Casinos: Commercial Casinos - South Dakota

Commercial casino gambling in South Dakota is restricted to the town of Deadwood in Lawrence County. Deadwood, located approximately sixty miles from Mount Rushmore, is a rustic mountain town that was designated as a National Historic Landmark and is listed on both the National and South Dakota Register of Historic Places. The town features more than eighty historic casinos, with a total of 112 casinos in all. Games allowed are blackjack, poker, and slot machines.

The rocky history of gambling in Deadwood is described in The Last Gamble: Betting on the Future in Four Rocky Mountain Mining Towns by Katherine R. Jensen and Audie L. Blevins (Tucson, AZ: University of Arizona Press, 1998). The gold rush of 1876 brought large

FIGURE 4.8

numbers of people into the town, and it soon became packed with saloons and gambling halls. The town became associated with such notorious characters as Wild Bill Hickok, Poker Alice, and Calamity Jane.

Although gambling was outlawed in the Dakota Territory in 1881, it continued quite openly in Deadwood with the apparent complicity of the local sheriff. In 1907 gambling opponents complained that the town's gambling halls "operated as openly as grocery stores, running twenty-four hours a day." On a busy Saturday night in 1947, South Dakota's attorney general sent sixteen raiders into the bars of Deadwood to show the town that the state meant business. The blatant days of gambling were over in Deadwood, although locals say that the establishments continued to operate quietly for the next four decades.

In 1984 a group of Deadwood businessmen and community leaders began working to bring legalized gambling back to Deadwood, primarily to raise money to preserve the town's historic buildings. The group developed the slogan "Deadwood You Bet" and had it printed on hundreds of buttons. Despite widespread local support, though, the state's voters and legislators were not keen on the idea. It failed at the ballot box in 1984 and was voted down by the legislature in 1988. The measure made it onto the ballot anyway in November 1988 following a massive petition effort. In 1989 South Dakota voters approved limited-stakes casino gambling for Deadwood, making South Dakota the third state (after Nevada and New Jersey) to legalize casino gambling again. Originally, the casinos could only offer a $5 maximum bet. This limit was raised to $100 in 2000.

Deadwood's casinos are regulated by the South Dakota Commission on Gaming. According to the South Dakota Commission on Gaming Annual Report Fiscal Year 2004, Deadwood casinos pay an 8% gaming tax on their adjusted gross revenue and an annual fee of $2,000 per card game or slot machine. The gaming tax is allocated as follows: 50% to the Commission Fund, 40% to the Department of Tourism, and 10% to Lawrence County. The annual device fees also go into the Commission Fund.

In calendar year 2003, Deadwood casinos had total gross revenues of $70.4 million, a 6% increase from 2002. (See Figure 4.8.) South Dakota casino revenues held steady for most of the 1990s. Unlike casinos in many other states, however, they have experienced robust growth during the early twenty-first century. There were nearly three thousand licensed gambling devices and more than eighty table games operating in Deadwood during 2003. The average overall payout to patrons during December 2003 was 90%. Since the reintroduction of legalized casino gambling through December 2003, gross revenues totaled $669 million.

Nearly $5.5 million in gaming taxes was collected during 2003. Between 1989 and 2003 a total of nearly $52 million was collected. Of this amount $26 million went to the state's gaming commission fund, $21 million was allocated to promote tourism, and $5 million was turned over to Lawrence County.