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CHAPTER 42-7A

STATE LOTTERY

42-7A-1    Definitions.

42-7A-2    South Dakota Lottery established--Administration by executive director--Overall control and operation of games.

42-7A-3    Executive director--Salary--Employment of personnel.

42-7A-4    Functions of executive director.

42-7A-5    Competitive bidding required before entering into contracts.

42-7A-6    Investigation of vendors.

42-7A-7    Subpoenas--Order to comply--Punishment by contempt.

42-7A-8    Additional functions of executive director.

42-7A-9    Lottery expenses and prizes to be paid from lottery funds--General funds not to be used or obligated--Exception.

42-7A-10    Selection of lottery retailers.

42-7A-11    Lottery retailers application fee--Annual renewal of contracts--Contracts not transferable or assignable.

42-7A-12    Issuance of lottery retailer certificate--Display--Sales only at location on certificate.

42-7A-13    Qualifications of lottery retailer.

42-7A-14    Persons ineligible to be licensed by the lottery--Criminal background investigation of applicants, licensees, vendors, and employees.

42-7A-15    Partnership as lottery retailer or video lottery machine operator.

42-7A-16    Association or corporation as lottery retailer or video lottery machine operator.

42-7A-17    Lottery Commission created--Appointment of members--Term of office--Qualifications--Chair.

42-7A-18    Meetings--Quorum.

42-7A-19    Commission to establish lottery operation policy--Approval of major procurements.

42-7A-19.1    Sale of lottery products within exterior boundaries of Indian reservations.

42-7A-20    Mileage and per diem paid commission members--Exception.

42-7A-21    Rules and regulations.

42-7A-22    Lottery operating fund--Continuous appropriation--Informational budget--Disbursements.

42-7A-23    Amount from sale of tickets allocated for payment of prizes--Means of payment for prizes.

42-7A-24    Transfer of net proceeds to state funds.

42-7A-24.1    Acceptance and expenditure of funds obtained from federal sources, gifts, contributions and other sources.

42-7A-24.2    Payment of expenditures.

42-7A-25    Employment and direction of investigative personnel.

42-7A-26    Appointment of assistant attorney general to assist in enforcement.

42-7A-27    Commission members or lottery employees not to have interest in lottery contracts or to accept gifts or loans from persons or businesses contracting with lottery--Violation as misdemeanor.

42-7A-28    Persons contracting to supply materials, tickets or consulting services not to give gifts or loans to commission members or lottery employees--Violation as misdemeanor.

42-7A-29    Removal from office for violation of conflict of interest provisions--Application of other conflict of interest statutes.

42-7A-30    Counterfeiting lottery tickets Class 6 felony.

42-7A-31    Sale of tickets at price greater than that fixed by rules prohibited--Sale by authorized retailer only--Violation.

42-7A-32    Sale of ticket to person under eighteen prohibited--Violation--Gift of ticket to person under eighteen permitted--Prize paid to parent or guardian.

42-7A-33    Purchase of ticket or payment of prize to certain persons prohibited--Exceptions.

42-7A-34    Prize paid to holder of winning ticket--Deceased winner's prize paid to representative--Right to prize nonassignable--Prizes subject to taxation--Disposition of unclaimed prize--Liability of lottery after payment of prize.

42-7A-35    42-7A-35. Repealed by SL 1989, ch 371, § 2

42-7A-36    Certain mechanical or electronic devices prohibited--Violation as felony--Devices as nuisances.

42-7A-37    Requirements for licensed video lottery machines.

42-7A-37.1    Restrictions on licensed establishment.

42-7A-38    Limit on amount played and awards given.

42-7A-39    Display of license for video lottery machine--Confiscation--Violation as felony.

42-7A-40    Examination of video lottery machines--Costs paid by manufacturer--Contract for examination.

42-7A-41    Video lottery machine manufacturer, distributor, operator, and establishment licenses required--Fees.

42-7A-41.1    Video lottery operating fund established.

42-7A-41.2    Posting video lottery odds required.

42-7A-42    Multiple types of licenses prohibited.

42-7A-43    Background investigation of video lottery licensees--Eligibility requirements.

42-7A-44    Rules for placement of video lottery machines--Number limited--Placement in bar or lounge with on-sale license.

42-7A-44.1    Denial or revocation of license for noncompliance.

42-7A-45    Video lottery machine income--Remittance to state--False report as felony--Records--Penalty.

42-7A-46    Tampering with video lottery machine as misdemeanor.

42-7A-47    Manipulating outcome, payoff, or operation of video lottery machine as felony.

42-7A-48    Age limit and legal hours of operation for video lottery machines.

42-7A-49    Lottery products on Indian reservations authorized.

42-7A-50    Confidentiality of lottery records.

42-7A-51    Lottery setoff program established--Computerized file of persons owing state.

42-7A-52    Debt setoff from prize due--Notice of right to appeal--Time limitation--Transfer of setoff amount to agency.

42-7A-53    Commission, employees, and lottery discharged from liability.

42-7A-54    Apportionment of prize among agencies--Priority of child support payments.

42-7A-55    Collection of remainder of debt.

42-7A-56    Public policy declared.

42-7A-57    Approval or disapproval of license applications.

42-7A-58    Reapplication for license after denial or revocation.

42-7A-59    False statements in license applications--Perjury.

42-7A-60    Executive or closed meetings permitted.

42-7A-61    42-7A-61. Repealed by SL 2013, ch 219, § 10.

42-7A-62    Collection of fee--Deposit in general fund.

42-7A-63    State's percentage of net machine income--Deposit into general fund and video lottery operating fund.

42-7A-64    Additional criteria for on-sale alcoholic beverage licensees in video lottery licensed establishments.

42-7A-65    42-7A-65. Repealed by SL 2013, ch 219, § 11.


42-7A-1Definitions.

Terms used in this chapter mean:

(1)    "Associated equipment," any proprietary device, machine, or part used in the manufacture or maintenance of a video lottery machine, including integrated circuit chips, printed wired assembly, printed wired boards, printing mechanisms, video display monitors, and metering devices;

(2)    "Commission," the South Dakota Lottery Commission;

(3)    "Credit," one, five, ten, or twenty-five cents;

(4)    "Executive director," the executive director of the South Dakota Lottery;

(5)    "Instant lottery," a game that offers preprinted tickets that indicate immediately or in a grand prize drawing whether the player has won a prize;

(6)    "Licensed establishment," a bar or lounge owned or managed by an individual, partnership, corporation, or association licensed to sell alcoholic beverages for consumption upon the premises where sold;

(7)    "Lottery" or "state lottery," any lottery operated pursuant to this chapter;

(8)    "Lottery retailer," any person with whom the South Dakota Lottery has contracted to sell lottery tickets to the public;

(9)    "Lottery vendor" or "vendor," any person who has entered into a major procurement contract with the South Dakota Lottery;

(10)    "Major procurement," any contract with any vendor directly involved in providing facilities, equipment, tickets, and services unique to the lottery, but not including materials, supplies, equipment, and services common to the ordinary operations of state agencies;

(11)    "Net machine income," money put into a video lottery machine minus credits paid out in cash;

