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Video lottery terminal

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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, except that it is connected to a centralized computer system that determines the outcome of each wager using a random number generator. Although the outcome of each wager is random, VLT operators are able to program in advance the total amount and number of payouts that its central computer system will allow at its connected VLTs. In this manner, VLTs can be thought of as computerized scratch-off lottery tickets.

Canada

New Brunswick was the first province to introduce VLTs. They were introduced in the early 1990s, and as of 2005 all provinces, except British Columbia and Ontario, permit VLTs due to the massive revenues they generate. Ontario has recentlly passed legislation that could allow VLTs in the near future. VLTs are located in licenced establishments that are not accessible to minors.

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.

United States

South Dakota became, on October 16, 1989, the first U.S. State 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. The state imposes a substantial tax on the Net Income (Gross Income minus any player winnings) of the games. Beginning in 1992, four attempts have been made to repeal South Dakota's video lottery; all were widely rejected by a public vote. Most recently, in May 2006, petitions were filed containing over 21,000 signatures in order to place the issue on the November ballot. On November 7, 2006, South Dakota voters once again voted to keep video lottery, this time by a large 66%-34% margin.

Other states which have or have had some form of legalized 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, each a member of the Multi-State Lottery Association (MUSL), participate in a shared VLT game, Cashola.

The United States 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 Virginia introduced the concept of racinos when it allowed MTR Gaming Group to add VLTs to Mountaineer Race Track & Gaming Resort in Chester.

Racinos 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 racinos are Delaware, Rhode Island, Louisiana, New York, and West Virginia.

Non-Lottery

In Montana, VLT poker machines are legal to operate in the private sector. This means that any and all card rooms within the state are allowed to operate such machines provided they have the correct permits. 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.

In Louisiana, the games are not technically part of its lottery.

Class III Video Lottery

Currently, only Oregon and South Dakota employ Class III gaming technology into their VLT games. 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 City. Currently, the state of Oregon offers its players a 91-95% payout on each of its games. South Dakota offers an 88% payout.

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.

See also

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