This story has been updated to report the commission’s decisions.
DEADWOOD, S.D. (KELO) — A Deadwood casino and one of its top employees lost their licenses Wednesday for placing illegal proxy bets on sporting events through the casino and engaging in other related illegal activities.
The South Dakota Commission on Gaming went into executive session to consider allegations against Toby Keehn, the owner of Mustang Sally’s sports bar and casino in downtown Deadwood, and Jennifer Haefs of Lead.
The outcome was revocation of the casino’s and Haefs’ licenses and a $25,000 fine against Mustang Sally’s that must be paid by October 31.
Text messages, surveillance video and transaction records showed that Haefs placed bets for Keehn and others at Mustang Sally’s. Placing a proxy bet is a Class 6 felony punishable by up to two years imprisonment and a $4,000 fine or both.
State investigators found evidence of 95 proxy bets and other actions prohibited by state law, including an allegation that Keehn illegally extended credit and allegations that Keehn illegally placed bets for himself and others at his establishment. A gambling establishment or an employee extending credit is also a Class 6 felony.
“I’m incredibly sorry for my bad judgment,” Keehn told the commission, waiving his Fifth Amendment right to not incriminate himself.
Keehn, who’s held a gambling license for 34 years, acknowledged he “can’t undo it” and promised the commission, “It definitely would never happen again.”
Haefs didn’t testify.
Attorney Roger Tellinghuisen represented the two defendants. He said revoking Haefs’ gaming license would remove “the only choice” she has for meaningful employment. “She now understands that (she did something wrong),” Tellinghuisen said.
As for Keehn, taking away the casino’s retail license and sports-wagering license would close the establishment and put staff out of work, according to Tellinghuisen, who said Keehn and Haefs understood now they didn’t have a good legal defense and came hat in hand.
Losing their licenses could upend their lives in ways from which they might never recover, said Tellinghuisen, who asked for “compassion and consideration” from the commission.
“That’s really all I have to offer,” he said.