Video Lottery Terminal
Encyclopedia
A Video Lottery Terminal or VLT is a gaming
machine that allows gamblers to bet on the outcome of a video game.
A VLT is similar to a slot machine
, in that each terminal is a stand-alone device containing a random-number generator. Each terminal is connected to a centralized computer system
that allows the lottery jurisdiction to monitor game play and collect its share of revenue.
The outcome of each wager on a VLT is random. VLT operators are not able to program the total amount wagered, or payouts, through the central computer system. A minimum percentage payout usually is written into that jurisdiction's law. That percentage is realized not by manipulation of the game, but by adjusting the expected overall payout.
Some lottery devices that appear to be VLTs actually are computerized scratch-off lottery
tickets, as the terminal does not contain a random number generator (RNG); the results that are displayed are controlled by the central computer. These devices display results from a fixed pool.
was the first province
to introduce VLTs. They were introduced in the early 1990s, and as of 2005 all province
s, except British Columbia
and Ontario
, permit VLTs due to the massive revenues they generate. Ontario
has recently passed legislation that could allow VLTs in the near future. VLTs are located in licenced establishments that are not accessible to minor
s.
The prevalence of VLTs in Canada
has prompted criticism both domestically and abroad. Some critics contend that the massive social costs brought on by VLTs actually cause the provinces to lose a greater sum than is generated by the machines. VLTs are accepted by the majority of the Canadian population however because any harm associated with VLTs is theoretically isolated with the abuser.
The payouts offered by VLTs are invariably poor. For example, in Las Vegas
some high denomination slot machines offer a theoretical payout of approximately 98 cents for every dollar they take in (98%) with 75% returns found on penny and nickel machines in areas of no competition. By contrast, Canadian VLTs pay out 74% of their intake, on average. In Saskatchewan
, the VLTs pay out 93% of total cash in.
became, on October 16, 1989, the first U.S. jurisdiction to legalize VLTs. In a unique arrangement with private industry, the machines are owned by private companies but monitored by the South Dakota Lottery
via a centralized computer system that assures the integrity of the games. South Dakota imposes a substantial tax
on the net income
(gross income
minus player winnings) of the games. Beginning in 1992, four attempts were made to repeal South Dakota's video lottery; all were widely rejected by public votes. Most recently, in May 2006, petitions were filed containing over 21,000 signatures in order to place the issue on the November ballot; voters again agreed to keep video lottery, by a 66%-34% margin.
Other US jurisdictions which have had legal video lottery include Oregon, South Carolina (formerly), Rhode Island
, Delaware
, New York
, West Virginia
, Louisiana
, Maryland
, and Montana
. Of these, Delaware
, Rhode Island
, and West Virginia
formerly participated in a shared VLT game, Cashola
.
The U.S. Virgin Islands also has a legalized video lottery, managed by Southland Gaming of the Virgin Islands. The local governments in St. Thomas and St. John use the funds generated by the video lottery to fund various government programs on the islands; primarily focusing on educational efforts.
introduced the concept of racino
s when it allowed MTR Gaming Group
to add VLTs to Mountaineer Race Track & Gaming Resort
in Chester
.
Racino
s differ from traditional VLTs in that all video lottery games are played on a Class II gaming machine. Class II games are played in a traditional Bingo format.
Other states that have legalized Class II VLTs in racino
s are Delaware
, Rhode Island
, Louisiana
, New York
, and West Virginia
.
, VLT-type poker, keno and bingo machines are legal to operate in the private sector. Since the 1970s, Montana was the first state, other than Nevada and New Jersey, to legalize machine gaming.
Keno and Bingo machines were first introduced in Montana in 1975. Although subject to legal challenge, these machines were deemed legal in 1976 after the Montana Supreme Court ruled in favor of Treasure State Games, a private company that brought the first games of this type to the state. (See Justia.com - Treasure State Games v. State of Montana)
Unlike in other States, the gaming devices are not under the jurisdiction of the State lottery. In 2011 the State legislature added another class of games, so-called "line games", to the list of approved games.
All establishments licensed for the on-premise consumption of alcohol within the State of Montana are allowed to operate such machines provided they have the correct permits. In addition, there are some Montana establishments (such as some truck stops) that do not possess "on-sale" licenses but hold "grandfather" licenses allowing them to operate gaming machines.
The maximum prize awarded on these machines is $800, with a maximum bet of $2 per hand. The legal age to gamble in Montana is 18, although people under the age of 21 cannot gamble in bars.
