted to video lottery revenue,” Hickey said. “We need to wean ourselves off of unhealthy, undependable revenue sources.”

The bill would essentially have created an endowment fund for the state over the next 10 to 20 years. The fund, part of the education trust fund, would have taken deposits in the years when general fund revenues increased by at least 4.5 percent.

Opponent Jim Terwilliger of the state’s Bureau of Finance and Management said, “it’s a significant, significant impact on the state budget for the next 10 to 20 years.”

Voters have shown support for video lottery, as recently as 2006, Terwilliger added.

Rep. Jim Peterson voted against the measure saying he didn’t want to draw funding away from current education needs.

Rep. David Novstrup, R-Aberdeen also opposed the bill. He said, “I don’t support video lottery. I would love to get rid of it. But I don’t view this as a solution.”

The Senate passed a different bill Wednesday to increase the number of video lottery machines allowed in licensed establishments. That measure will go on to the House.