The state House of Representatives gave final legislative approval to the change Thursday, after lawmakers argued yet another chapter in the 30-year-old debate about how far legalized gambling should be allowed to go.
The proposal came from the state Lottery Commission, whose members are appointed by the governor.
“Win, lose or draw, it’s going to make more money for gambling. That’s the bottom line,” said Rep. Dan Kopp, R-Rapid City. He voted against it.
That is the point, said Rep. Dick Werner, R-Huron. He said the penny will allow South Dakota to be attractive for manufacturers of gambling terminals so that products can be offered.
“We’re trying to keep the games fresh and entertaining,” Werner said.
State government receives half of the money lost by players in the privately owned machines. Revenue plummeted after voters upheld the smoking ban three years ago. The state’s share peaked at $112 million during the 2008 fiscal year. It is estimated this year to be $95 million.
More than one dozen legislators traded arguments Wednesday about whether adding the penny credit would be an expansion of gambling. The vote ultimately came down 39-28 in favor.
Werner said adding the penny credit doesn’t expand gambling because the maximum prize stays at $1,000.
“This is one penny, one penny. This is not about expansion of gambling,” Werner said.
Rep. Mike Verchio, R-Hill City, opposed the change, saying it could encourage “Granny” to gamble.
A similar argument came from Rep. Steve Hickey, R-Sioux Falls, who said the penny bet could entice more people.
“I look forward to the day we’re not dependent on it. We absolutely are right now,” Hickey said.
Video gambling terminals operate on credits purchased when players insert money. The credit amounts currently are 5 cents, 10 cents and 25 cents. A maximum bet of $2 is allowed.
Players who want to cash out receive paper slips showing the amount of the remaining credits. The establishments then pay off the slips in cash.
Rep. Roger Solum, R-Watertown, said the penny gives “Granny” a choice to bet a lesser amount.
“No, it’s not an expansion,” he said.
That didn’t convince Rep. Manny Steele, R-Sioux Falls. He said the fact that video gambling businesses support the change is telling.
“It appears to me there apparently will be revenue raised by this or they wouldn’t be for it,” Steele said. “I believe this does expand it.”
Rep. Marc Feinstein, D-Sioux Falls, asked whether a player will be able to put a single penny into a machine.
“No, they will not,” Werner replied. “The new machines won’t accept anything but currency.” He added, “You can play a penny once you put it (a bill) in.”
Feinstein said if that’s the case he can agree it’s not expansion.
Rep. Jim Peterson, D-Revillo, said the Lottery Commission members are trying to “make a partnership with the businesses that are providing this service to us, and it is a service.”
“I know there is opposition to gambling. But don’t make this a referendum on gambling,” Peterson said.
Peterson said an establishment is still limited to 10 machines.
Legislators shouldn’t confuse the issue, said Rep. Charlie Hoffman, R-Eureka. He said a bill to allow more machines last year was killed, while an increase to $1,000 for the bet limit passed, and those were expansions.
Hoffman said he has “a hard time wrapping my mind around” how allowing penny bets is an expansion.
“Gambling is made primarily to lose,” Rep. Scott Craig, R-Rapid City, said.
While he accepts that people can choose to lose their money, he said he doesn’t like state government gaining from their losing.
Rep. Isaac Latterell, R-Tea, said the penny will allow new games into South Dakota and therefore opposing the penny can keep them out.
Some people will still lose their paychecks regardless whether the penny bet becomes legal, Rep. Tim Rounds, R-Pierre, said.
“We’re not voting up and down on gambling. If we did that, we’d have to talk about the stock market,” he said.