As in Louisiana
, the games in Montana are not technically part of its lottery.
and South Dakota
employ Class III gaming technology into their VLT games. The devices operated in Montana are also Class III machines, but as they are not connected to the Montana Lottery are technically not "video LOTTERY terminals". This means that unlike any of the Class II states, Oregon and South Dakota lottery players compete against a house edge rather than other lottery players. This is the same type of gaming offered in Nevada
, Connecticut
and Atlantic Cityas well as in the majority of tribal casinos. Currently, the state of Oregon offers its players a 91-95% payout on each of its games. South Dakota and Montana law specifies that payouts must be greater that 80%, although in reality actual payouts in these two jurisdictions are around 88 - 92%.
Most US jurisdictions do not allow VLTs and those that do have attracted the same criticism the Canadian provinces have. However, some non-players have expressed tolerance for the machines.
Gambling
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods...
machine that allows gamblers to bet on the outcome of a video game.
A VLT is similar to a slot machine
Slot machine
A slot machine , informally fruit machine , the slots , poker machine or "pokies" or simply slot is a casino gambling machine with three or more reels which spin when a button is pushed...
, in that each terminal is a stand-alone device containing a random-number generator. Each terminal is connected to a centralized computer system
Centralized system
In telecommunications, a centralized, or centralised system, is one in which most communications are routed through one or more major central hubs. Such a system allows certain functions to be concentrated in the system's hubs, freeing up resources in the peripheral units...
that allows the lottery jurisdiction to monitor game play and collect its share of revenue.
The outcome of each wager on a VLT is random. VLT operators are not able to program the total amount wagered, or payouts, through the central computer system. A minimum percentage payout usually is written into that jurisdiction's law. That percentage is realized not by manipulation of the game, but by adjusting the expected overall payout.
Some lottery devices that appear to be VLTs actually are computerized scratch-off lottery
Lottery
A lottery is a form of gambling which involves the drawing of lots for a prize.Lottery is outlawed by some governments, while others endorse it to the extent of organizing a national or state lottery. It is common to find some degree of regulation of lottery by governments...
tickets, as the terminal does not contain a random number generator (RNG); the results that are displayed are controlled by the central computer. These devices display results from a fixed pool.
Canada
New BrunswickNew Brunswick
New Brunswick is one of Canada's three Maritime provinces and is the only province in the federation that is constitutionally bilingual . The provincial capital is Fredericton and Saint John is the most populous city. Greater Moncton is the largest Census Metropolitan Area...
was the first province
Provinces and territories of Canada
The provinces and territories of Canada combine to make up the world's second-largest country by area. There are ten provinces and three territories...
to introduce VLTs. They were introduced in the early 1990s, and as of 2005 all province
Provinces and territories of Canada
The provinces and territories of Canada combine to make up the world's second-largest country by area. There are ten provinces and three territories...
s, except British Columbia
British Columbia
British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...
and Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
, permit VLTs due to the massive revenues they generate. Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
has recently passed legislation that could allow VLTs in the near future. VLTs are located in licenced establishments that are not accessible to minor
Minor (law)
In law, a minor is a person under a certain age — the age of majority — which legally demarcates childhood from adulthood; the age depends upon jurisdiction and application, but is typically 18...
s.
The prevalence of VLTs in Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
has prompted criticism both domestically and abroad. Some critics contend that the massive social costs brought on by VLTs actually cause the provinces to lose a greater sum than is generated by the machines. VLTs are accepted by the majority of the Canadian population however because any harm associated with VLTs is theoretically isolated with the abuser.
The payouts offered by VLTs are invariably poor. For example, in Las Vegas
Las Vegas Strip
The Las Vegas Strip is an approximately stretch of Las Vegas Boulevard in Clark County, Nevada; adjacent to, but outside the city limits of Las Vegas proper. The Strip lies within the unincorporated townships of Paradise and Winchester...
some high denomination slot machines offer a theoretical payout of approximately 98 cents for every dollar they take in (98%) with 75% returns found on penny and nickel machines in areas of no competition. By contrast, Canadian VLTs pay out 74% of their intake, on average. In Saskatchewan
Saskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
, the VLTs pay out 93% of total cash in.
United States
South DakotaSouth Dakota Lottery
The South Dakota Lottery is run by the government of South Dakota. It is a member of the Multi-State Lottery Association . The Lottery is headquartered in Pierre; it is a self-funded endeavor...
became, on October 16, 1989, the first U.S. jurisdiction to legalize VLTs. In a unique arrangement with private industry, the machines are owned by private companies but monitored by the South Dakota Lottery
South Dakota Lottery
The South Dakota Lottery is run by the government of South Dakota. It is a member of the Multi-State Lottery Association . The Lottery is headquartered in Pierre; it is a self-funded endeavor...
via a centralized computer system that assures the integrity of the games. South Dakota imposes a substantial tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
on the net income
Net income
Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings...
