S.D. Lottery changes rule on picking video winners that ex-lottery official wanted

Capitol News Bureau
KELO Pierre Capitol building legislature

PIERRE, S.D. (KELO) — Scott Henneman’s career in the gambling business came full circle Thursday, as he asked the South Dakota Lottery Commission for a new method to decide who wins at video lottery.

He was the only one to testify, on either side, and he got what he came for. The commission agreed to the change.

The new approach uses a random-number generator to pick from a field of predetermined outcomes. The traditional method will also continue on current machines of symbols or numbers randomly generated on three or more independent wheels inside the terminal.

You would need a long memory to remember Scott Henneman once served as an aide to then-Governor George S. Mickelson. Henneman helped Mickelson get the Legislature to legalize video lottery in 1989.

Later that year, Henneman was named director of operations at the South Dakota Lottery and oversaw the start of video lottery. In 1992 he crossed to the corporate side of gambling and began a decades-long run as an executive for several companies.

Now living in Omaha, Nebraska, he joined Grover Gaming in January as vice president of business development and human relations. He represented the North Carolina-based company Thursday before the South Dakota commission, seeking the change.

The lottery’s deputy director, Clark Hepper, presented it. “There will be no change to the player,” Hepper told commissioners. “It’s just a different way of showing the outcome of how the game is played.”

Currently each line machine has a random-number generator with three reels that independently spin, according to Hepper.

He said state law requires video lottery machines to award prizes on 80 to 95 percent of the money bet, but anything above 92 percent needs approval from the commission. Hepper said most machines are at 92 percent.

The change would add prize value to the winning equation, with 40 to 100,000 possible combinations. Hepper said one of those numbers would be randomly drawn each play, and the number would be re-inserted into the pool after each play.

“In the end, this is just another method to determine the outcome of the line-game play,” Hepper said. 

Henneman told commissioners that other states allow this feature. He said manufacturers previously used software that imitated mechanical reel-gaming devices.

“In essence it’s just another method to randomly determine outcomes,” Henneman said.  

No one submitted written comments.  

One of the commissioners, Brad Wheeler of Huron, questioned Hepper about how it works. Hepper said there’s one random-number selector in the background, rather than a minimum of three independent wheels spinning in the background.

“Ultimately this doesn’t change the percentage of win-loss that will occur?” Wheeler asked. “The player will not experience anything different,” Hepper replied.

There wasn’t any further discussion. Commissioners voted 5-0 to accept it.

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