(12)    "On-line lottery," a game linked to a central computer via a telecommunications network in which the player selects a specified group of numbers or symbols out of a predetermined range of numbers or symbols as approved by the commission;

(13)    "South Dakota Lottery," the state agency created by this chapter to operate a lottery pursuant to this chapter;

(14)    "Ticket," any tangible evidence issued or authorized by the South Dakota Lottery to prove participation in an instant, on-line, or video lottery game;

(14A)    "Video lottery," any video game of chance played on video lottery machines;

(15)    "Video lottery machine distributor," any individual, entity, partnership, corporation, or association that distributes or sells video lottery machines or associated equipment in this state;

(16)    "Video lottery machine manufacturer," any individual, entity, partnership, corporation, or association that assembles or produces video lottery machines or associated equipment for sale or use in this state;

(17)    "Video lottery machine operator," any individual, entity, partnership, corporation, or association that places video lottery machines or associated equipment for public use in this state; and

(18)    "Video lottery machines," or "machine," any electronic video game machine that, upon insertion of cash, is available to play or simulate the play of a video game, including video poker, keno, and blackjack, authorized by the commission utilizing a video display and microprocessors in which, by chance, the player may receive free games or credits that can be redeemed for cash. The term does not include a machine that directly dispenses coins, cash, or tokens.

Source: SL 1987, ch 313, § 1; SL 1989, ch 368, § 1; SL 1990, ch 341, § 1; SL 1991, ch 351, § 1; SL 1992, ch 304, § 1; SL 1995, ch 242; SL 2013, ch 219, § 1.


42-7A-2South Dakota Lottery established--Administration by executive director--Overall control and operation of games.

There is hereby established in the Department of Revenue a division to be called the South Dakota Lottery under the direction of the South Dakota Lottery Commission. Under the supervision of the commission, an executive director shall administer the state lottery as provided in this chapter. In all decisions, the executive director and commission shall take into account the particularly sensitive nature of the lottery, and shall act to promote and ensure the integrity, security, honesty, and fairness of its operation and administration. The overall management of the state lottery and control over the operation of its games shall rest solely with the South Dakota Lottery.

Source: SL 1987, ch 313, § 2; SL 1993, ch 317, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 115; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.


42-7A-3Executive director--Salary--Employment of personnel.

The executive director shall be the secretary of revenue or his designee. The executive director shall be exempt from the South Dakota Career Service Act and shall receive an annual salary fixed by the Governor. The executive director may employ such persons as may be necessary to operate the South Dakota Lottery.

Source: SL 1987, ch 313, § 3; SL 1989, ch 368, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 116; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.


42-7A-4Functions of executive director.

The executive director may, subject to policy established by the commission:

(1)    Supervise and administer the operation of the state lottery in accordance with the provisions of this chapter;

(2)    Employ all other employees of the South Dakota Lottery;

(3)    Enter into contracts for promotional services; annuities or other methods deemed appropriate for the payment of prizes; data processing and other technical products, equipment and services; and facilities as needed to operate the South Dakota Lottery including, without limitation, tickets and other services involved in major procurements;

(4)    Contract with and license persons for the sale of lottery tickets and the offering of video lottery games to the public, as provided by this chapter and rules adopted pursuant thereto;

(5)    Make demographic studies of lottery players and studies of reactions of citizens to existing and potential features of the lottery;

(6)    Require lottery retailers and persons licensed pursuant to this chapter to furnish proof of financial stability or furnish surety in an amount based upon the expected volume of sales of lottery tickets or net machine income;

(7)    Provide for secure facilities to house the South Dakota Lottery;

(8)    Provide for separate, distinct, and secure data processing facilities to be used for the reliable operation of the state lottery;

(9)    Examine, or cause to be examined by any agent or representative designated by the executive director, any books, papers, records, or memoranda of any lottery retailer or person licensed pursuant to this chapter for the purpose of ascertaining compliance with any provision of this chapter or any rule adopted pursuant to this chapter;

(10)    Issue subpoenas to compel access to or for the production of such books, papers, records, or memoranda in the custody or control of any lottery retailer or person licensed pursuant to this chapter, or to compel the appearance of any of their employees, for the purpose of ascertaining compliance with any provision of this chapter or any rule adopted pursuant to this chapter;

(11)    Administer oaths and take depositions to the same extent and subject to the same limitations as would apply if the deposition was in aid of a civil action in the circuit court;

(11A)    The lottery commission shall operate a video lottery undertaken pursuant to this chapter and may not contract or assign this responsibility to any other person;

(12)    Impose civil fines not to exceed ten thousand dollars per violation and fifteen thousand dollars for any subsequent violation of any provision of this chapter or any rule adopted pursuant to this chapter; and

(13)    Enter into written agreements or compacts with one or more other states for the operation, marketing and promotion of a joint lottery or joint lottery games.

Source: SL 1987, ch 313, § 4; SL 1989, ch 368, § 3; SL 1990, ch 341, § 2.


42-7A-5Competitive bidding required before entering into contracts.

If entering into any contract pursuant to subdivision 42-7A-4(3), the executive director shall utilize an open and competitive bid process which reflects the best interest of the State of South Dakota. Any such contract is exempt from the provisions of chapters 5-18A and 5-18D. The executive director shall consider all relevant factors including security, competence, experience, timely performance, and maximization of net revenues to the state. Any contract entered into pursuant to subdivision 42-7A-4(3) for major procurements are subject to the approval of the commission and are subject to the provisions of chapters 5-18A and 5-18D.

Source: SL 1987, ch 313, § 5; SL 1990, ch 341, § 3; SL 2011, ch 2, § 143.


42-7A-6Investigation of vendors.

Before a contract for a major procurement is awarded, the executive director shall conduct a thorough background investigation of the vendor, any parent or subsidiary corporation of the vendor, all shareholders of five percent or more interest in the vendor or parent or subsidiary corporation of the vendor, and all officers and directors of the vendor or parent or subsidiary corporation of the vendor to whom the contract is to be awarded. The vendor shall submit appropriate investigation authorizations to facilitate this investigation. The executive director may require any additional information from the vendor that is considered appropriate to preserve the integrity and security of the lottery.

Source: SL 1987, ch 313, § 6.


42-7A-7Subpoenas--Order to comply--Punishment by contempt.

Subpoenas issued under the provisions of subdivision 42-7A-4(10) may be served upon individuals, entities, or corporations in the manner provided in chapter 1-26 for the service of process by any officer authorized to serve subpoenas in civil actions or by the executive director or an agent or representative designated by the executive director. In the case of the refusal of any person to comply with any such subpoena, the executive director may make application to the circuit court of the county where such books, papers, records, memoranda, or person is located for an order to comply. Failure to obey such order to comply issued by a circuit court may be punished by the court as contempt.

Source: SL 1987, ch 313, § 7; SL 2013, ch 219, § 2.


42-7A-8Additional functions of executive director.

