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48:02:04:01. Criteria for suspension, revocation, and denial of license renewal. The
commission executive director may suspend, revoke, or deny renewal of a license for any
violation of or noncompliance with the provisions of SDCL 42-7A or this title.
Source: 16 SDR 27, effective August 18, 1989; 30 SDR 52, effective October 28, 2003.
General Authority: SDCL 42-7A-21(16)(17).
Law Implemented: SDCL 42-7A-21(6), 42-7A-11, 42-7A-56(3).
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48:02:04:03. Hearing on suspension, revocation, denial of license renewal, or
imposition of civil fine. Licensees have the right to request an administrative hearing in the event
of suspension, revocation, denial of license renewal, or imposition of civil fines, according to the
provisions of SDCL 1-26. A notice and hearing regarding suspension, revocation, denial of license
renewal, or violations of SDCL 42-7A and this title shall be conducted by the commission in
accordance with the contested case provisions of SDCL 1-26.
Source: 16 SDR 27, effective August 18, 1989.
General Authority: SDCL 42-7A-4, 42-7A-21.
Law Implemented: SDCL 42-7A-4, 42-7A-21.
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48:02:05:04. Duties of licensed operators. Specific duties of licensed operators are as follows:
(1) Promote the placement of machines in licensed establishments and assume primary
responsibility for operation and maintenance of video lottery machines;
(2) Maintain and provide in accordance with chapter 48:02:10, either directly or through a
service agent, an inventory of associated equipment to ensure the timely repair and continued,
approved operation and play of the video lottery machines it operates;
(3) Maintain, in accordance with chapter 48:02:10, all skills necessary for the timely repair and
service of machines and associated equipment to ensure the continued, approved operation of the
machines it operates and require employees or service agents to maintain the same skills;
(4) Attend all meetings, seminars, and training sessions for the repair and maintenance of
machines and associated equipment required by the lottery and this article;
(5) Supervise its employees and the activities of licensed establishments to ensure compliance
with the requirements of this article;
(6) Assume responsibility for the payment to players of credits awarded under arrangements
with licensed establishments where the machines are located;
(7) Assume responsibility for machine and associated equipment malfunctions, including any
claim for the payment of credits arising from malfunctions. An operator's liability is limited to the
number of credits for the game displayed in the game rules and may not be greater than $1,000 for
any succession of games played;
(8) Notify the lottery of any recurring electronic or mechanical machine malfunctions or other
problems experienced in a particular approved machine model;
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(9) Enter into service contracts for the maintenance and repair of video lottery machines and
associated equipment with qualified service agents under terms and conditions agreed upon by
both parties;
(10) Comply with all Type I technician requirements in § 48:02:10:02.01;
(11) Comply with all Type II technician requirements in § 48:02:10:02.02;
(12) Place video lottery machines in establishments and in numbers to ensure maximum
revenues to the state;
(13) Assume all responsibility for establishing communication between each video lottery
machine and the host system;
(14) Maintain general liability insurance coverage for each machine;
(15) Conduct advertising and promotional activities of the video lottery in accordance with
decency, dignity, honesty, and good taste that does not reflect adversely on the lottery or the state
of South Dakota;
(16) Contract only with persons authorized under this title to directly share in revenues
generated from net machine income. Any contracts entered into for the division of revenues from
net machine income must clearly state that the lottery is not a party to the agreement;
(17) Assume liability for lost or stolen money from machine play. Operators may provide for
the sharing of any loss with the establishment where the machine is located;
(18) Furnish security to the lottery by July 1 of each year equal to one-eighteenth of the state's
share of estimated annual net machine income derived from the operator's video lottery machines
by purchase of a surety bond, deposit in cash, or receipt of an irrevocable letter of credit or a
certificate of deposit issued by a South Dakota financial institution with the lottery endorsed on it
as a payee;
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(19) Respond to service calls within twenty-four hours from the time of notification by the
establishment; and
(20) Remove all machines from the establishment machine play area that have been out of
service for more than forty-eight hours from the time notice was received by the lottery.; and
(21) Sell approved machines under chapters 48:02:07 and 48:02:08 to other licensed operators.
Source: 16 SDR 27, effective August 18, 1989; 21 SDR 219, effective June 26, 1995; 37 SDR
215, effective May 31, 2011; 49 SDR 51, effective November 27, 2022.
