SIOUX FALLS, S.D. (KELO) — The discussion continues about video lottery in Sioux Falls and what the future may be for establishments wanting to add machines.

City council members Rich Merkouris and Greg Neitzert presented on the issue of alcohol and video lottery regulation at Tuesday’s informational meeting. They laid out what the guidelines are, the restrictions for licensed establishments, the issues they are seeing and plans for how they may move forward.

Merkouris and Neitzert say a 2019 ordinance allowed more leniency for how businesses with malt beverage and wine licenses could operate next to each other by sharing coolers and other spaces not accessible by the public. They say the ordinance has led to “unintended consequences” with lottery machines.

“What was intended was two licensed premises that each have 10 machines that could be placed next to each other, create safe travel for employees between each other. That’s expanded now to three to four to five different licensed premises,” Merkouris said.

Which they say has allowed establishments to have a separate malt beverage license for each suite or room all in one building attached by a doorway.

“So you have casinos that have four or five businesses on paper, but they’re really operating like a 40 or 50-machine casino, and you’re only allowed 10 machines per business and that’s a concern,” Neitzert said.

To have video lottery, you must have an alcohol license. They say the council can only regulate video lottery for malt beverage and wine establishments. They cannot regulate video lottery in places with a full liquor license.

According to their presentation, Sioux Falls has 12 casinos with liquor licenses. 121 have a malt beverage and wine license.

“When somebody walks from one room to another, they’ve now gone off-premise with alcohol, which is a violation of state law. And with these openings and doorways, it makes it far too easy for that to happen,” Neitzert said.

Now to decide what to do moving forward which could include a couple different options, for example:

1) Capping the amount of video lottery in the city (like other cities in South Dakota have done).
2) Making amends to the 2019 malt beverage ordinance.

“In terms of having solid walls, so that we don’t have alcohol moving between facilities and you can’t do thirty and forty machine casinos by simply splitting one tenant space into four rooms,” Neitzert said.

“There should be clarity and certainty regarding the regulation that we have, and I think that’s why we need to maybe strengthen some of this regulation so that there can be that clarity for the industry moving forward,” Merkouris said.

Neitzert and Merkouris say they have talked to owners of casinos and restaurants with video lottery about the regulations. They say that any new regulations or ordinance would NOT affect any establishments already operating.

There are 14 requests to add new video lottery machines at five different locations in Sioux Falls at the November 1 meeting.

To see the full presentation from the city council informational meeting Tuesday, click here.