The executive director shall:

(1)    Make and keep books and records which accurately and fairly reflect each day's transactions, including the distribution and sale of tickets, receipt of funds, prize claims, prize disbursements, or prizes liable to be paid, expenses and other financial transactions of the South Dakota Lottery necessary so as to insure accountability;

(2)    Make annual financial reports to the commission, the Governor, the state treasurer, the attorney general, and the Legislature. Such reports shall be based upon generally accepted accounting principles and include a full and complete statement of the lottery's financial position and operations;

(3)    Make available for inspection by the commission, upon request, all books, records, files, and other information and documents of the South Dakota Lottery;

(4)    Have an annual audit of all accounts and transactions of the South Dakota Lottery pursuant to chapter 4-11. The audit report shall be presented to the commission, the Governor, the state treasurer, and the Legislature;

(5)    Contract with an agency of state government or an independent firm experienced in security procedures to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the South Dakota Lottery;

(6)    Prepare and submit budgets and proposals for the operation of the South Dakota Lottery;

(7)    Operate the state lottery so that after the initial funding, it is self-sustaining and self-funded;

(8)    Include in printed promotional materials and information published for each lottery game, a list of the odds of winning such game, based upon the number of tickets projected to be sold; and

(9)    Make provision for the timely and efficient transfer of funds due from lottery retailers and persons licensed pursuant to this chapter to the state general fund.

Source: SL 1987, ch 313, § 8; SL 1989, ch 368, § 4; SL 2013, ch 219, § 3.


42-7A-9Lottery expenses and prizes to be paid from lottery funds--General funds not to be used or obligated--Exception.

No claim for the payment of an expense of the lottery or the payment of a lottery prize may be made unless it is against the lottery operating fund or money collected from the sale of lottery tickets. Except for the initial start-up funding to the lottery, the general funds of the state may not be used or obligated to pay the expenses of the South Dakota Lottery or prizes of the lottery.

Source: SL 1987, ch 313, § 9.


42-7A-10Selection of lottery retailers.

The executive director shall select as lottery retailers such persons as he deems best able to serve the public convenience and promote the sale of tickets. In the selection of lottery retailers, the executive director shall consider factors such as financial responsibility, security of the applicant's place of business or activity, accessibility of the applicant's place of business or activity, integrity, reputation, sufficiency of existing lottery retailers to serve the public convenience, volume of expected sales, and such other factors as the executive director may deem appropriate. Any person lawfully engaged in nongovernmental business on state property may be selected as lottery retailers.

Source: SL 1987, ch 313, § 10.


42-7A-11Lottery retailers application fee--Annual renewal of contracts--Contracts not transferable or assignable.

The executive director may charge an application fee to persons applying to become lottery retailers. All lottery retailer contracts awarded by the South Dakota Lottery under this chapter are renewable annually after issuance unless sooner canceled or terminated. No lottery retailer contract awarded under this chapter is transferable or assignable.

Source: SL 1987, ch 313, § 11.


42-7A-12Issuance of lottery retailer certificate--Display--Sales only at location on certificate.

Each lottery retailer shall be issued a lottery retailer certificate which shall be conspicuously displayed at the place where the lottery retailer is authorized to sell lottery tickets. Lottery tickets may only be sold by the lottery retailer at the location stated on the lottery retailer certificate.

Source: SL 1987, ch 313, § 12.


42-7A-13Qualifications of lottery retailer.

To be selected as a lottery retailer or video lottery machine operator, a natural person acting as a sole proprietor shall:

(1)    Be at least eighteen years of age;

(2)    Be of good character and reputation;

(3)    Have sufficient financial resources to support the activities required to sell lottery tickets or place and service video lottery machines; and

(4)    Be current in payment of all taxes, interest, and penalties owed to the State of South Dakota, excluding items under formal dispute or appeal pursuant to applicable statutes.

A lottery retailer or video lottery machine operator may not be a lottery vendor or an employee or agent of any lottery vendor doing business with the South Dakota Lottery.

Source: SL 1987, ch 313, § 13; SL 1989, ch 368, § 5; SL 1993, ch 317, § 5.


42-7A-14Persons ineligible to be licensed by the lottery--Criminal background investigation of applicants, licensees, vendors, and employees.

No natural person may be licensed by the lottery or involved in lottery activities under this chapter, who:

(1)    Has been convicted of a felony in this or any other jurisdiction, unless at least ten years have passed since satisfactory completion of the sentence or probation imposed by the court in each felony conviction;

(2)    Has been found to have violated the provisions of this chapter or any rule adopted pursuant to this chapter;

(3)    Has been found to have a background, including a criminal record, reputation, habits, social or business associations, or prior activities that pose a threat to the public interests of the state or to the security and integrity of the lottery; create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gaming; or present questionable business practices and financial arrangements incidental to the conduct of lottery activities;

(4)    Is a member of the immediate family, as defined in § 42-7A-33, of an employee of the South Dakota Lottery or of a member of the South Dakota Lottery Commission; or

(5)    Has knowingly made a false statement of material fact to the South Dakota Lottery.

Each applicant, licensee, vendor, or employee of the South Dakota Lottery shall submit to a state and federal criminal background investigation by means of fingerprint checks by the Division of Criminal Investigation and the Federal Bureau of Investigation. The executive director shall submit completed fingerprint cards to the Division of Criminal Investigation for the applicant, licensee, vendor, or employee.

The South Dakota Lottery may pay any fee charged for the cost of fingerprinting or the criminal background investigation for any person whose employment is subject to the requirements of this section. Each applicant, licensee, or vendor is responsible for any fee charged for the cost of fingerprinting or the criminal background investigation.

Source: SL 1987, ch 313, § 14; SL 1989, ch 368, § 6; SL 1993, ch 317, § 6; SL 2017, ch 186, § 1.


42-7A-15Partnership as lottery retailer or video lottery machine operator.

For a partnership to be selected as a lottery retailer or video lottery machine operator, the partnership shall meet the requirements of subdivisions 42-7A-13(3) and (4), and each partner thereof shall meet the requirements of subdivisions 42-7A-13(1) and (2) and subdivisions 42-7A-14(1) to (5), inclusive.

Source: SL 1987, ch 313, § 15; SL 1989, ch 368, § 7.


42-7A-16Association or corporation as lottery retailer or video lottery machine operator.

For an association or corporation to be selected as a lottery retailer or video lottery machine operator, the association or corporation shall meet the requirements of subdivisions 42-7A-13(3) and (4), and each officer and director and each stockholder who owns five percent or more of the stock of such association or corporation shall meet the requirements of subdivisions 42-7A-13(1) and (2) and subdivisions 42-7A-14(1) to (5), inclusive.

Source: SL 1987, ch 313, § 16; SL 1989, ch 368, § 8; SL 1993, ch 317, § 7.


42-7A-17. Lottery Commission created--Appointment of members--Term of office--Qualifications--Chair.

There is created the South Dakota Lottery Commission, which is composed of five members appointed by the Governor and confirmed by the senate. The term of office is three years, expiring on January first with no more than two appointments expiring in any one year. No member may be appointed to more than two consecutive terms. Each member of the commission shall be a citizen of the United States and a resident of this state, not all of whom may be of the same political party. A chair of the commission shall be chosen annually from the membership of the commission by a majority of commission members at the first meeting of the commission each fiscal year.

Source: SL 1987, ch 313, § 17; SL 1989, ch 370; SL 2020, ch 189, § 1.


42-7A-18Meetings--Quorum.