(gross income
Gross income
Gross income in United States tax law is receipts and gains from all sources less cost of goods sold. Gross income is the starting point for determining Federal and state income tax of individuals, corporations, estates and trusts, whether resident or nonresident."Except as otherwise provided" by...
minus player winnings) of the games. Beginning in 1992, four attempts were made to repeal South Dakota's video lottery; all were widely rejected by public votes. Most recently, in May 2006, petitions were filed containing over 21,000 signatures in order to place the issue on the November ballot; voters again agreed to keep video lottery, by a 66%-34% margin.
Other US jurisdictions which have had legal video lottery include Oregon, South Carolina (formerly), Rhode Island
Rhode Island Lottery
The Rhode Island Lottery is run by the government of Rhode Island. It is a charter member of the Multi-State Lottery Association . Rhode Island Lottery games include Mega Millions, Powerball, Wild Money, keno, and numerous scratch tickets...
, Delaware
Delaware Lottery
The Delaware Lottery is run by the government of Delaware. Unlike most US lotteries, Delaware offers video lottery; its other games include Mega Millions, Powerball, Cash 5, Play 3, and Play 4....
, New York
New York Lottery
The New York Lottery began in 1967 as the third modern U.S. lottery, after Puerto Rico's began in 1934, and New Hampshire's in 1964. It provides revenue for public education, and is based in Schenectady.-History:...
, West Virginia
West Virginia Lottery
The West Virginia Lottery is run by the government of West Virginia. It is a charter member of the Multi-State Lottery Association . It offers games such as Powerball, Mega Millions, and scratch tickets...
, Louisiana
Louisiana Lottery (modern)
- History :The Louisiana Lottery Corporation began in 1991, after the 1990 Louisiana legislature proposed a government-run lottery as a way to generate revenue without increasing taxes...
, Maryland
Maryland Lottery
The Maryland Lottery is an independent agency of the Maryland government. Its games include Mega Millions, Powerball, Multi-Match, Keno, Bonus Match 5, and numerous scratch tickets. The Maryland Lottery is headquartered in Suite 330 at 1800 Washington Boulevard, in Montgomery Business Park,...
, and Montana
Montana Lottery
The Montana Lottery is run by the government of Montana. It is a member of the Multi-State Lottery Association . The Montana Lottery has a large number of games, such as scratch tickets, Powerball, Hot Lotto, Wild Card 2, and Montana Cash....
. Of these, Delaware
Delaware
Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
, Rhode Island
Rhode Island
The state of Rhode Island and Providence Plantations, more commonly referred to as Rhode Island , is a state in the New England region of the United States. It is the smallest U.S. state by area...
, and West Virginia
West Virginia
West Virginia is a state in the Appalachian and Southeastern regions of the United States, bordered by Virginia to the southeast, Kentucky to the southwest, Ohio to the northwest, Pennsylvania to the northeast and Maryland to the east...
formerly participated in a shared VLT game, Cashola
Cashola
Ca$hola, a video lottery game, is a former Multi-State Lottery Association game. Ca$hola was, to date, the only US multi-jurisdictional video lottery game. It began in July 2006; Ca$hola ended upon its final jackpot win on May 15, 2011...
.
The U.S. Virgin Islands also has a legalized video lottery, managed by Southland Gaming of the Virgin Islands. The local governments in St. Thomas and St. John use the funds generated by the video lottery to fund various government programs on the islands; primarily focusing on educational efforts.
Class II Gaming (Racinos)
In 1990, West VirginiaWest Virginia
West Virginia is a state in the Appalachian and Southeastern regions of the United States, bordered by Virginia to the southeast, Kentucky to the southwest, Ohio to the northwest, Pennsylvania to the northeast and Maryland to the east...
introduced the concept of racino
Racino
A racino is a combined race track and casino. In some cases, the gambling is limited to slot machines, but many locations are beginning to include table games such as blackjack, poker, and roulette....
s when it allowed MTR Gaming Group
MTR Gaming Group
MTR Gaming Group Inc. is a hospitality company based in Chester, West Virginia. The company holds, mostly through several subsidiaries, hotels, casinos and sports facilities...
to add VLTs to Mountaineer Race Track & Gaming Resort
Mountaineer Race Track & Gaming Resort
Mountaineer Casino, Racetrack and Resort is a thoroughbred racetrack and casino resort located southwest of Chester, West Virginia , and owned by MTR Gaming Group.-History and information:...
in Chester
Chester, West Virginia
Chester is a city in Hancock County, West Virginia, United States, along the Ohio River. It is part of the Weirton–Steubenville, WV-OH Metropolitan Statistical Area. The population was 2,592 at the 2000 census. Chester was established in 1896, but not incorporated until 1907. The city is...
