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South Dakota State Lotteries Laws

Most states operate an official state lottery as a means of generating revenue. Lotteries offer players a very small chance of winning millions in exchange for a small wager, although most lotteries also have "scratch-off" games with smaller prizes and better odds. In any event, they don't require any particular skill and are made available throughout the respective state. Lotteries typically are created through legislation or ballot initiatives and involve a fair amount of regulation.

Where Do Lottery Revenues Go?

Most state lotteries are used to fund public education or other specific public needs, but sometimes revenue goes directly to the state's general fund. Some states participate in nationwide lotteries (such as Megamillions), which tend to have extremely high jackpots.

South Dakota Lotteries

In South Dakota, there are several forms of lottery games including scratch tickets, Powerball, Mega Millions, Dakota Cash, Wild Card 2, Lotto and Video Lottery.

Legal Age to Play the Lottery

Anyone 18 years or older can legally purchase a South Dakota Lottery ticket. However, only persons who are 21 years old and over can play Video Lottery.

State Lottery and Taxes

The Lottery is required by the Internal Revenue Service (IRS) to withhold 25 percent from prizes of more than $5,000. The State of South Dakota does not tax Lottery winnings. Additionally, the Hot Lotto jackpot is now paid in a lump sum cash payment with all initial withholding taxes paid.

Where Do The Lottery Funds Go?

The South Dakota Lottery funds education, lowers property taxes , and develops natural resources.

Counterfeit Lottery Tickets

Thinking you can make a quick buck by counterfeiting lottery tickets? Think again. Any person who, with intent to defraud, falsely makes, alters, forges, passes, or counterfeits a lottery ticket issued by the South Dakota Lottery is guilty of a Class 6 felony .

The basics of South Dakota state lottery laws are detailed in the following table, with links to related articles.See South Dakota Consumer Tax Laws and South Dakota Personal Income Tax Laws to learn more.

Code Section 42-7A-1, et seq.
Distribution of Lottery Revenue Expenses and prizes (approx. 50%) from lottery operating fund; net proceeds to state general fund; state corrections facility construction fund, and state capital construction fund (lottery expenses may not exceed amount of net proceeds to these funds) Video lottery income directly deposited in state property tax reduction fund. SDCL§42-7A-24
Additional Purpose of Lottery N/A
Lottery Prize Subject to Child Support Garnishment For prizes in excess of $100, liability setoff program to satisfy debts owed or collected through state agencies (child support payments have priority)
Time Limit to Claim Prize/Disposition One (1) year or period deemed appropriate by executive director/added to prize pools of subsequent lottery games
Prohibited Related Activities Counterfeiting lottery tickets; sale at greater price; sales to minors

Note: South Dakota lottery laws are constantly changing -- contact a South Dakota gaming attorney or conduct your own legal research to verify the state law(s) you are researching.

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