The commission shall meet at least once a quarter and such additional meetings as the chair deems desirable. Special meetings may be called by the chair upon the written request of the executive director or any three members of the commission. All meetings shall be held at a place and time fixed by the chair. A majority of the duly appointed members of the commission constitutes a quorum to transact business.

Source: SL 1987, ch 313, § 18; SL 1996, ch 256.


42-7A-19Commission to establish lottery operation policy--Approval of major procurements.

The commission shall establish policy for the operation of the state lottery and shall consult with and direct the executive director relating to the operation of the state lottery. Major procurements, as defined in subdivision 42-7A-4(3), recommended by the executive director, are subject to the approval of the commission.

Source: SL 1987, ch 313, § 19.


42-7A-19.1Sale of lottery products within exterior boundaries of Indian reservations.

The commission may provide for the sale of lottery products within the exterior boundaries of any Indian reservation within this state. The commission may pay to the respective tribal government an amount not to exceed fifty percent of the state's net proceeds from lottery products sold within the exterior boundaries of any reservation. The commission shall consider any agreement or potential agreement made pursuant to the authority contained in the Federal Indian Gaming Act together with any other relevant factors, including tribal member and nonmember mix, in determining payment to be made to a tribe. The commission shall by rule, promulgated pursuant to chapter 1-26, establish the specific criteria to determine the amount of net proceeds distributed to each tribal government. Each reservation may only receive revenue pursuant to this chapter from lottery products sold within the exterior boundaries of such reservation. Transfers of net proceeds from the sale of any lottery product to tribal governments under this section shall be made each year pursuant to § 42-7A-24.

Source: SL 1989, ch 372, § 1.


42-7A-20Mileage and per diem paid commission members--Exception.

The members of the lottery commission shall be paid mileage at the same rate as allowed for state employees. The commission shall receive per diem compensation and allowable expense reimbursement in an amount set pursuant to § 4-7-10.4 for all time actually spent while attending commission meetings. However, no per diem may be paid to commission members who are state employees. The per diem shall be paid by vouchers duly verified and approved by the executive director of the lottery.

Source: SL 1987, ch 313, § 20.


42-7A-21Rules and regulations.

The commission shall promulgate rules pursuant to chapter 1-26 governing the establishment and operation of a state lottery as necessary to carry out the purposes of this chapter. The commission shall promulgate rules concerning the following:

(1)    The types of ticket lottery games to be conducted as authorized pursuant to this chapter;

(2)    The manner of selecting the winning tickets. However, if a lottery game utilizes a drawing of winning numbers, a drawing among entries, or a drawing among finalists, such drawings shall always be open to the public and shall be recorded on both video and audio tape;

(3)    The manner of payment of prizes to the holders of winning tickets;

(4)    The frequency of the drawings or selections of winning tickets;

(5)    The types of locations at which tickets may be sold;

(6)    The methods to be used in selling tickets;

(7)    Additional qualifications for the selection of lottery retailers, video lottery machine manufacturers, distributors, or operators and the amount of application fees to be paid by each;

(8)    The amount and method of compensation to be paid to lottery retailers, including special bonuses and incentives;

(9)    Deadlines for claims for prizes by winners of each lottery game. However, in no instance may such deadline be for more than one year;

(10)    The mechanical and electronic specifications for each video lottery machine. At a minimum, each video lottery machine shall meet the requirements of § 42-7A-37;

(11)    Machine security testing and inspection procedures;

(12)    Liability for machine malfunction;

(13)    Machine maintenance and repair;

(14)    Financial responsibility of persons licensed under this chapter;

(15)    Accounting procedures for net machine income;

(16)    Licensing procedures under this chapter; and

(17)    Such other matters necessary or desirable for the efficient or economical operation of the lottery or for the convenience of the public.

Source: SL 1987, ch 313, § 21; SL 1989, ch 368, § 9; SL 1991, ch 353, § 1; SL 1995, ch 243, § 1.


42-7A-22Lottery operating fund--Continuous appropriation--Informational budget--Disbursements.

There is established within the state treasury the lottery operating fund, into which shall be deposited all revenues from the sale of lottery tickets, interest received on moneys in the lottery operating fund, and all other fees and moneys collected. For the purposes of this section, the award of a free ticket or free play does not constitute revenue. All money in the funds created by this section are continuously appropriated for the purposes specified in this section. All funds received by the state lottery shall be set forth in an informational budget as described in § 4-7-7.2 and be annually reviewed by the Legislature. Any disbursement from the lottery operating fund shall be by authorization of the executive director for any of the following purposes:

(1)    The payment of prizes to the holders of valid, winning lottery tickets;

(2)    Expenses of the lottery, which shall include all costs incurred in the operation and administration of the South Dakota Lottery; all costs resulting from contracts entered into for the purchase or lease of goods and services needed for operation of the lottery, including supplies, materials, tickets, independent studies and surveys, data transmission, advertising, printing, promotion, incentives, public relations, communications, compensation paid to lottery retailers; distribution of tickets; and reimbursement of costs of facilities and services provided by other state agencies; and

(3)    Transfers of net proceeds to the state general fund.

Source: SL 1987, ch 313, § 22; SL 1990, ch 341, § 4; SL 2013, ch 219, § 4.


42-7A-23Amount from sale of tickets allocated for payment of prizes--Means of payment for prizes.

As nearly as practical, a minimum of fifty percent of the projected revenue from the sale of lottery tickets, computed on a year-round basis from the combined sale of instant and on-line lottery games, shall be allocated for payment of prizes. The executive director shall award the designated prize to the holder of the ticket upon validation of a winning claim ticket. The executive director may make payment for prizes by any means he deems appropriate upon the validation of winning tickets.

Source: SL 1987, ch 313, § 23; SL 1989, ch 372, § 2; SL 1990, ch 341, § 5.


42-7A-24Transfer of net proceeds to state funds.

Net proceeds from the sale of instant lottery tickets shall be transferred to the state general fund on an annual basis after July first each year. The commission shall maximize the net proceeds to the state from the sale of instant and on-line lottery tickets. In no event may yearly lottery expenses for the sale of lottery tickets, excluding expenditures from retained earnings, exceed the amount of combined net proceeds transferred to the state general fund and the state capital construction fund. Net machine income from video lottery games shall be directly deposited in the general fund upon receipt. Net proceeds are funds in the lottery operating fund which are not needed for the payment of prizes, lottery expenses, and total retained earnings up to one and one-half million dollars cash deemed necessary by the executive director and commission for replacement, maintenance, and upgrade of business systems, product development, legal, and operating contingencies of the lottery.

