South Dakota Lottery new generation of video lottery out-produces ‘legacy’ machines

in Lottery

PIERRE | The new generation of video lottery terminals now produces more net machine income than the original terminals do, even though nearly twice as many old-style machines are still in the market, according to a South Dakota Lottery official.

The originals, known in the trade as legacy machines, have been holding “pretty steady” at $40 to $50 per day, while the new terminals are generating about $92, business analyst Sam Stanforth told members of state government’s Lottery Commission at their meeting Thursday.

July statistics on the lottery’s website showed 5,806 legacy terminals produced about $8.6 million of net machine income, while 3,310 new-generation terminals generated more than $9 million.

During fiscal 2017, which ended June 30, legacy machines netted more than $106 million. New-generation machines did $103 million. State government splits net machine income 50-50 with terminal owners.

The new style outpaced the old in April. The trend continued May, June and July.

“To me,” said Norm Lingle, the lottery’s executive director, that is “a pretty strong message right there.”

Lottery officials and quite a few commissioners tried for years to get establishments and other owners to convert to new technology.

Many of the legacy terminals are VLC 8700s that are still running after more than 20 years of players touching their screens.

At one point the commission even officially declared VLC’s technology obsolete because a bigger competitor absorbed the company.

The commission decision seemed to have little effect.

But the numbers confirm that minds have been gradually changing.

Stanforth said three manufacturers now let their numbers be on the lottery’s website and there’s a video lottery newsletter.

Jim Putnam of Armour, the commission chairman, said putting their information on the web was an issue some years ago.

“That’s now available to those who want to publish that,” Putnam said.

Lingle said it was a matter of finding a way around the state law that grants confidentiality.

“If the manufacturer agreed to it, we’d do it,” Lingle said. “This information is available, and we want it to be.”

Stanforth said there was growth year over year in 10 months of fiscal 2017, which he described as “good,” and “retraction” in October and February.

State revenue from video lottery went up 2.1 percent in fiscal 2017, reaching $105.1 million. “It’s just kind of a steady, even growth pattern,” Lingle said.

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