And although the new games numbered just 15.7 percent of the total machines in the market, the new games produced 20.8 percent of the net income during the past seven months.
The new games generally are being swapped into place as replacements for older machines. Compared to one year ago, the terminals number about the same — 9,137 this year vs. 9,103 last year — while the 1,435 licensed establishments are down about 5 percent from 1,517.
Another part of the Daugaard expansion reflects his desire for better relationships between state government and tribal governments. He elevated the Office of Tribal Relations to a Cabinet-level department and appointed J.R. LaPlante.
And for the only time other than a minor change under Janklow in his final term, tribal governments are being allowed more slot machines than the original 250 per tribe that had stood since the first state-tribal compacts of the late 1980s and early ‘90s.
In mid-2011, the Daugaard administration reached agreement with the Flandreau Santee Sioux Tribe to double its maximum number of slot machines at 500.
This year, the Daugaard administration negotiated the broadest expansion yet with the Sisseton Wahpeton Oyata tribal government, tripling the slot machines at 750 total for the tribe’s two casinos outside Watertown and outside Sisseton.
That deal extends to 2022 and calls for the tribe to have authority to add 20 more slots annually starting in 2018, for an eventual total of 850. The tribe in turn is contributing a small portion of revenues to local non-tribal services in Roberts and Codington counties.
At the lottery office, the sales staff has high hopes for this budget year. Video lottery has always produced by far the most revenue — $92.7 million is forecast as state government’s share for the current budget — but instant tickets are expected to generate $5.4 million of profit for the state and lotto games, just shy of $9 million.
Lotto sales, helped by the huge Powerball jackpot this fall, have grossed $15.1 million so far, up $4 million from a year ago. More than $1.3 million of Powerball sales were recorded just on the Wednesday of the big drawing.
“A record Powerball (sales) year is well on track,” lottery sales director Joe Willingham told the commission at a meeting Thursday. “Across the board, lotto is in excellent shape for the fiscal year.”
Instant ticket sales trailed slightly from the record pace of last year, Willingham said, in part because of some rough early-winter weather.
Sales last year in the four-week Christmas period pushed well past $2 million. Heading into that similar time frame this year, sales stood at about $9.8 million, off about $100,000 from a year ago.
Last week, the governor announced two new appointments to the Lottery Commission. Two of the current members, Dick Werner of Huron and Jim Peterson of Revillo, won election to the Legislature in November. Daugaard selected two current legislators who aren’t returning as the replacements.
They are Sen. Jim Putnam, R-Armour, and Rep. Chuck Turbiville, R-Deadwood. Turbiville was term-limited and didn’t run for the Senate. Putnam, one of the Legislature’s longest-serving members ever with 26 consecutive years in office, lost in a June primary for a House seat.
Turbiville has been head of the Deadwood Gaming Association and is running for mayor of Deadwood this spring. Putnam specialized throughout his career at the Capitol in work on the Legislature’s appropriations committees that oversee state government’s budgets.
They will join the commission on Jan. 8 when they officially no longer are legislators. Peterson has already submitted his resignation from the commission, while Werner participated in his final meeting last week.
Daugaard has another seat on the commission to fill. Kory Menken of Dakota Dunes is term-limited in January. Werner would have been term-limited in January, too.
The commission’s entire membership will have turned over since Daugaard became governor. Last year, he appointed Bob Hartford of Pierre, who previously was head of the Music and Vending Association, a major organization for video lottery businesses, and Doyle Estes of Hill City, who previously was an owner in several large video lottery businesses. Hartford is now the commission’s chairman.
Earlier this year, Daugaard appointed Roger Novotny of Pierre, who previously was head of the state Division of Banking, and Brent Dykstra of Fort Pierre, who is a banker.
Together, they’ve driven formation of a strategic plan that has immediate, medium- and long-range goals. They appear to want to put South Dakota back on the leading edge of innovations in marketing, technology and products.
Werner was a front-runner in that regard during his eight years on the commission. He said the public better understands the contributions made by the lottery to state government and the attitude within the commission has changed from being conservative and “moved to a creative mode” in the past year.
“It’s certainly improved and will continue to improve with new members coming on,” Werner said. He added, “You can consider you have a friend of lottery in the Legislature.”
Hartford had routinely attended the commission meetings while in his previous role at MVA. He gave a compliment to Werner for being willing to speak up and ask questions and make suggestions during the past eight years.
“You keep everybody’s feet to the fire and on track. It’s needed,” Hartford told him.