PIERRE – A bill to repeal and fund a replacement for video lottery failed Friday in the House State Affairs Committee.
HB1250 would create a video lottery repeal and replacement fund while also raising the state percentage of the video lottery take from 50% to 55%. The state’s increased take would help start the fund which, according to the bill’s sponsor, Rep. John Mills, R-Volga, would provide enough money to help wean the state off the proceeds from video lottery in nine years.
“It just bugs me that we raise money off the addictions of people,” Mills said. “We’re weaning the state off the revenue and building a pool of revenue.”
Norman Woods of the Family Heritage Alliance said that 37% of the state’s revenue from gaming comes from problem gamblers. Woods recalled traveling out of state and telling someone he was from South Dakota. That person replied, “You guys are the ones with a casino on every corner.”
Matt Walz of Keystone Treatment Center said the center is the only one in the state with an inpatient program for gambling addicts. He said the average debt of an addict checking into the program is $250,000 with some owing as much as $1 million.
Opposing the bill was Mark Quazney of the S.D. Bureau of Finance and Management. He told the committee that passage of HB1250 would mean nine years of budget cuts or tax increases.
Quazney also noted that South Dakota voters have endorsed video lottery five times at the ballot box.
Bob Riter, representing the Music and Vending Association of South Dakota, reminded the committee that the state raised its share of video lottery proceeds from 36% to 50% in 1995.
There was a freeze in the growth of the industry after the state started taking a larger share of proceeds, Riter said. Those businesses persevered, Riter said, but “some of these locations, even now, are marginal at best. It is difficult for us to make it at 50 (percent).”
Riter said it would be impossible for businesses to get loans or retain employees if they knew that eventually video lottery was was going to be repealed.
Dick Tieszen, representing the Associated School Boards of South Dakota, said the Legislature has a constitutional obligation to see to the proper funding of education.
“I don’t see how it replaces the money,” Tieszen said the of the legislation. “We already are here begging every year.”
Rep. Steven Haugaard, R-Sioux Falls, said he found it “unconscionable” that the state Bureau of Finance and Management would advocate against the bill.
“We’re simply plugging into the pockets of those who can least afford it,” Haugaard said.
Rep. Jon Hansen, R-Dell Rapids, said he once worked in a restaurant that offered video lottery. “They never look at you,” Anderson said of the video lottery players. “It was the same people over and over again. We’re making millions of dollars off the backs of these people that are addicted.”
Rep. David Anderson, R-Hudson, said he was not comfortable with the legislation because of its revenue forecasts. The state has a tough enough time forecasting revenue for the next 18 months, Anderson said.
“Here we’re trying to rely on a 25-year forecast,” said Anderson, who noted that the last time video lottery was on the ballot, it earned 67% of the vote.
“Morality has to come from the people,” Anderson said. “We can’t force it down their throats.”
An initial vote by the committee was 6-5 in favor of the bill, but legislative rules say that in order to be endorsed by the committee, seven of the 13 members must vote for the bill. A second vote in the afternoon sent the bill to the 41st day, a tactic designed to kill legislation, on a vote of 8-4.
