Wednesday, May 14, 2003 | 11:43 a.m.
DEADWOOD, S.D. -- Casino business in this historic Black Hills town has improved markedly since a $100 bet limit was enacted 2 1/2 years ago, gambling managers and others say.
It also has spurred casino expansion and hotel development.
When legalized gambling began here Nov. 1, 1989, maximum bets for card games and slot machines were frozen at $5 by the state constitution. Deadwood interests pressed for years to increase the limit, finally persuading voters in 2000 to pass a ballot measure changing the constitution.
Many seasoned gamblers were eager to ante larger bets, says Tom Rensch, general manager of the Silverado, billed as Deadwood's largest casino. The smaller bet limit was so restrictive that it kept some gamblers away, he says.
"The connotation of limited gambling with the $5 limit really hurt us when it came to attracting business groups and conventions," Rensch says. "Although $100 is still limited, it doesn't carry that same connotation."
The Silverado, which finished a huge expansion in August 2000, has 16 card tables and 235 slot machines. It features the town's only $100 slot machine, which offers a $100,000 jackpot, Rensch says.
"We were after the high-end play," he says. "They have $500 slot machines in Vegas. We just wanted to be that type of casino where we at least offered something comparable."
Gross gambling revenue was $51.8 million in fiscal year 2000 and climbed to $53.4 million in 2001 and $64.1 million in 2002, state Gaming Commission records show.
Gross revenue so far this fiscal year, $49.5 million, is about 5 percent above the same period last year.
Carefully watching his cards, Michael Brown of Vale plunks down $5 and $10 bets at a blackjack table in the Silverado. Although far from the $100 ceiling, the higher bet limit gives him more flexibility.
"I don't bet $100 a crack," Brown says. "I'll leave that risk to other players."
The $100 bet limit has helped draw more gamblers to Deadwood, says Tom Griffith, president of TDG Communications, an advertising, marketing and public relations firm. Griffith, who helped with campaigns to increase the $5 bet limit, started his business at Rapid City in 1994 but moved it to Deadwood in 2001.
Local gambling began on a roll in 1989, when its only competitors were casinos in Las Vegas, Atlantic City and on Indian reservations, Griffith says. But casinos have since sprung up across the nation, and Deadwood was at a disadvantage with $5 bets, he says.
"The market changed. If you want to be successful in gaming, you have to offer a product at least on par with your competitors. We weren't doing that."
Seated at a table in his business near the heart of the casino district, Griffith says $100 bets are helping bolster area businesses at a time when the economy is slumping and South Dakota is reeling from a drought.
"We are attracting gamblers who we otherwise were not able to attract," he says. "I've seen high-rollers come in and win $8,000 in an hour, and that simply didn't happen with $5 bets."
Many people prefer cards over slot machines because of the interaction with dealers and other players, Griffith says.
Slot machines snag most of the gamblers' money. Data from Larry Eliason, state Gaming Commission director, shows that blackjack and poker accounted for just 9 percent of casinos' gross revenue in March.
Deadwood had 56 card tables before the higher bet limit passed in November 2000. Now there are 80, Eliason says.
Each new card table requires about three more workers. Casinos employ more than 1,500 people.
John Wiles of Watertown, Gaming Commission chairman, says the $100 bet limit has kept Deadwood from stagnating.
"People have been more willing to invest in new facilities," he says. "It stabilized the market. If the limit had not been raised and other states continued to raise their bet limits, I think Deadwood would have peaked and had a hard time getting back its market share."
Casino manager Rensch says the increased popularity of card games caused the Silverado to begin offering blackjack lessons on Friday and Saturday nights. The practice table has been bustling, he says.
"The whole purpose of it is to teach people who are not comfortable with trying to learn how to play at a live table," Rensch says, scanning the casino floor at midday. Three card tables have games going. The rest await players who show up in the busier evening hours and weekends.
The $100 bet limit has not only helped casinos, but the extra visitors have created more shopping demand, Griffith says. That has resulted in the opening of several new shops, he says.
Griffith's firm has surveyed Deadwood visitors upon arrival, and they mention gambling, scenery and the town's history -- in that order -- as the primary reasons for coming. When the same visitors are surveyed a few days later, Griffith says they list Deadwood's colorful history as a western mining, logging and gambling town as the favorite part of their stay.
Deadwood interests intend to capitalize on its historic past, Griffith says.
"History is salable," he says, adding that the city of Deadwood is the largest historic preservation project in the nation.
He says the town's fortunes will improve even more when a recently announced $38 million entertainment complex is finished.
Griffith says Deadwood City Limits, as the project is called, will help fill the development vision that was promised in 1991 when actor Kevin Costner announced plans for the Dunbar, a $100 million resort that never has been built.
"There's a realization now that that project probably won't happen, so we're looking forward to something that will enlarge the pie the same way the Dunbar resort sought to do," he says.
Costner has been unable to get financing for the Dunbar.
Wiles, who has been on the Gaming Commission since 1996, says the time undoubtedly will come when there will again be talk of raising the bet limit. There's an undercurrent of South Dakotans who are uncomfortable with gambling, and that will ensure stakes do not get too high, he says.
"The mentality of South Dakota is, I think, that we are not going to turn Deadwood into a mini Las Vegas with high stakes that attract a type of guest who's not going to stay long and enjoy the Black Hills," Wiles says.
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