DEADWOOD, S.D. (KELO) — The South Dakota Gaming Commission has decided a Deadwood casino should be penalized $5,000 for allowing two under-aged people to gamble and be in the casino’s gaming area for more than three hours.

B.Y. Development, doing business as Cadillac Jack’s Gaming Resort, has until February 1, 2023, to pay. The commission could have levied a penalty up to $100,000 and taken the casino’s license.

State law requires people be at least 21 years old to gamble in Deadwood casinos. Cadillac Jack’s had 14 previous incidents of under-aged gambling in the past six years, according to Doug Abraham, an attorney for the commission.

The commission had planned a public hearing on proposed rule changes regarding under-aged people that was to be held as part of its meeting on December 14.

But the hearing was put off indefinitely when the commission, because a winter storm was expected, rescheduled the meeting to Wednesday.

The commission and Deadwood’s casinos have been trying for months to find ways to reduce under-aged gambling.

Rapid City attorney Roger Tellinghuisen represented Cadillac Jack’s at its disciplinary hearing Wednesday. He acknowledged he didn’t plan to offer much of an opening statement.

“We’re not going to dispute it,” Tellinghuisen told the commission. “Under-age gaming occurs. We know that.”

One of the commission’s special agents, Brandon Snyder, said the casino’s video surveillance showed multiple people were near the two men multiple times throughout the three hours and 26 minutes they were in the gaming area before they were taken into custody by casino personnel.

David Schneiter, the resort’s general manager, said Cadillac Jack’s had taken steps regarding under-aged people before the October 30 incident, such as putting up signs in English and Spanish throughout the property and providing training for staff.

Schneiter said Cadillac Jack’s has since hired four people whose sole responsibility is to check ages. “That’s had a positive effect,” he said.

Other steps that have been done or are in progress include development of training manuals, putting stickers on every machine, developing a stronger video-surveillance system, sending a memo to all supervisors stressing the need for staff to pay closer attention, and adding the word “Security” on the fronts and backs of ID-checkers’ shirts.

Schneiter said he reviewed the October 30 video. “It could have been avoided a lot sooner than it was — in the first ten minutes,” he said.

Disciplinary letters were put in the personnel files for several staff who didn’t pay close enough attention on October 30, while a $200 bonus was paid to the cocktail server who discovered the two men weren’t old enough.

Told by Abraham that 14 under-age incidents had been reported to the commission in the past six years for Cadillac Jack’s, Schneiter responded, “We’ve got to do something better.”

But Schneiter said checking every person’s age at the door would be “a cumbersome task,” in part because the casino has more than a dozen ways to enter.

Commissioner Spencer Hawley of Brookings suggested that casinos city-wide use a wristband system, with a different color each night. Tellinghuisen said both wristbands and hand-stamps have been in discussion.

“It seems like a natural to me,” Hawley said. “If you got a band, you know it’s checked.”

Another witness was Edward Jones, the casino’s floor supervisor October 30. Jones said he walked by the under-aged players multiple times. “I assumed they were part of that construction crew,” Jones said. “I was wrong.”

The under-aged players were considered by most of the Cadillac Jack’s staff to have been part of a group of workers from Mexico who frequently ate at a restaurant there.

Jones said a third man was with the two part of the time. The third man hit a jackpot and Jones carded him as part of filling out an IRS winnings report.

Jones admitted he was too lax with the two who were found later to be too young. Jones was one of the staff-written up for it.

“My job is to card (check ages) and make sure the floor is secure,” Jones said. He’s changed his approach since October 30. “Even if I assume I know them, I go card them. I don’t make assumptions anymore,” he said.

Commission attorney Abraham said the three hours and 26 minutes were “an extremely long duration of underaged gambling.” He said it was “offensive” that nearly all of the Cadillac Jack’s staff on duty in the gaming area assumed the two under-aged men were part of the construction crew and were at least age 21.

Abraham said imposing the maximum fine of $100,000 wouldn’t be appropriate but there should be “a significant penalty” reflecting the seriousness of the offense.

Said Tellinghuisen, “We know a fine’s coming. We just know it.” He asked the state court administrator how many tickets had been issued in the past five-plus fiscal years for under-aged gambling.

The answer was one ticket in 2018, three in 2019, one in 2020, one in 2021, two in 2022 and three in the six months so far of 2023. (State fiscal years run July 1-June 30.)

“We’re not ticketing the offenders the same way we’re penalizing the casinos,” Tellinghuisen argued.

Cadillac Jack’s efforts to reduce under-aged betting and loitering should be recognized, said Tellinghuisen, who called it “fantasy” for the commission and regulatory staff to expect no under-aged gaming.

“It’s going to happen,” he said. 

In a separate matter, the commission also revoked the gaming support license of Mathew Steinlicht of Lead for placing illegal proxy bets on sporting events on at least five occasions by under-aged kitchen staff at Mustang Sally’s.

Steinlicht, who had invoked his Fifth Amendment constitutional right to silence so as to not incriminate himself, didn’t appear before the commission Wednesday. Neither did his lawyer, Timothy Rensch from Rapid City.

Steinlicht had already voluntarily surrendered the license, but Abraham said a revocation would red-flag any future licensing attempt. Abraham didn’t recommend a financial penalty. He said the behavior came to light as part of a separate investigation into proxy bets at Mustang Sally’s.