Deadwood casinos might be too financially hurt by COVID-19 to re-license all devices by July 1

Capitol News Bureau
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DEADWOOD, S.D. (KELO) — The South Dakota Commission on Gaming will decide Tuesday whether to adopt a special policy that would let Deadwood casinos delay re-licensing some gambling devices.

Susan Christian, the commission’s executive secretary, has recommended allowing unlicensed devices on the gaming floors through December 31 so long as they can’t be used.

Mike Rodman, executive director for the Deadwood Gaming Association, made the request in a June 8 letter.

He asked for the unlicensed period to be through September 30.

The Deadwood City Commission, responding to COVID-19, shut down gaming establishments in the community on March 25 through May 6.

His letter said the closure led to “a loss of gaming revenue to casino operators of approximately $10 million dollars and several million more in lost hotel, food and beverage revenues.”

He continued, “Operators continued to incur most of the expenses without the income, creating
extreme financial hardships that continue today. Many operators simply do not have the
available resources to re-license all of their currently licensed devices at this time, but hope to be
able to as business returns over the summer months.”

Rodman told KELOLAND News on Monday he didn’t know how many operators might let devices go temporarily unlicensed. He said unofficial surveys indicated earlier that 20 to 25% of devices might be affected July 1.

Deadwood finished fiscal 2019 with more than 2,900 slots and nearly 90 poker, blackjack, roulette and craps games. The 2020 fiscal year ends June 30.

“Hopefully, with the tourism numbers slowly improving, perhaps that impact will not be so severe,” Rodman said in an email.

His understanding is that Governor Kristi Noem has been working to establish another COVID-19 relief fund for businesses that would use federal aid. A spokesman for her office hadn’t yet responded to an inquiry from KELOLAND News about it at the time of this writing.

“The DGA is asking for flexibility in these unprecedented times for the benefit of the industry and its employees and to maximize the potential number of devices relicensed to generate revenues for state and local governments,” Rodman said.

Executive director Christian drafted a temporary policy that cited “the economic downturn caused by the shutdown of casinos during the COVID-19 pandemic, and in recognition of industry’s belief that such devices may be licensed sometime during FY2021 as funds become available, and also recognizing that no statutory provision or administrative rule directly addresses this situation.”

The policy would require:

— Slot machines be physically disconnected from the slot-management system, be unplugged from power, be inspected and sealed by commission staff using commission tape and seals, and commission staff be present when the seal is broken;

— Table games have detachable items removed, non-detachable items locked and sealed, and be inspected and sealed by commission staff using commission tape and seals;

— Each device must have a sign or card saying it out of service and is unavailable for play; and

— A licensee must notify the commission office in writing of the intention to re-activate the device and place it into play, and pay the taxes for that game, and have commission staff present for a re-inspection and unsealing.

The final point: “After December 31, 2020 all machines that do not bear the proper license stamp will be required to be removed from the floor.”

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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