SIOUX FALLS, SD — A city vs. state lawsuit may be brewing here over which level of government has the statutory authority to regulate placement of video lottery terminals, which have been legal in South Dakota for 19 years.

The city council here plans a May 5 vote on an ordinance that would extend years-old local regulation of the placement of video lottery terminals. Under current rules, VTL machines are already illegal within 2,000 feet of parks or schools. However, gaming establishments with full liquor licenses have been escaping the ban, saying they answer to state regulators, not local authorities. The city council's ordinance would close that loophole.

State secretary of revenue Paul Kinsman said the administration of Gov. Mike Rounds holds that only the state can regulate the placement of such games. City council members said they plan to vote for the measure anyway.

The South Dakota Lottery pioneered America's first state video lottery in 1989. Since that launch, VLTs have provided more than $1 billion in revenue to the state. Privately held operating companies are allowed to participate in the VLT market.

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