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November 10, 2011 I Volume 51 No. 21 Zoning Bulletin Preemption —City Ordinance Regulates the Location of Video Lottery Machines Business operator challenges ordinance, saying it is preempted by state's video lottery scheme Citation: Law v. City of Sioux Falls, 2011 SD 63, 2011 AIL 4395979 (S.D. 2011) SOUTH DAKOTA (09/21/11)—This case addresses the issue of whether the State of South Dakota intended to fully occupy the field of video lottery, to the exclusion of municipal regulation including zoning regulation of the placement of video lottery machines. The Background/Facts: Rick Law ( "Law ") sought to operate on -sale alcoholic beverage establishments with video lottery machines in the City of Sioux Falls (the "City"). The City's Ordinance 60 -80 required that an on -sale alcoholic beverage business seeking to place video lottery ma- chines in the establishment must meet certain location requirements and apply for a conditional use permit with the City Planning Commission. Law did not apply for a conditional use permit because he believed each of this proposed locations would fail under the requirements of Ordi- nance 60 -80. Instead, Law brought a declaratory action against the City. He asked the court to determine the constitutionality of Ordinance 60- 80. He alleged that the Ordinance was unconstitutional because the City had exceeded its authority in enacting the ordinance. He said this was because the State of South Dakota (the "State ") had fully occupied the field of video lottery regulation, preempting any municipal regulation. The City countered that Ordinance 60 -80 did not regulate video lot- tery, but was a zoning ordinance, enacted through a valid exercise of the City's police powers. The South Dakota Lottery intervened in the action, agreeing with Law's position. The circuit court also agreed with Law. The City appealed. The City argued that Ordinance 60 -80 was val- id because South Dakota law authorized the adoption of zoning ordi- nances that restrict the location and use of buildings for the "purpose of promoting health, safety, or the general welfare of the community." The City maintained that, among other things, Ordinance 60 -80 did not regulate video lottery, but controlled, through zoning, the location and use of buildings housing video lottery machines in order to protect the health, safety, and general welfare of City residents. DECISION: Affirmed. The Supreme Court of South Dakota rejected the City's argument and held that Ordinance 60 -80 was preempted by South Dakota's legislative 4 © 2011 Thomson Reuters