Rookie Representative Carl Perry (R-3/Aberdeen) said at least week’s Aberdeen crackerbarrel that we’d see some video lottery legislation. This week he signed on as co-sponsor to two bills by Representative John Mills (R-4/Volga) aimed ultimately at kicking our state’s addiction to video lottery.
House Bill 1252 increases the state share of net video lottery machine proceeds from 50% to 55% in Fiscal Year 2020 (starting July 1 this year), 60% in FY2021, and 65% in FY2022.
But fascinatingly, HB 1252 doesn’t spend all of this extra money. It continues to transfer 0.5% of the state’s take into the video lottery operating fund. It caps the amount transferred to the general fund in FY2020 at $109,950,000, just a touch more than the $109.2 million reported in FY2018, but 4% less than Governor Noem’s budget estimates will come in under the 50% take in FY2020.
Then each year HB 1252 lowers that cap to 95% of the previous year’s cap.
Given those decreasing caps, the increasing state share, and the Noem budget assumption of 2.5% annual growth in video lottery revenue, Mills and Perry would reduce video lottery’s support of the general fund to $99.2 million in FY 2022 and sock away over the next three fiscal years $109.5 million.
But they don’t spend that $109.5 million. They lock it up in a new fund HB 1252 calls the “video lottery repeal and recovery fund.” HB 1252 prohibits spending any of that fund “until the playing of video lottery machines in this state is prohibited.”
That’s brilliant.
With increasing deposits every year earning interest, absent achieving its goal of repeal, I conservatively estimate the video lottery repeal and recovery fund could have over one billion dollars in it by FY2031.
Of course, that’s assuming House Bill 1253 doesn’t put a huge dent in video lottery. Mills’s other gambling bill. HB 1253 requires the South Dakota Lottery to report how much it spends each year on direct and indirect marketing, promotions, and other advertising, then grant 10% of that amount to the Department of Social Services each year to advertise the negative impacts of compulsive gambling from February 15 through May 1.
Neither bill has been assigned a committee hearing yet, but expect yowling from both the industry and the Noem Administration about this slow-burn effort to repeal video lottery.
Wow, these Bill’s sound like they are well thought out. With an admirable goal in mind. Thank you Carl Perry for signing on.
The lotteries are but a tax on the math impaired. You can’t protect stupid people from themselves so the rest of you fellows might as well get richer. grudznick is fine but I’d accept a free breakfast when you can sport your way to it. But I’ll be ok.
grudznick is correct. Lotteries are a sucker bet. Much like betting a parlay in sports. The most fun (because you often win, if you research) betting is on sports, like the Super Bowl and it’s hundreds of ancillary bets. (You can bet $5.00 on who will throw the first interception, etc.) SD legislature should authorize the casinos to offer online betting anywhere in the state. Same cut for the state with nearly zero capital expenditure, except for the casinos paying the company in Vegas that sets the line.
Interesting that we can’t just bite the bullet and post a bill that repeals video lottery. I understand the need for a soft landing… though notice that HB 1252 achieves that soft landing by squeezing gamblers for even more money for 10–15 years and investing their money into a trust fund of sorts. Even post repeal, we’d be relying on money taken via gambling.
I wonder if how many votes HB 1252 will get now but would lose if we added an actual repeal date or trigger, something like, “video lottery will be prohibited in South Dakota when the value of the Repeal and Recovery Fund reaches $2.4 billion” (or some other figure: I choose $2.4B because 5% of that would be $120M, enough to replace video lottery revenues each year, but less than what I would hope would be 7% annual return from smart investing, meaning we’d only be withdrawing interest, never principal).
Cory, my man. Gambling is like cable TV. If you have an aversion and choose not to buy it, why wouldn’t you allow others to make their own choice? Hmmmm? I assert, cable TV is every bit as addicting as gambling and there’s a long list of cable TV’s negative attributes.
