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Rapid City Journal, Rapid City, Feb. 27, 2014

Approve adding more machines

South Dakota’s video lottery industry is leaking revenue just like Deadwood gaming, and, like Deadwood, the industry is looking for salvation in a couple of bills before the Legislature.

Last September, the state lottery commission heard a report that video lottery revenues had fallen by $48.3 million in the last five years to $176.4 million in net income in 2012. Because half the proceeds from video lottery terminals goes toward reducing property taxes that, in turn, help fund public education, the state is faced with cutting services or replacing revenue from other sources.

The commission recommended changing the 50-50 split on net income on some machines and increasing the casino machine limit to 15 terminals from 10 machines.

This year’s Legislature considered three bills that could affect video lottery income.

- House Bill 1246 would have increased the bet limit from $2 to $5. The bill was defeated, 40-28, in the House of Representatives.

- Senate Bill 180 would increase the machine limit to 15 per casino, providing the machines are newer versions that get more play and more revenue. The bill passed the Senate, 20-12.

- A third bill targeting video lottery was introduced that offered the ambitious proposal of decreasing the state’s dependence on gambling revenue. House Bill 1227’s sponsor Rep. Steve Hickey, R-Sioux Falls, said the state was addicted to gambling revenue and video lottery can lead to crime and hardship from gambling losses. “We need to wean ourselves off unhealthy, undependable revenue sources,” he said.

The House Taxation Committee rejected the measure.

In 2006, voters rejected an initiated measure to repeal video lottery by a 2-to-1 margin. Until voters change their minds on video lottery, the Legislature should leave it alone.

As to the measures to improve video lottery revenues: Increasing the bet limit was a bad idea. Video lottery is addicting enough to some players without adding the siren song of potentially higher payouts. We are glad to see the bill defeated.

SB 180 was a better plan to allow more machines as a way to enhance revenue, while providing an incentive for casino owners to modernize their machines. It is our view that SB 180 should be passed by the Legislature.

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Yankton Daily Press and Dakotan, Yankton, Feb. 25, 2014

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