PIERRE, SD -- The South Dakota Lottery Commission voted unanimously on March 25 for a rule change that will allow operators to add new, slot-style games to the state's 9,156 video lottery terminals.
For the first decade of operation, the state's VLTs offered only poker, blackjack, keno and bingo. Supporters said "line" and slot-style gameplay were technically authorized already, but that no precise regulations to implement their operation had been adopted until now.
Opponents said there is no constitutional authorization for slot machines in non-casino locations and that operating them may lead to court challenges by Deadwood casinos, among other interests.
Larry Mann, a lobbyist for the South Dakota Music and Vending Association, said new games could help operators recover some of the revenues lost due to the state's new smoking ban. VLT revenues dropped 16% in the first four months after the ban took full effect, compared with the same period a year ago. Some locations said revenues fell as much as 42% since the ban took effect.
Operators have said the ban, expanded in 2009 to cover locations that serve alcohol, will cost South Dakota $20 million in annual tax revenues due to lower customer traffic and smaller collections in VLT locations.
A legislative committee would have to sign off on the VLT game menu expansion before the new rules take effect. Game manufacturers will then submit new games to state regulators for approval prior to deployment.