In fiscal year 2019, the commission shall transfer twenty-five percent of the net proceeds from the sale of on-line lottery tickets collected pursuant to § 42-7A-24 to the general fund and seventy-five percent of the net proceeds from the sale of on-line lottery tickets shall be transferred to the state capital construction fund created in § 5-27-1. In fiscal year 2020, the commission shall transfer thirty-five percent of the net proceeds from the sale of on-line lottery tickets collected pursuant to § 42-7A-24 to the general fund and sixty-five percent of the net proceeds from the sale of on-line lottery tickets shall be transferred to the state capital construction fund created in § 5-27-1. In fiscal year 2021, the commission shall transfer thirty-five percent of the net proceeds from the sale of on-line lottery tickets collected pursuant to § 42-7A-24 to the general fund and sixty-five percent of the net proceeds from the sale of on-line lottery tickets shall be transferred to the state capital construction fund created in § 5-27-1. In fiscal year 2022, the commission shall transfer fifty percent of the net proceeds from the sale of on-line lottery tickets collected pursuant to § 42-7A-24 to the general fund and fifty percent of the net proceeds from the sale of on-line lottery tickets shall be transferred to the state capital construction fund created in § 5-27-1. In fiscal year 2023 and each year thereafter, the commission shall transfer seventy percent of the net proceeds from the sale of on-line lottery tickets collected pursuant to § 42-7A-24 to the general fund and thirty percent of the net proceeds from the sale of on-line lottery tickets shall be transferred to the state capital construction fund created in § 5-27-1.

Source: SL 1987, ch 313, § 24; SL 1988, ch 345; SL 1989, ch 372, § 3; SL 1990, ch 341, § 6; SL 1990, ch 46, § 4A; SL 1993, ch 48, § 4; SL 1993, ch 319, § 1; SL 1996, ch 47, § 2; SL 1997, ch 241, § 1; SL 2013, ch 219, § 5; SL 2015, ch 39, § 7; SL 2018, ch 124, § 5.


42-7A-24.1Acceptance and expenditure of funds obtained from federal sources, gifts, contributions and other sources.

The lottery commission may accept and expend for the purpose of this chapter any funds obtained from federal sources, gifts, contributions, or any other source if such acceptance and expenditure is approved in accordance with § 4-8B-10.

Source: SL 1987, ch 313, § 26.


42-7A-24.2Payment of expenditures.

Expenditures authorized by this chapter from the lottery operating fund shall be paid on warrants drawn by the state auditor on vouchers approved by the executive director of the state lottery.

Source: SL 1987, ch 313, § 27; SL 2013, ch 219, § 6.


42-7A-25Employment and direction of investigative personnel.

The executive director may employ and direct investigative personnel to conduct administrative investigations pursuant to licensing and enforcement of rules. The executive director shall contract with the attorney general for necessary security and law enforcement services in conducting background investigations.

Source: SL 1987, ch 313, § 29; SL 1993, ch 317, § 8; SL 2008, ch 223, § 1.


42-7A-26Appointment of assistant attorney general to assist in enforcement.

The attorney general shall appoint an assistant attorney general to assist the South Dakota Lottery in the enforcement of the criminal and civil provisions of this chapter.

Source: SL 1987, ch 313, § 30.


42-7A-27Commission members or lottery employees not to have interest in lottery contracts or to accept gifts or loans from persons or businesses contracting with lottery--Violation as misdemeanor.

No member of the commission, employee of the South Dakota Lottery, or any person residing in the same household as either of the aforementioned may:

(1)    Directly or indirectly, individually, as a member of a partnership or other association, or as a stockholder, director, or officer of a corporation, have an interest in a business which contracts for the operation or promotion of the lottery; or

(2)    Accept or agree to accept any economic opportunity, gift, loan, gratuity, special discount, favor, hospitality, or service having an aggregate value of one hundred dollars or more in any calendar year from a person or business contracting or seeking to contract with the state to supply materials, tickets, or consulting services for use in the lottery or from a lottery retailer, person licensed, or an applicant for a contract or license under this chapter.

A knowing violation of this section is a Class 1 misdemeanor.

Source: SL 1987, ch 313, § 31; SL 1989, ch 368, § 13; SL 1991, ch 186, § 34.


42-7A-28Persons contracting to supply materials, tickets or consulting services not to give gifts or loans to commission members or lottery employees--Violation as misdemeanor.

Any person contracting or seeking to contract with the state to supply materials, tickets, or consulting services for use in the lottery or from a lottery retailer, person licensed, or an applicant for a contract or license under this chapter may not offer, pay, give, or make any economic opportunity, gift, loan, gratuity, special discount, favor, hospitality, or service having an aggregate value of one hundred dollars or more in any calendar year to a member of the commission or employee of the South Dakota Lottery, or to any person residing in the same household of either of the aforementioned. A knowing violation of this section is a Class 1 misdemeanor.

Source: SL 1987, ch 313, § 32; SL 1989, ch 368, § 14; SL 1991, ch 186, § 35.


42-7A-29Removal from office for violation of conflict of interest provisions--Application of other conflict of interest statutes.

If a member of the commission or employee of the South Dakota Lottery, or any person residing in the same household of either of the aforementioned, violates any provision of §§ 42-7A-27 and 42-7A-28, such member of the commission or employee of the South Dakota Lottery shall be removed from his office or position. In addition to the provisions of this section, or §§ 42-7A-27 and 42-7A-28, all other provisions of state law relating to conflicts of interest of state employees apply to the members of the commission and employees of the South Dakota Lottery.

Source: SL 1987, ch 313, § 33; SL 1991, ch 186, § 36.


42-7A-30Counterfeiting lottery tickets Class 6 felony.

Any person who, with intent to defraud, falsely makes, alters, forges, passes, or counterfeits a lottery ticket issued by the South Dakota Lottery under this chapter is guilty of a Class 6 felony.

Source: SL 1987, ch 313, § 34.


42-7A-31Sale of tickets at price greater than that fixed by rules prohibited--Sale by authorized retailer only--Violation.

No person may sell a lottery ticket at a price greater than that fixed by the rules adopted pursuant to this chapter. No person other than a lottery retailer authorized by the South Dakota Lottery may sell or resell lottery tickets. Any person convicted of violating this section is guilty of a Class 1 misdemeanor on the first offense and a Class 6 felony on the second or subsequent offense.

Source: SL 1987, ch 313, § 35.


42-7A-32Sale of ticket to person under eighteen prohibited--Violation--Gift of ticket to person under eighteen permitted--Prize paid to parent or guardian.

No lottery ticket may be sold to any person under the age of eighteen years. Any lottery retailer, employee of a lottery retailer, or any other person who knowingly sells or offers to sell a lottery ticket to any person who is under the age of eighteen years is guilty of a Class 1 misdemeanor on the first offense and a Class 6 felony on the second or subsequent offense. A lottery ticket may be given as a gift to a person under the age of eighteen years. Any prize won by a person under the age of eighteen years from a ticket given as a gift shall be paid to such person's parent or legal guardian.

Source: SL 1987, ch 313, § 36.


42-7A-33Purchase of ticket or payment of prize to certain persons prohibited--Exceptions.

No lottery ticket may be purchased by, and no prize may be paid to, any of the following persons or to any person related by blood or marriage and who is a member of the same household in the principal place of abode of any such person:

(1)    Any member of the commission or employee of the South Dakota Lottery, unless authorized in writing by the executive director; or

(2)    Any officer or employee of a company or business which is currently engaged in supplying equipment, supplies, or services being used directly in the operation of any lottery conducted pursuant to this chapter, unless authorized in writing by the executive director for research purposes. However, no prize may be paid on any ticket purchased for research purposes.

Nothing in this section prohibits any lottery retailer or his employee from purchasing lottery tickets or from being paid a prize of a winning ticket. Any person who knowingly violates this section is guilty of a Class 1 misdemeanor on the first offense and a Class 6 felony on the second or subsequent offense.

