PIERRE, S.D. (KELO) — Expanding video lottery could generate additional revenue that could be used for property-tax relief, according to a lobbyist for South Dakota video-lottery businesses.
That’s the sales pitch made on Thursday to the South Dakota Lottery Commission by Matt Krogman representing the South Dakota Licensed Beverage Dealers and Gaming Association.
Krogman’s remarks came moments after commission member Tim Donahue of Sioux Falls suggested that video lottery is a reliable source of revenue for state government.
Earlier in the meeting, the lottery’s executive director, Norm Lingle, reviewed legislation from the 2025 session that could have affected lottery offerings.
Lingle said the lottery officially took no position on Senate Bill 205, which sought to allow licensed establishments to have up to 15 video lottery terminals rather than 10 that’s in current law.
The lottery also was officially neutral on Senate Bill 206, which sought to increase the bet limit to $4, double the current limit of $2.
The 15-machines proposal made it to the Senate floor, where it lost 15-20. The higher bet limit was killed 5-3 at its first Senate committee hearing.
Krogman told the commission that the licensed beverage dealers proposed both bills. “And it’s not an easy lift,” he said. “There are a lot of people who aren’t fans of gaming. We get that.”
He asked for the commission’s support. Data presented earlier in the meeting showed video lottery revenue had flattened out after unexpectedly spiking during the COVID-19 pandemic, when people had time on their hands and extra cash from the federal government in their pockets.
Krogman argued that flat revenue isn’t good for business. “Let us run our business like you would run your own business,” he said.
The purpose of the 15-machines bill was to get more terminals into businesses with sufficient customer traffic to support them, according to Krogman. Regarding the higher bet limit, he said that could be used to provide revenue that state government could use for property-tax relief.
Krogman noted that Gov. Larry Rhoden has told reporters that he’ll be bringing a concept to the Legislature’s special committee that will study property taxes ahead of the 2026 session. Rhoden hasn’t yet said what that concept might be.
“We could be part of that source,” Krogman said. He indicated that a higher bet limit for video lottery could generate tens of millions of dollars more for state government from the privately owned terminals.
Video lottery produced $164 million for state government in fiscal 2024 and, through February, was on track for $165.8 million in fiscal 2025, which ends on June 30. Krogman suggested that expansion could be hypothetically $200 million.
“You could call it a choice tax,” he told the commission, adding that expansion legislation will be attempted again in 2026.
KELOLAND News asked Gov. Rhoden’s office on Thursday afternoon for a response to Krogman’s comments. We’ll let you know when we hear back.
Contacted Friday, Krogman said he and his group haven’t had an opportunity to talk with the governor or his staff yet. “This has just been idea that has been sitting in my head for a while now and just thought I’d throw it out there,” Krogman said.