General Authority: SDCL 42-7A-21(17), 42-7A-43.
Law Implemented: SDCL 42-7A-21, 42-7A-43.
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48:02:07:04. Report of test results. After each test has been completed, the lottery shall
provide the machine manufacturer a report that contains findings, conclusions, and pass/fail
results. The report may contain recommendations for video lottery machine modifications to
bring it into compliance with SDCL 42-7A and this article. Prior to approving a particular
machine model, the lottery may require a trial period to test the machine in a licensed
establishment not to exceed 60 days for a minimum of 21 days. During the trial period, the
manufacturer may not make any modifications to the machine model unless approved by the
lottery. The lottery shall affix seals to each machine during the test period.
Source: 16 SDR 27, effective August 18, 1989.
General Authority: SDCL 42-7A-21(10), 42-7A-21(11).
Law Implemented: SDCL 42-7A-40.
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48:02:08:01. Hardware specifications. Each video lottery machine licensed for placement in
the state must meet the following hardware specifications:
(1) Electrical and mechanical parts and design principles may not subject a player to physical
hazards;
(2) A surge protector must be installed on the line that feeds power to the machine. The battery
backup or an equivalent for the electronic meters must be capable of maintaining accuracy of all
information required in SDCL 42-7A-37(5) and (6) for one hundred eighty days after power is
discontinued from the machine. The backup device shall be kept within the locked logic board
compartment;
(3) An on/off switch that controls the electrical current used in the operation of the machine
and any associated equipment must be located in an accessible place within the interior of the
machine;
(4) The operation of each machine may not be adversely affected by static discharge or other
electromagnetic interference;
(5) An electronic or mechanical coin acceptor may be installed on any video lottery machine
approved after July 1, 2003. Each video lottery machine approved after July 1, 2003, may contain
a bill acceptor that accepts one-dollar bills, five-dollar bills, ten-dollar bills, twenty-dollar bills,
fifty-dollar bills, one hundred-dollar bills, and ticket vouchers. The bill acceptors may be for any
single bill or combination of bills in the denominations listed in this subdivision and ticket
vouchers. Approval letters and test reports of the coin and bill acceptors from other state or federal
jurisdictions may be submitted. However, all coin and bill acceptors are subject to approval by the
lottery;
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(6) The internal space of a video lottery machine may not be readily accessible when the front
door is both closed and sealed;
(7) Logic boards and software Eproms (computer chips that store memory) must be in a
separate, locked area within the machine;
(8) The cash compartment must be contained in a locked area within or attached to the machine;
(9) No hardware switches may be installed that alter the pay tables or payout percentages in the
operation of a game. Hardware switches may be installed to control graphic routines, speed of
play, and sound;
(10) A single printing mechanism must be capable of printing an original ticket voucher and
retaining a legible copy within the machine or create an electronic copy on a self-contained internal
or external medium prior to the continuation of game play. The ticket voucher must record the
following information when credits accrued on the video lottery machine are redeemed for cash:
(a) The number of credits;
(b) The value of the credits in dollars and cents displayed in both alpha and numeric and
written form; and
(c) Any other information required by SDCL 42-7A-37(5);
(11) An unremovable identification plate must appear on the exterior of the machine that
contains the following information:
(a) Manufacturer;
(b) Serial number; and
(c) Model number;
(12) The rules of play for each game must be displayed on the machine face or screen. The
lottery may reject the rules if they are incomplete, confusing, or misleading. Each game must also
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display the credits wagered and the credits awarded for the occurrence of each possible winning
hand based on the number of credits wagered. 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.
All information required by this subdivision must be kept under glass or another transparent
substance and at no time may stickers or other removable devices be placed on the machine face;
(13) Equipment must be installed that enables the machine to communicate with the lottery's
central computer system, as required in SDCL 42-7A-37(7), using a communications protocol
provided to each licensed manufacturer by the lottery for the information and control programs
approved by the commission; and
(14) The legal age requirement in SDCL 42-7A-48 for a person to play a machine must be
displayed on the machine face under glass or on an unremovable plate on the front exterior of the
machine.
