PIERRE, S.D. (KELO) — State law has prohibited play on video lottery terminals between 2 a.m. and 7 a.m. local time ever since the South Dakota Legislature legalized that type of gambling in 1989. That’s because video lottery can be played only in bars and restaurants licensed to sell alcohol, and alcohol can’t be sold during those hours.
Nonetheless, the South Dakota Lottery received occasional complaints that people were gambling on video lottery terminals during that five-hour window and that people had trouble collecting on tickets that they didn’t try to cash until the next day or after. Now, some 36 years later, the South Dakota Lottery is working on a way to make sure there’s no way to get around it.
Lottery staff are currently running tests with the cooperation of 10 establishments — five in the Central Time Zone and five in the Mountain Time Zone — on a software program that shuts all terminals off each night at 2 a.m. local time and turns them back on again at 7 a.m.
The South Dakota Lottery Commission received a briefing about the project on Wednesday from Trevor Wiebe, the director for video lottery security and integrity. He said the testing began last week and is scheduled to run through July 4.
So far, everything seems to be working, Wiebe told commissioners. “We have had no calls no issues, no complaints about machines not being able to be played,” he said. ”The good thing is they’re coming back up again on time.”
Wiebe said that the software allows bonus-round play to continue past 2 a.m., but the terminal then shuts down as soon as the bonus play has been completed and the terminal’s payment voucher is generated for the player.
State government splits net machine income — the money that video-lottery players lose or leave behind — with the private owners of the machines. The latest South Dakota Lottery estimates have video lottery generating nearly $165 million in state revenue during the current budget year that ends June 30, while jackpot lotto sales are projected to net nearly $7.8 million and instant scratch-ticket sales produce around $6.8 million.
That estimated total of $179.6 million from lottery gambling is down from the nearly $183.7 million realized in fiscal 2024. Those amounts were video $163.9 million; lotto $12.53 million; and instant $7.26 million.
Wiebe said South Dakota currently has 1,397 video-lottery establishments, an increase of nine from 2024, and 11,209 video-lottery terminals, a 242 increase.
The commission on Wednesday adopted a new video-lottery policy that was developed in consultation with people from video-lottery businesses. Commissioner Jamie Huizenga of Pierre said he appreciated that the stakeholders were involved in developing the process.
“We didn’t want this to be the heavy hand of government saying this is the way it’s going to be,” Huizenga said. “You’re going to have a better product if you have more influencers.”
Matt Krogman of Brookings, representing the South Dakota Licensed Beverage Dealers and Gaming Association, thanked the lottery staff for including some of the group. “Our members obviously want to follow the law,” Krogman said, noting that the new policy provides “much more clarity.”
Deb Mortenson of Pierre, representing Music and Vending Association of South Dakota, said the MVA supports the proposal. “I think that this end document is going to be very helpful going forward,” she said.
Lottery Commission chair Steve Harding said the final version was an improvement from the first draft he saw. “It got polished better for everyone’s sake,” Harding said. “I think it’s a great document myself and worth the effort and time everyone put into it.”