Yeah, Porter, but MidCo will never let us run ads about the negative effects of cable addiction.
Cory, you’re itemizing the argument. Do you believe people should have a choice about whether to choose to gamble. Or, should the opportunity to choose be removed? (the second choice is a bit German, for me)
Repeal video lottery and take a $100 million cut for the schools. Of course the laws say we must pay teachers some amount. So I guess all you instate fellows get more property tax. Let us be real Mr. H. Put that beard and brain to a pencil and math this out for us. It could be a whole blogging or maybe a law bill for Mr. Novstrup to champion for you. Or maybe Mr. Sutton if he garnishes up enough money from his perpetual begging to run for the legislatures again.
grudznick is just jealous because the out-of-staters on Cory’s blog are more intelligent, more proficient and much more influential lobbyists than he is (and we work for free). If he had ideas like ours (and could get a lasso around his Irish Curse) he wouldn’t have had to retire at age 55. Listen and learn, grudz. You’re still young enough for a comback as a “learned libbie”. SD’ers are very forgiving folk. Put that Bluejay/Husker education into something you can finally be proud of.
Bluejays? Do you mean Knights, Mr. Lansing?
No, sir Mr. g. I mean Creighton University Bluejays (a Jesuit/Catholic University in Omaha, Nebraska United States) where you were a political science major 1976-1978 after you were an O’Gorman Knight. 🐐🐐🐐
Gosh, grudzie. No wonder you’re a big bore hole man, huh? You studied molecular biology at Aspen State Teachers College and studied nuclear physics at Santa Monica College? You lived in my beautiful Colorado and my beloved California? You’ve failed to mention that. I guess trying to live the persona of an Irish Catholic cowboy doesn’t meld much with living in Aspen and Santa Monica. lol Tell us about it.
Mr. Lansing, my getting of your goats has your brain gone whacky. I have never said I was Irish or Catholic, in fact I have stated I am an anti-godder, like Mr. H. You are righter than right that Aspen is nice this time of year.
grudzie … What does what I know about you have to do with what you’ve said? You probably don’t go to mass every day, like your Dad but you’re still in the tribe. You’re a lobbyist, which is on the general honesty level with a used car salesman and a President from Jamaica, Queens NY. No offense, though. I consider you a friend and I’ll show up for breakfast, before you know it. Love your photography. We have that in common, for sure.
grudznick laughing
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Porter, like Rep. Mills and Rep. Perry, I believe the state should not rely on vice and socially harmful practices for its revenue. We should rely on sources of revenue paid by everyone in fair proportion to their ability to bear the burden of paying for civilized society. Raising money on gambling is more cheapskate regressivity.
#FacePalm
Cory,
I admire your optimism here, but I am going to look at this as a person who sees every glass as half empty and leaking like a sieve.
I have a better chance of being the sole winner of a $500 million Powerball jackpot with the purchase of a single ticket than South Dakota has of developing a state budget based “on sources of revenue paid by everyone in fair proportion to their ability to bear the burden of paying for civilized society.”
The state legislature is guilty of a multitude of sins, but being prodigal doesn’t make the top 10, so this money is going to have to be made up some way. The only funding source the legislature seems willing to support is a sales tax on everything including food.
So, help me out here. What’s the source of your optimism that this bill will not lead to more regressive taxes?
Addicts sit in casinos waiting, timing drinks so they can get on the roads and rush over to a breathalyzer center twice a day before closing, meanwhile gambling away their ENTIRE paychecks. Jackley didn’t understand addiction, craving and altered brain chemistry with 24/7 nor prosecutors nor public defenders nor judges, but Republican Rand Corp think tank (weapons industry) loved it. Rehabilitation of probationers? Switchingaddictions? Simple minds seeking simple solutions for complex problems. Addiction. Health care. Thanks for looking after the welfare of ill lcitizens. State collection agency? Why not, Eh Republicans? Sinister refusal to understand.