Source: SL 1987, ch 313, § 37.


42-7A-34Prize paid to holder of winning ticket--Deceased winner's prize paid to representative--Right to prize nonassignable--Prizes subject to taxation--Disposition of unclaimed prize--Liability of lottery after payment of prize.

The prize to be paid or awarded for each winning ticket shall be paid to the person who is adjudged by the executive director to be the holder of such winning ticket. However, the prize of a deceased winner shall be paid to the duly appointed representative of the estate of such winner or to any other person claiming the prize pursuant to the provisions of chapter 30-11A. The right of a person to a prize drawn or awarded is not assignable. All prizes awarded shall be taxed as South Dakota source income and are subject to federal income tax laws and regulations. Unclaimed prize money shall be retained for a period deemed appropriate by the executive director and if no claim is made within such period, then such unclaimed prize money shall be added to the prize pools of subsequent lottery games. The State of South Dakota, members of the commission and employees of the South Dakota Lottery are discharged of all further liability upon payment of a prize pursuant to this section.

Source: SL 1987, ch 313, § 38; SL 1989, ch 371, § 1; SL 1990, ch 341, § 7.


42-7A-35
     42-7A-35.   Repealed by SL 1989, ch 371, § 2


42-7A-36Certain mechanical or electronic devices prohibited--Violation as felony--Devices as nuisances.

No person may have in his possession, custody, or under his control or permit to be kept in any place under his possession or control, any device that awards credits and contains a circuit, meter or switch capable of removing and recording the removal of credits when the award of credits is dependent upon chance. A violation of this section is a Class 6 felony. All devices described in this section are hereby declared to be public nuisances. The provisions of this section do not apply to devices or electronic video game machines licensed pursuant to this chapter.

Source: SL 1989, ch 368, § 15.


42-7A-37Requirements for licensed video lottery machines.

Each video lottery machine licensed under this chapter:

(1)    Shall offer only games licensed by the South Dakota Lottery and authorized by the commission;

(2)    May not have any means of manipulation that affect the random probabilities of winning a video lottery game;

(3)    Shall have one or more mechanisms that accept coins or cash in the form of bills. The mechanisms shall be designed to prevent obtaining credits without paying by stringing, slamming, drilling, or other means. If such attempts involve physical tampering, the machine shall suspend itself from operation until reset;

(4)    Shall have nonresettable meters housed in any readily accessible locked machine area that keep a permanent record of all cash inserted into the machine, all refunds of winnings made by the machine's printer, credits played for video lottery games, and credits won by video lottery players;

(5)    Shall be capable of printing a ticket voucher stating the value of the prize for the player at the completion of each video lottery game; the time of day in a twenty-four hour format showing hours and minutes; the date; the machine serial number; the sequential number of the ticket vouchers; and an encrypted validation number from which the validity of the prize may be determined;

(6)    Shall have accounting software that keeps an electronic record which includes, but is not limited to the following: total cash inserted into the machine; the value of winning tickets claimed by players; the total video lottery credits played and the total video lottery credits awarded by a video lottery game; and the payback percentage credited players of each video lottery game;

(7)    Shall be linked under a central communications system to provide auditing program information as approved by the commission. The communications system shall be installed and all testing conducted no later than December 1, 1989. Until such time, all accounting of machine transactions shall be audited by electronic records maintained by each video lottery machine as required in subdivision (6) of this section. In no event may the communications system approved by the commission limit participation to only one manufacturer of video lottery machines by either the cost in implementing the necessary program modifications to communicate or the inability to communicate with the central communications system. Nothing in this section may be construed as requiring a machine which only offers video lottery games to be on-line or in constant communication with a central computer.

Source: SL 1989, ch 368, § 16.


42-7A-37.1Restrictions on licensed establishment.

A business licensed pursuant to subdivisions 35-4-2(12) and (16) may not be a licensed establishment for video lottery placement pursuant to subdivision 42-7A-1(6) unless it is a bar or lounge. For the purposes of this section, a bar or lounge is an enterprise primarily maintained and operated for the selling, dispensing, and consumption of alcoholic beverages on the premises and may also include the sale and service of food. A bar or lounge may be physically connected to another enterprise within the same building, which enterprise may be owned or operated by the same person. There may be interior access between a bar or lounge and a connected enterprise. However, there shall be a floor to ceiling opaque wall separation between the two enterprises. A separation wall may be constructed to provide visual and physical access for employees from areas in the building not open to the public. The bar or lounge shall have a separate entrance and exit. A separate entrance and exit is not required if entrance to the bar may only be obtained from the other distinct enterprise and the public may not enter the other enterprise by first passing through the bar or lounge. All video lottery machines shall be adequately monitored during business hours. Adequate monitoring shall be accomplished by the personal presence of an employee or by an employee using video cameras or mirrors and periodic inspections of the bar or lounge. No new license may be issued to any establishment after July 1, 1992, unless such establishment complies with this section. No license may be renewed to any establishment after July 1, 1993, unless such establishment complies with this section.

Source: SL 1991, ch 351, §§ 2, 3; SL 1992, ch 304, § 2.


42-7A-38Limit on amount played and awards given.

A video lottery machine may not allow more than two dollars to be played on a game or award free games or credits in excess of one thousand dollars per bet. The payback value of one credit shall be at least eighty percent of the value of the credit.

Source: SL 1989, ch 368, § 17; SL 2013, ch 219, § 7.


42-7A-39Display of license for video lottery machine--Confiscation--Violation as felony.

Each video lottery machine shall be licensed by the executive director before placement or operation on the premises of a licensed establishment. Each machine shall have the license prominently displayed thereon. Any machine which does not display the license required by this section is contraband and a public nuisance subject to confiscation by any law enforcement officer. A violation of this section is a Class 6 felony.

Source: SL 1989, ch 368, § 18.


42-7A-40Examination of video lottery machines--Costs paid by manufacturer--Contract for examination.

The South Dakota Lottery shall examine prototypes of video lottery machines and associated equipment of manufacturers seeking a license as required in this chapter. The South Dakota Lottery may require the manufacturer seeking the examination and approval of a video lottery machine or associated equipment to pay the anticipated actual costs of the examination in advance and, after the completion of the examination, shall refund overpayments or charge and collect amounts sufficient to reimburse the South Dakota Lottery. The South Dakota Lottery may contract for the examination of video lottery machines and associated equipment as required by this section.

Source: SL 1989, ch 368, § 19; SL 2013, ch 219, § 8.


42-7A-41Video lottery machine manufacturer, distributor, operator, and establishment licenses required--Fees.

Each video lottery machine manufacturer, distributor, operator, and licensed establishment shall be licensed by the executive director before any video lottery machine or associated equipment is manufactured, distributed, sold, or placed for public use in this state. The commission shall, by rule promulgated pursuant to chapter 1-26, establish an annual fee for each license not to exceed the following:

(1)    Video lottery machine manufacturer--$5,000;

(2)    Video lottery machine distributor--$5,000;

(3)    Video lottery machine operator--the greater of $1,000 or $100 per machine licensed; and

(4)    Video lottery establishment--$100.

