KOTA Territory NewsKOTA News EXTRA: 20 Years of Video Lottery - From Pariah to Fiscal Necessity?

KOTA News EXTRA: 20 Years of Video Lottery - From Pariah to Fiscal Necessity?

Shad Olson

October 16, 1989.  That's the day South Dakota initiated the very first video lottery in the nation.  Two decades later, it continues to grow.

With more than 9,000 machines at a thousand locations statewide, video lottery brings in more than a quarter-billion dollars a year and $100-million in revenue to the state, but at least one lawmaker says has gone from a protested pariah to a fiscal necessity. 

Former state lawmaker Bill Napoli was there soon after video lottery began; a moneymaking vice he says had it's roots in the loss of another: the end of 3-2 drinking laws that allowed 19-year olds to buy beer.  Frantic lawmakers scoured the legal and leadership landscape for a way to replace those lost dollars.

"Financially we were just in a real hurting way."  Napoli said.

From Pierre, he watched a growing budgetary dependence turned the lottery into an indispensable revenue source that opponents have tried and failed, time and again to disconnect.

South Dakota Family Policy Council spokesman, Dale Bartscher says the case against the lottery is simple.

"Video lottery exploits the poor." 

Efforts to repeal the lottery made the ballot in 1992, 2000 and 2006, fueled by people like Bartscher, infuriated by a legacy of addiction and related social costs, and scores of others who felt video lottery was conceived under a false promise of dedicated education funding that eventually found its way into the general fund.

Whether motivated by social concern, or broken promises, Napoli says every effort to scale back video lottery in South Dakota has been defeated.

"Total repeal efforts, partial repeal efforts, scaling back the licenses, rolling back the licenses, all of that has been done."

Still, in June of 1994, the machines did go dark  The South Dakota Supreme Court ruled the machines unconstitutional, but the reprieve was to prove temporary.  Napoli says it only took a few months of crunching the numbers to realize the hole was simply too big to fill.

"It was a really difficult time and I'm not sure that the legislature today is ready for that..."

Opponents still maintain the lottery is a predatory vice, a regressive tax on addicted people often too poor to afford their habit.

Or made poor because of it.

"Lost wives and girlfriends and homes and everything they have.."

Longtime lottery lobbyist Larry Mann says limiting the damage is simple.

"If you don't want to pay the tax, don't play the game."  Mann said.

To allow people with addicted personalities deprive the state of a viable and necessary revenue source, Mann says, would be to throw the proverbial baby out with the bathwater.

"People forget that it's put a billion dollars into the state in the past 20 years...and a lot of that has gone to local property tax relief."

And because of that, Napoli and others believe video lottery is here to stay....out of what napoli calls regrettable necessity.  And a changing moral climate that simply wouldn't warrant a viable challenge.

"Video lottery has been with us for so long, it's become such a part of South Dakota, especially the money, that i just don't believe it's ever going to go away."

Mann says the reasons for the lottery's longevity are as easy to understand as the bottom line.

"You have to remember it is our second largest source of revenue.  The state sales tax is number one and video lottery is number two."