Private video-gaming operators want more help from S.D. Lottery during weekends and holidays

Capitol News Bureau
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PIERRE, S.D. (KELO) — The head of a group representing South Dakota video-lottery operators said Thursday the state agency that regulates them should make more technical help available at times when it’s needed most.

Britt Bruner of Mitchell delivered the remarks to the South Dakota Lottery Commission. He is president for the Music and Vending Association of South Dakota.

South Dakota Lottery normally has staff available only from 9 a.m. to 11 a.m. on weekends and holidays. That’s when video-lottery establishments often are their busiest, according to Bruner.

He suggested the state agency look for ways to have technical staff be on-call longer and that they spend time in the field traveling with people from the private businesses that own the nearly 9,000 active terminals.

“We need to get our schedules meshed a little better if we can,” Bruner said. He added there needs to be a better understanding of how both sides do business.

More than 1,200 establishments with licenses to serve alcohol have the machines. People must be at least age 21 to have access or place bets on them.

Establishments, operators and owners keep 50 percent of the money people lose in the machines. State government takes the other half, with the lottery keeping 0.5 percent for operating costs and the other 49.5 percent going to the state general fund. The lottery sent a record amount of nearly $114 million to the state treasury in the budget year that ended June 30.

About 20 others from video-lottery businesses were in the audience as Bruner made his comments. They had just heard an update from the lottery’s deputy director, Clark Hepper, about the transition to a new central video-lottery tracking system. The conversion is scheduled to finish next December.

Hepper said the new video-lottery system contract with Scientific Games will run seven years, with a series of eight possible one-year extensions.

Each establishment will need to have a site controller purchased from the new contractor. Hepper said lottery officials negotiated an approximate $1,000 reduction in price for a site controller, down to $2,395.

Hepper said he expects to know next week when and where Scientific Games will host meetings with terminal owners, operators and establishments.

“I’ve got a lot of questions. Lots of people have a lot of questions,” the commission chairman, Bill Shorma of Dakota Dunes, said.

Hepper said lottery officials have been trying to work out an arrangement where Scientific Games would let businesses pay for site controllers over a period of months.

Bruner called the possibility of payments welcome news. “That’s a big nut to crack and any help we get on that will be very appreciated,” he said.

Bruner said there’s been some miscommunication regarding how much preparation businesses are supposed to do regarding installation of site controllers. They’re being charged $125 apiece for the work. “It’s just kind of raised the hair on the back of our necks what it’s all about,” he said.

He also suggested the commission look at pro-rating the $100 annual licensing fee per machine for operators, so the total wasn’t due in one sum. State law sets video-lottery licensing fees.

Chairman Shorma said he wants answers from Scientific Games before the commission’s next quarterly meeting in March “so we can give you precise answers.”

“As commissioners, I think we have the same void of information as the operators do,” Shorma said. He said he takes “very seriously” the calls he gets from operators. Machines going out of service “should be dramatically reduced” with the new site controllers, he added. “That’s my expectation.”

Bruner said he understands the new technology should make operators’ lives easier. He said the big concern is smaller accounts are going to get pushed out — “Quite honestly we’ve got a lot of accounts that don’t make twenty-four hundred dollars a year” — and video lottery revenue overall could be negatively affected.

The commission also heard from Bryce Harms, with West Central Games in Watertown. Among his questions was why the new site controller won’t have an instant-redemption feature that would allow players to cash-out tickets at the machine rather than going to the counter to get the payment.

“That’s a pretty additional significant cost if you put one at each establishment,” Lingle told Harms. Lingle said those type of discussions should occur at the coming meetings with Scientific Games personnel. 

Shorma said he’s seen and used the instant-payback machines outside South Dakota. He said each machine needs to be stocked with cash. 

Harms said his tech staffers get frustrated when they call the lottery agency on weekend afternoons and people aren’t there available to help. Harms said he doesn’t have any locations open before 11 a.m. on weekends.

“Basically it takes half of the play time out of the machines,” Harms said. “Any help we can get out of that is greatly appreciated.”

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