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Video lottery revenues rebound, but only after taking heavy hit

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Video lottery revenues rebound, but only after taking heavy hit

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    Cutline: Despite accounting for slightly more than 40 percent of the state’s video lottery machines, new terminals produced more cash and net machine income than their legacy counterparts in 2018, helping boost video lottery revenues. Photo by Tom Griffith

 

Eight years after a smoking ban dealt South Dakota video lottery owners a heavy blow, the industry has quietly remade itself, last year recording nearly its highest revenue in 30 years.

 

The games brought in $221 million in fiscal 2018, substantially higher than the $176.6 million achieved at the industry's recent low point in 2012. The proceeds are divided evenly among the machine owners and the state.

 

Industry executives credit new games, updated gaming technology and more variety in entertainment options with the turnaround.

 

“A lot of that is the introduction of line game terminals, originally introduced in 2011,” said South Dakota Lottery Executive Director Norm Lingle, who has held his post since 2005. “As we have seen that consistent and steady growth and investment in the new terminals, that has probably been the largest factor in us achieving year-after-year growth.”

 

The gaming landscape has changed greatly since South Dakota first activated its video lottery system in 1989. Standalone casinos now are operating in neighboring states and a new casino is proposed for Yankton. An effort to allow sports betting in Deadwood is also underway. Even so, the state's most financially formidable gambling interest seems to have stabilized and, some proponents say, video lottery could be situated for even bigger growth if the state will allow it.

 

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