Bob Mercer sat in on Thursday’s meeting of the South Dakota Lottery Commission and learned that the new Hard Rock Casino in Sioux City kept video lottery growth in North Sioux City flat while video lottery revenues across the rest of the state increased 8.2%. Nertz.
Mercer also caught these numbers (and thank goodness he did, since the Lottery Commission doesn’t post their meeting documents in a timely fashion—what do we pay you guys for?) on the Net Machine Income (NMI) from video lottery in the first half of this fiscal year (July through December 2015) from the top ten towns for video lottery:
| City | NMI (millions) | population (2014) | NMI/pop |
| Sioux Falls | 26.31 | 168,586 | $156.06 |
| Rapid City | 12.87 | 72,638 | $177.18 |
| North Sioux City | 5.73 | 2,636 | $2,173.75 |
| Aberdeen | 5.71 | 27,800 | $205.40 |
| Yankton | 3.94 | 14,552 | $270.75 |
| Watertown | 3.42 | 22,057 | $155.05 |
| Mitchell | 3.16 | 15,693 | $201.36 |
| Huron | 3.07 | 13,163 | $233.23 |
| Pierre | 2.94 | 14,054 | $209.19 |
| Brookings | 1.97 | 23,225 | $84.82 |
Even stymied by the new glitz and glam in Sioux City, North Sioux City still does more video lottery business than Aberdeen, a town ten times its size. But that high revenue generation per capita isn’t quite as big a deal when we consider that North Sioux City is a corner of a tri-state metro area that includes about 83,000 Sioux Citians and another 13,000 South Sioux Citians.
Removing the North Sioux City anomaly, we can see that the our non-Interstate big towns produce more NMI per capita than our big towns lucky enough to have I-90 and I-29 exits. Over the last six months, Yankton generated $271 in video lottery revenue per resident. Huron, Pierre, and Aberdeen all generated more NMI per person than Mitchell, Rapid City, Sioux Falls, Watertown, and Brookings.
Those top ten towns generated just over two thirds of all video lottery revenue for the state over the last six months. Mercer says total NMI from July through December 2015 was $101.93 million. That would translate to $204 million for the full fiscal year. The state takes only fifty percent of the cash players lose, so really citizens are chunking money into video lottery at a rate of $102 million per year.
Recall that video lottery takes in another $440 million that it pays out in prizes, Again, I invite voters and legislators to consider how much South Dakota could afford to pay teachers if instead of getting folks to waste hundreds of millions of dollars on video lottery, we shut down those machines and simply levy some fair tax on all residents and visitors.
It’d be interesting to see the effect on the dollar amounts, if any, that Grand Falls Casino has had on Sioux Falls video lottery.
The Rapid City Journal is reporting this morning that Rep. Lance Russell (R-Hot Springs) will offer legislation that provides for lottery proceeds be used for state education as was the original intent of South Dakota gaming.
Hope you’re right, Roger, but I’ll believe it when I see it!