The Rise of Video Lottery Terminals (VLTs)

The rise of Video Lottery Terminals (VLTs) marks a significant divergence in video poker's evolution, splitting the game into two distinct technical lineages: the standalone casino machine (Class III) and the centralized lottery terminal.

Origins: South Dakota 1989

VLTs emerged in South Dakota in 1989 as a response to a specific problem: how to regulate and tax gray-market gaming machines that had proliferated in bars and convenience stores.

The solution was elegant: bring these machines under state lottery control, using central servers to:

Monitor all gaming activity

Ensure regulatory compliance

Collect accurate tax revenue

Control game outcomes

The Central Determination System

Unlike traditional casino video poker, VLTs utilize a Central Determination System (CDS):

How It Works

Player initiates a game on the terminal

Terminal requests outcome from central server

Server determines result (often using finite-pool mathematics)

Outcome is transmitted to terminal

Terminal displays appropriate visual result

The Key Difference

In a Class III casino machine, each hand is an independent event—the RNG on the machine determines the outcome at the moment of play.

In a VLT, the outcome may be:

Predetermined by the central server

Based on a finite pool of outcomes

Part of a linked game system

The Racino Phenomenon

VLTs enabled the "Racino" concept—slot-style gaming at horse racing tracks:

States could authorize VLTs without full casino gambling

Racing facilities gained additional revenue streams

VLTs spread to bars, restaurants, and convenience stores

This architecture allowed widespread distribution across North America, reaching locations that would never receive traditional casino licenses.

Video Poker on VLTs

VLT versions of video poker look identical to casino versions but operate fundamentally differently:

AspectCasino (Class III)VLTOutcome determinationLocal RNGCentral serverProbabilitiesFixed (52-card deck)May be finite poolIndependenceEach hand independentMay be linkedStrategy impactSignificantVaries/may be none

The Skill Question

Traditional video poker strategy assumes a standard 52-card deck with known probabilities. VLT video poker may not comply with these assumptions:

Finite Pool Mathematics

Some VLT systems use finite outcome pools:

A predetermined number of wins and losses

Outcomes distributed across terminals

Pool replenishes periodically

In such systems, strategy is rendered ineffective—the outcome is determined before you make any decision.

Central Draw Systems

Other VLT systems determine outcomes through:

Centralized lottery-style draws

Bingo-pattern matching

Predetermined result sequences

Regulatory Framework

VLTs operate under lottery commission oversight rather than gaming commission control:

Different testing standards than casino machines

State-specific regulations

Integration with lottery prize structures

Often shared revenue models

Player Implications

For players accustomed to casino video poker:

Strategy may not apply—verify whether the VLT uses standard deck mathematics

RTP may differ—VLT paytables often return less than casino equivalents

Game independence may not exist—outcomes might be predetermined

The Fundamental Divergence

VLTs represent a philosophical split from traditional video poker:

Casino Video Poker: A skill-influenced game with transparent mathematics

VLT Video Poker: A lottery product with video poker aesthetics

While they may look identical, they are fundamentally different products serving different regulatory and economic purposes.

Understanding this distinction is crucial for any player who travels between casino and VLT jurisdictions, as the skills developed in one environment may be worthless in the other.