Source: 16 SDR 27, effective August 18, 1989; 17 SDR 51, effective October 8, 1990; 29 SDR
176, effective June 30, 2003; 37 SDR 215, effective May 31, 2011; 39 SDR 100, effective
December 5, 2012; 39 SDR 220, effective June 26, 2013; 49 SDR 51, effective November 27,
2022.
General Authority: SDCL 42-7A-21(10).
Law Implemented: SDCL 42-7A-1(16), 42-7A-21, 42-7A-37, 42-7A-38.
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48:02:10:03. Availability of training. Manufacturers and distributors shall notify operators who
have either purchased or expressed interest in purchasing their machines at least three weeks in
advance of scheduled training programs. Training programs to qualify as a Type I technician must
be scheduled at locations and times within the state to accommodate persons needing training. This
rule does not mandate the scheduling of training programs at the location of each business licensed
as an operator. Training may be conducted at the manufacturer's and distributor's principal place
of business or at other locations to accommodate persons applying to qualify as a Type I technician.
Training programs to qualify as a Type II technician are held within the state of South Dakota with
lottery personnel assisting the manufacturer or distributor in the training shall be coordinated with
the lottery. Training for Type II technicians shall be scheduled to accommodate persons needing
qualification. Manufacturers and distributors must provide subsequent training and inform
operators and the lottery of new developments in the service and repair of its machines.
Source: 16 SDR 27, effective August 18, 1989; 21 SDR 219, effective June 26, 1995; 49 SDR
51, effective November 27, 2022.
General Authority: SDCL 42-7A-21(11)(13).
Law Implemented: SDCL 42-7A-21.
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48:02:10:04. Training requirements. The manufacturer, and distributor, or lottery shall
administer an examination at the conclusion of the training and recommend for qualification as a
Type I or Type II technician each person who successfully completes the training. The lottery shall
administer an examination at the conclusion of the training for Type II technicians and qualify
each person as a Type II technician who successfully completes the training and examination.
Manufacturers and distributors shall maintain a list of the names of operators, employees, and
service agents who attend and successfully complete each training and shall submit the list and
examinations to the lottery. The list must show the name of the person who completed the training;
the type of technician; the date and location of the training; and the manufacturer's name and
machine model for which training was provided.
Source: 16 SDR 27, effective August 18, 1989; 21 SDR 219, effective June 26, 1995; 49 SDR
51, effective November 27, 2022.
General Authority: SDCL 42-7A-21(11)(13).
Law Implemented: SDCL 42-7A-21.
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48:02:10:07. Maintenance log forms required. A written maintenance log shall be kept in
each video lottery machine located within the main cabinet access area. Every person, including
lottery personnel, who gains entry into any internal space of a video lottery machine must sign
the log, indicate the time and date of entry, indicate the mechanical meter readings, and list the
areas inspected or repaired. The maintenance log forms must be obtained through the lottery and
retained by operators for a period of three years from the date of the last entry. The maintenance
logs must be available for inspection by the lottery upon request, Repealed.
Source: 16 SDR 27, effective August 18, 1989.
General Authority: SDCL 42-7A-21(11) to 42-7A-21(13).
Law Implemented: SDCL 42-7A-21(11) to 42-7A-21(13).
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48:02:12:02. Method of payment. The management of each licensed establishment shall
designate employees authorized to redeem ticket vouchers during the hours of operation. Credits
must be immediately paid in cash or by check when a player presents a valid ticket voucher for
payment before the close of the business day. No credits may be paid in tokens, chips, or
merchandise.
Source: 16 SDR 27, effective August 18, 1989; 49 SDR 51, effective November 27, 2022.
General Authority: SDCL 42-7A-21(3).
Law Implemented: SDCL 42-7A-21, 42-7A-34, 42-7A-37(5).
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48:02:12:03. Restrictions on payment of credits. Establishments may only redeem ticket
vouchers for credits awarded on video lottery machines located on its premises. A ticket voucher
must be presented for payment before the close of the business on the date the ticket voucher was
printed day. The lottery, the commission, and the state of South Dakota are not liable for the
payment of credits on valid winning ticket vouchers.
Source: 16 SDR 27, effective August 18, 1989; 49 SDR 51, effective November 27, 2022.
General Authority: SDCL 42-7A-21(3).
Law Implemented: SDCL 42-7A-21, 42-7A-34.