.
Racino
Racino
A racino is a combined race track and casino. In some cases, the gambling is limited to slot machines, but many locations are beginning to include table games such as blackjack, poker, and roulette....
s differ from traditional VLTs in that all video lottery games are played on a Class II gaming machine. Class II games are played in a traditional Bingo format.
Other states that have legalized Class II VLTs in racino
Racino
A racino is a combined race track and casino. In some cases, the gambling is limited to slot machines, but many locations are beginning to include table games such as blackjack, poker, and roulette....
s are Delaware
Delaware
Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
, Rhode Island
Rhode Island
The state of Rhode Island and Providence Plantations, more commonly referred to as Rhode Island , is a state in the New England region of the United States. It is the smallest U.S. state by area...
, Louisiana
Louisiana
Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...
, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, and West Virginia
West Virginia Lottery
The West Virginia Lottery is run by the government of West Virginia. It is a charter member of the Multi-State Lottery Association . It offers games such as Powerball, Mega Millions, and scratch tickets...
.
Non-Lottery
In MontanaMontana
Montana is a state in the Western United States. The western third of Montana contains numerous mountain ranges. Smaller, "island ranges" are found in the central third of the state, for a total of 77 named ranges of the Rocky Mountains. This geographical fact is reflected in the state's name,...
, VLT-type poker, keno and bingo machines are legal to operate in the private sector. Since the 1970s, Montana was the first state, other than Nevada and New Jersey, to legalize machine gaming.
Keno and Bingo machines were first introduced in Montana in 1975. Although subject to legal challenge, these machines were deemed legal in 1976 after the Montana Supreme Court ruled in favor of Treasure State Games, a private company that brought the first games of this type to the state. (See Justia.com - Treasure State Games v. State of Montana)
Unlike in other States, the gaming devices are not under the jurisdiction of the State lottery. In 2011 the State legislature added another class of games, so-called "line games", to the list of approved games.
All establishments licensed for the on-premise consumption of alcohol within the State of Montana are allowed to operate such machines provided they have the correct permits. In addition, there are some Montana establishments (such as some truck stops) that do not possess "on-sale" licenses but hold "grandfather" licenses allowing them to operate gaming machines.
The maximum prize awarded on these machines is $800, with a maximum bet of $2 per hand. The legal age to gamble in Montana is 18, although people under the age of 21 cannot gamble in bars.
As in Louisiana
Louisiana
Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state in the U.S. with political subdivisions termed parishes, which are local governments equivalent to counties...
, the games in Montana are not technically part of its lottery.
Class III Video Lottery
Currently, only OregonOregon
Oregon is a state in the Pacific Northwest region of the United States. It is located on the Pacific coast, with Washington to the north, California to the south, Nevada on the southeast and Idaho to the east. The Columbia and Snake rivers delineate much of Oregon's northern and eastern...
and South Dakota
South Dakota
South Dakota is a state located in the Midwestern region of the United States. It is named after the Lakota and Dakota Sioux American Indian tribes. Once a part of Dakota Territory, South Dakota became a state on November 2, 1889. The state has an area of and an estimated population of just over...
employ Class III gaming technology into their VLT games. The devices operated in Montana are also Class III machines, but as they are not connected to the Montana Lottery are technically not "video LOTTERY terminals". This means that unlike any of the Class II states, Oregon and South Dakota lottery players compete against a house edge rather than other lottery players. This is the same type of gaming offered in Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
, Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
and Atlantic Cityas well as in the majority of tribal casinos. Currently, the state of Oregon offers its players a 91-95% payout on each of its games. South Dakota and Montana law specifies that payouts must be greater that 80%, although in reality actual payouts in these two jurisdictions are around 88 - 92%.
Most US jurisdictions do not allow VLTs and those that do have attracted the same criticism the Canadian provinces have. However, some non-players have expressed tolerance for the machines.
Other terminology
In certain jurisdictions, VLTs are known as Video Gaming Devices (VGD) or Video Slot Machines. Most VLTs are multi-game devices, allowing the players to select, from an on-screen menu, the game(s) they wish to play. They are also known as poker machines and fruit machines in some areas.External links
- Euromat - the European Gaming and Amusement Federation represents the amusement machine industry as a leisure industry division at the European level.
- VLTs: Nova Scotia's Billion Dollar Gamble An investigative website on VLTs in the Canadian province of Nova Scotia prepared by University of King's College students.