In addition to the annual license fees, the executive director may charge a one-time license application fee not to exceed fifty dollars. All fees collected pursuant to this section shall be deposited in the video lottery operating fund created by § 42-7A-41.1. All licenses issued by the South Dakota Lottery under this section are renewable annually unless sooner cancelled or terminated. No license issued under this section is transferable or assignable.

Source: SL 1989, ch 368, § 20; SL 1990, ch 341, § 8; SL 1990, ch 342, § 1.


42-7A-41.1Video lottery operating fund established.

There is created in the state treasury the video lottery operating fund, into which shall be deposited the fees imposed pursuant to § 42-7A-41 and one-half of one percent of net machine income.

Source: SL 1990, ch 342, § 2; SL 1991, ch 353, § 2.


42-7A-41.2Posting video lottery odds required.

The odds of winning each video lottery game shall be posted on or near each video lottery machine. The manner in which the odds are calculated and how they are posted shall be established by the commission by rule promulgated pursuant to chapter 1-26.

Source: SL 1991, ch 354.


42-7A-42Multiple types of licenses prohibited.

A video lottery machine manufacturer may not be licensed as a video lottery machine operator or own, manage, or control a licensed establishment. A video lottery machine distributor may not be licensed as a video lottery machine operator or own, manage, or control a licensed establishment. A video lottery machine operator may not be licensed as a video lottery machine manufacturer or distributor. An owner or manager of a licensed establishment may not be licensed as a video lottery machine manufacturer or distributor. Nothing in this section restricts an owner or manager of a licensed establishment from owning video lottery machines licensed under § 42-7A-41 and placing such machines on the premises, provided they meet the same requirements of video machine operators. However, nothing in this section prohibits the commission, after prior notice to all licensed video lottery machine operators, from authorizing the placement of video lottery machines by a manufacturer in an establishment that satisfactorily demonstrates that it is otherwise unable to obtain appropriate machine placement or service.

Source: SL 1989, ch 368, § 21.


42-7A-43Background investigation of video lottery licensees--Eligibility requirements.

Any person licensed as a video lottery machine manufacturer, distributor, operator, or lottery retailer shall submit to a background investigation. This includes each partner of a partnership and each director and officer and all stockholders of five percent or more in a parent or subsidiary corporation of a video lottery machine manufacturer, distributor, operator, or lottery retailer. A video lottery machine manufacturer or distributor shall meet the same requirements of subdivisions 42-7A-13(1) to (4), inclusive, and § 42-7A-14. A video lottery machine operator shall meet the same requirements of §§ 42-7A-13 and 42-7A-14, in addition to being a resident of the State of South Dakota and, if a partnership or corporation, the majority of ownership interest shall be held by residents of the state or by a public company or its subsidiary licensed as a video lottery machine operator pursuant to chapter 42-7A prior to January 1, 1997, and traded on any market regulated or recognized by the United States Securities and Exchange Commission. A copy of any disclosure statement involving ownership of the public company required to be filed with the United States Securities and Exchange Commission shall be filed with the lottery commission. A lottery retailer shall meet the same requirements of §§ 42-7A-13 and 42-7A-14. Any applicant for any license under this chapter has the burden of proving his or her qualifications to the satisfaction of the commission and executive director. The commission may adopt rules pursuant to chapter 1-26 to establish additional requirements to preserve the integrity and security of the lottery.

Source: SL 1989, ch 368, § 22; SL 1993, ch 317, § 10; SL 1997, ch 242, § 1.


42-7A-44Rules for placement of video lottery machines--Number limited--Placement in bar or lounge with on-sale license.

The placement of video lottery machines in licensed establishments shall be subject to the rules of the commission promulgated pursuant to chapter 1-26. No more than ten video lottery machines may be placed in any licensed establishment. The bar or lounge with an on-sale license issued pursuant to subdivision 35-4-2(12) or (16) shall be restricted to persons twenty-one years of age or older. The entrance to the area where video lottery machines are located shall display a sign that the premises are restricted to persons twenty-one years or older. Notwithstanding the restrictions in § 35-4-79, persons under the age of twenty-one may only enter the premises where video lottery machines are located provided they are accompanied by a parent, guardian, or spouse of twenty-one years or older.

Source: SL 1989, ch 368, § 23; SL 1991, ch 355, § 1; SL 1992, ch 304, § 3.


42-7A-44.1Denial or revocation of license for noncompliance.

The commission shall deny or revoke an establishment license for video lottery machine placement that does not meet the requirements of § 42-7A-44.

Source: SL 1991, ch 355, § 2; SL 2013, ch 219, § 9.


42-7A-45Video lottery machine income--Remittance to state--False report as felony--Records--Penalty.

The state's percentage of net machine income shall be reported and remitted to the South Dakota Lottery within fifteen days after the fifteenth day of each month and within fifteen days after the end of each month by the machine owner. A machine owner who falsely reports or fails to report the amount due required by this section is guilty of a Class 6 felony and is subject to termination of his license by the South Dakota Lottery. Each machine owner shall keep a record of net machine income in such form as the executive director may require. All payments not remitted when due shall be paid together with a penalty assessment on the unpaid balance at a rate of one and one-half percent per month.

Source: SL 1989, ch 368, § 24.


42-7A-46Tampering with video lottery machine as misdemeanor.

Any person who tampers with a video lottery machine with intent to interfere with the proper operation of such machine is guilty of a Class 1 misdemeanor.

Source: SL 1989, ch 368, § 25.


42-7A-47Manipulating outcome, payoff, or operation of video lottery machine as felony.

Any person who with intent to manipulate the outcome, payoff, or operation of a video lottery machine, manipulates the outcome, payoff, or operation of a video lottery machine by physical tampering or any other means is guilty of a Class 5 felony.

Source: SL 1989, ch 368, § 26.


42-7A-48Age limit and legal hours of operation for video lottery machines.

No person under twenty-one years of age may play a video lottery machine licensed pursuant to § 42-7A-41. No video lottery machine licensed pursuant to § 42-7A-41 may be played except during the legal hours of operation allowed for the on-sale consumption of alcoholic beverages. A violation of this section is a Class 2 misdemeanor.

Source: SL 1989, ch 368, § 27; SL 1990, ch 342, § 3.


42-7A-49Lottery products on Indian reservations authorized.

The lottery may negotiate with Indian tribes for the placement and distribution of lottery products within the exterior boundaries of Indian reservations within the state.

Source: SL 1989, ch 368, § 29.


42-7A-50Confidentiality of lottery records.

Information and records of the South Dakota Lottery are confidential, except for official purposes, and may not be disclosed except to officers, employees, or legal representatives of the Department of Revenue for the purpose of and only to the extent necessary in the investigation and audit procedures authorized by Title 10 or in accordance with a judicial order. No person may use a subpoena, discovery, or other applicable statutes to obtain such information or records. Information and records considered confidential include:

(1)    Applications, credit, and security checks of lottery retailers, licensees, and persons seeking or doing business with the lottery;

(2)    Marketing, financial, or sales data, the disclosure of which may be harmful to the competitive position of the South Dakota Lottery, its retailers, licensees, or persons seeking or doing business with the lottery;

(3)    Audit work papers, worksheets, and auditing procedures used by the lottery, its agent, or employees; and

(4)    Tax returns of individual licensees.

