SIOUX FALLS, S.D. (KELO) — This story has been updated with a correction regarding the original laws dealing with alcohol and video lottery.
On May 9, 2023, the owners of the Lucky Lady Casino, in Sioux Falls withdrew their request to renew a pair of malt beverage licenses for the establishment.
The business, which operated video lottery games, is now closed and had a troubled past, which likely contributed much to its closure. However, even if the location had been without controversy or issue, the decision to not renew alcohol licenses would have shuttered it anyway.
But why is this? Surely a video lottery casino (an industry which contributed over $161 million to state revenue in 2022) would not be dependent on alcohol sales to stay afloat. While this is likely true, a very specific pair of South Dakota law makes having video lottery without an alcohol license impossible.
The laws in question are SDCL 42-7A-37.1 and SDCL 42-7A-48.
42-7A-48, ‘Age limit and legal hours of operation for video lottery machines’ dates back to the 1989 legislative session.
The bill, then SB 129, was titled ‘An Act to authorize product diversification of the South Dakota
lottery, to offer video lottery games and to provide penalties for the violation thereof.’
This bill stipulated that no person under the age of 18 should be allowed to play video lottery, and that machines may not be played outside of the legal hours of operation of businesses licensed for the on-site sale of alcohol.
This was followed up in 1990 with a pair of bills, SB 86, which defined a video lottery ‘licensed establishment’ as one “licensed to sell alcoholic beverages for consumption upon the premises where sold,” and HB 1214, which raised the age to play video lottery to the age of 21.
42-7A-37.1 later amended the law, restricting the types of establishments to a bar or lounge — as opposed to a restaurant or hotel — and to state that any establishment which is licensed for video lottery must also be licensed for the sale, service or consumption of alcohol. In practice, what this means that you cannot operate a dry video lottery casino in South Dakota.
This dates back to 1992, when HB 1315 was introduced, entitled ‘video lottery establishment must be licensed to sell alcohol,’ serving as ‘An Act to revise the definition of a licensed video lottery establishment.’
Now state law, the statute reads in part:
A business licensed pursuant to subdivisions 35-4-2(12) and (16) may not be a licensed establishment for video lottery placement pursuant to subdivision 42-7A-1(6) unless it is a bar or lounge. For the purposes of this section, a bar or lounge is an enterprise primarily maintained and operated for the selling, dispensing, and consumption of alcoholic beverages on the premises and may also include the sale and service of food.
42-7A-37.1
The law goes on to describe physical specifications for bars and lounges, as well as implementation dates.