However, this section may not be construed to make confidential the name of any video lottery operator including, if the video lottery operator is a partnership, the name of any partner and, if the video lottery operator is an association or corporation, the name of any director, any officer, and any stockholder who owns five percent or more of the stock in the association or a parent or subsidiary corporation.

Source: SL 1989, ch 368, § 30; SL 1992, ch 70, § 2; SL 2001, ch 239, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.


42-7A-51Lottery setoff program established--Computerized file of persons owing state.

The commission shall establish a liability setoff program by which lottery prize payments may be used to satisfy debts owed or collected through state agencies. Any participating state agency shall, on a monthly basis, provide the executive director a computerized file of persons owing a debt to or collected through that state agency which contains the following information: the first name, last name, middle initial, social security number, and the amount of the debt.

Source: SL 1989, ch 371, § 3.


42-7A-52Debt setoff from prize due--Notice of right to appeal--Time limitation--Transfer of setoff amount to agency.

The executive director shall match the information submitted by the agency with persons who are entitled to a lottery prize payment in an amount in excess of one hundred dollars. If there is a match, the executive director shall set off the amount of the debt from the prize due and notify the person of the person's right to appeal to the appropriate court or to request a review by the agency pursuant to agency rule. The person shall make a request or appeal within thirty days after the setoff. If the setoff accounts for only a portion of the prize due, the remainder of the prize shall be paid to the person. The executive director shall promptly transfer the setoff amount to the agency.

Source: SL 1989, ch 371, § 4.


42-7A-53Commission, employees, and lottery discharged from liability.

The members of the commission, executive director, employees, and the lottery are discharged of all further liability for the amount of any setoff paid to a state agency or proceeding brought pursuant to §§ 42-7A-34 and 42-7A-51 to 42-7A-55, inclusive.

Source: SL 1989, ch 371, § 5.


42-7A-54Apportionment of prize among agencies--Priority of child support payments.

If two or more agencies have delinquent accounts for the same person, the executive director shall apportion the prize equally among them. However, a setoff to the Department of Social Services for child support payments has priority over all other setoffs.

Source: SL 1989, ch 371, § 6.


42-7A-55Collection of remainder of debt.

If the prize is insufficient to satisfy the entire debt, the remainder of the debt may be collected by the agency as provided by law and resubmitted for setoff against any other prize awarded.

Source: SL 1989, ch 371, § 7.


42-7A-56Public policy declared.

The Legislature hereby finds, and declares to be the public policy of this state that:

(1)    The success of the South Dakota Lottery is dependent upon public confidence and trust that it is conducted honestly and free from criminal and corruptive elements;

(2)    Public confidence and trust can only be maintained by strict regulation of all persons, locations, practices, associations, and activities related to the sale of lottery products and the operation, manufacturing, and distribution of video lottery games and equipment; and

(3)    No applicant for a license or other affirmative commission action has any right to a license or to the granting of the approval sought. Any license issued or other commission approval granted pursuant to the provisions of this chapter is a revocable privilege, and no holder acquires any vested interest or property right therein or thereunder.

Source: SL 1993, ch 317, § 1.


42-7A-57Approval or disapproval of license applications.

The executive director may approve or disapprove any application for license, as provided in § 42-7A-41, depending upon whether the executive director deems the applicant a suitable person to hold the license and whether the executive director considers the proposed location suitable. Failure of the applicant to provide information necessary to allow investigation into his background, is also grounds for denial of the license.

Source: SL 1993, ch 317, § 3.


42-7A-58Reapplication for license after denial or revocation.

Any applicant for a license who has had his application denied or revoked by the executive director pursuant to § 42-7A-57 may not reapply until at least one year has elapsed from the date of the denial or revocation. Any person who has been denied a license or had a license revoked for a second time may not reapply until at least three years have passed since the date of the second denial or revocation.

Source: SL 1993, ch 317, § 4.


42-7A-59False statements in license applications--Perjury.

No person may knowingly make a false statement in any application for a license or in any statement attached to the application. Any person who signs an application for a license issued pursuant to this chapter knowing that any information on such application or in any statement attached to the application is false or untrue, in whole or in part, is guilty of perjury.

Source: SL 1993, ch 317, § 9.


42-7A-60Executive or closed meetings permitted.

In addition to the provisions of § 1-25-2, the commission may hold executive or closed meetings for any of the following purposes:

(1)    Considering applications for licensing when discussing the background investigations or personnel information;

(2)    Consulting with the executive director and employees of the lottery concerning possible lottery rule or law violations;

(3)    Meeting with lottery officials of other jurisdictions, the attorney general or law enforcement officials relating to possible criminal violations; or

(4)    Deliberations after hearing evidence on a contested case necessary to reach a decision.

Source: SL 1993, ch 317, § 11.


42-7A-61
     42-7A-61.   Repealed by SL 2013, ch 219, § 10.


42-7A-62Collection of fee--Deposit in general fund.

In addition to the fee collected pursuant to § 42-7A-41 and deposited in the video lottery operating fund, the following fee shall be collected each year and deposited into the general fund:

Video lottery machine manufacturers--$15,000.

Source: SL 1993, ch 318, § 2; SL 1995, ch 243, § 3.


42-7A-63State's percentage of net machine income--Deposit into general fund and video lottery operating fund.

The commission shall maximize revenues to the state from video lottery. The state's percentage of net machine income shall be fifty percent. The state's percentage of net machine income shall be directly deposited to the general fund, except for one-half of one percent of net machine income authorized for deposit into the video lottery operating fund.

Source: SL 1993, ch 318, § 3; SL 1994, ch 330; SL 1995, ch 243, § 2; SL 1996, ch 72, § 2B; SL 2015, ch 39, § 8.


42-7A-64Additional criteria for on-sale alcoholic beverage licensees in video lottery licensed establishments.

A municipality or county may consider, in addition to the criteria for the issuance of an on-sale alcoholic beverage license, the following criteria for authorizing video lottery machine placement in establishments issued an on-sale alcoholic beverage license pursuant to subdivisions 35-4-2(12) and (16):

(1)    The number of establishments currently licensed for video lottery;

(2)    The proximity of the business to other establishments licensed for video lottery;

(3)    The type of business and manner in which the applicant proposes to operate it;

(4)    The location of the business in relation to other businesses, residential areas, or activities within the same general area;

(5)    The extent to which minors frequent a business connected to the one proposed; and

(6)    The effect the proposed business has on economic development.

The governing board shall certify on each application filed with the Department of Revenue for a license granted under subdivisions 35-4-2(12) and (16) whether the business premises is authorized for video lottery machine placement. An existing video lottery license may not be denied renewal or transfer based upon the criteria set forth in this section. The lottery may issue a video lottery license to those establishments certified pursuant to this section. Notwithstanding the above provisions, a county or municipality may not restrict the number of alcoholic beverage licenses issued under subdivisions 35-4-2(12) and (16) and certified for video lottery to a number less than those licensed as video lottery establishments on March 1, 1994.

Source: SL 1994, ch 329, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.


42-7A-65
     42-7A-65.   Repealed by SL 2013, ch 219, § 11.


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