Deadwood seeks extra gaming proceeds after $237M spent

Part 1 of a 2-part collection.

DEADWOOD, S.D. – After receiving greater than $237 million for historic preservation over the previous 35 years, this Black Hills metropolis of 1,300 individuals desires a much bigger share of annual tax revenues from legalized playing.

Senate Bill 102, which seems headed for passage within the 2026 legislative session, would shift extra gaming tax cash to the town of Deadwood whereas lowering the quantity obtained by the state common fund and a few space college districts.

On probably the most primary stage, Deadwood officers and different supporters of the change to the tax allocation method stated that whilst playing alternatives and tax revenues have risen steadily in recent times, the town’s allocation for historic preservation has not stored up.

For instance, although total gaming taxes rose from $14.7 million in 2014 to $18.9 million in 2024, a 17% improve, Deadwood’s total allocation remained regular at roughly $7.1 million.

At a listening to on SB 102 earlier than the Senate Appropriations Committee on Feb. 17, Kevin Kuchenbecker, Deadwood’s historic preservation officer, stated the town wants a bigger share of gaming revenues to improve infrastructure and to keep up the town’s cultural heritage, which is the principle tourism driver for the town.

“Restoring Deadwood doesn’t happen overnight and there’s no end to it,” he stated.

As the talk over the funding method progresses, one different historic Black Hills group is asking lawmakers to think about preservation wants in areas outdoors of Deadwood.

In a letter despatched to all legislators, Hot Springs city leaders stated they assist preservation in Deadwood however imagine that one metropolis mustn’t obtain such a disproportionate share of cash generated by gaming taxes.

“We respectfully urge that this moment also be used to evaluate preservation needs statewide,” the letter stated. “The original legislative objective, saving Deadwood’s historic core, has largely been achieved, and that South Dakota now faces a broader preservation challenge. Without adjustment, the current structure unintentionally concentrates preservation success in arguably the wealthiest second-class municipality, while historic assets elsewhere continue to disappear.”

$33 billion wagered since 1989

Since gaming started in Deadwood in November 1989, billions in income and tons of of tens of millions in taxes have been generated, in response to a News Watch evaluation of state Department of Revenue information.

As of June 2025, bettors had wagered a mixed $32.6 billion and gained $29.5 billion. That leaves gross revenues of about $3 billion, of which gaming operators take a big lower.

Meanwhile, gaming has generated roughly $457.4 million in tax revenues, which was disbursed within the following methods (complete might not add up as a result of rounding):

• City of Deadwood: $237.4 million for historic preservation and quite a few different civic, infrastructural and business initiatives supporting tourism
• South Dakota tourism: $87.8 million for statewide promotion of visitation
• State common fund: $67.2 million, fueling a wide range of state bills
• State Gaming Commission: $27.3 million, operations and staffing prices
• Lawrence County: $23.2 million, assist for county authorities
• Cities/faculties in Lawrence County: $12.8 million, assist for operations
• Statewide historical past grants: $3.1 million for preservation outdoors Deadwood
• Gambling helpline: $457,000 for statewide dependancy prevention

An advanced method

Distribution of tax revenues from Deadwood gaming follows an advanced method final tweaked in 1995 during which 16 entities obtain a number of the cash.

In fiscal 12 months 2024, complete gaming tax and payment revenues had been about $19.3 million.

The total allocation is available in two steps.

First, about $16.3 million was allotted to the town of Deadwood historic preservation fund ($6.8 million), the state tourism fund ($4.5 million), state Gaming Commission ($2.2 million), the state common fund ($1.4 million), Lawrence County ($1.1 million), the statewide historic grant fund ($100,000) and for the state gaming dependancy program ($30,000).

The remaining stability of roughly $3 million was then divided up with 70% headed to the state common fund ($2.1 million) and 10% every to Deadwood for historic preservation, to 4 municipalities in Lawrence County and three space college districts.

“In the long term, Deadwood revenues grow at the expense of the state general fund’s revenues.” – Derek Johnson, state economist throughout the Bureau of Finance and Management

Senate Bill 102, as amended and handed by the state Senate, would change the share breakdown of the $3 million to provide 70% to the town of Deadwood, 25% to the state common fund and nothing to cities or faculties apart from a small cost to the Deadwood School District.

As of March 9, the invoice was awaiting a vote by the House of Representatives earlier than closing passage.

Derek Johnson, state economist throughout the Bureau of Finance and Management, stated the amended model of SB 102 holds revenues for Deadwood regular for the subsequent two years however would result in elevated earnings for the town afterward. The BFM helps the brand new proposed funding method in SB 102.

Two college districts that obtain Deadwood gaming cash – Spearfish and Meade County faculties – would lose their annual funds, which totaled about $260,000 in 2025, Johnson stated. The Lead-Deadwood district would proceed to obtain annual funds as a result of it doesn’t get further state monetary assist, he stated.

Sen. Taffy Howard, a Rapid City Republican who self-identifies as a fiscal conservative, requested which entity now funded with gaming revenues would get much less sooner or later because the method generates more cash for Deadwood.

“Who is the loser in this?” Howard requested. “If somebody is getting a higher percentage, somebody is getting a lower percentage.”

Johnson replied that beneath the brand new proposed method, the state common fund would obtain a decrease share of gaming cash than it will get now.

“In the long term, Deadwood revenues grow at the expense of the state general fund’s revenues,” Johnson stated.

All boats rise with extra betting

However, if gaming revenues proceed to climb, all recipients nonetheless throughout the method will ultimately see more cash, Kuchenbecker stated.

“We need to feed the goose that lays the golden egg,” he stated, repeating a long-held Deadwood mantra.

“(SB 102) sets forth that we grow together rather than … Deadwood falling behind with deferred maintenance and infrastructure needs that we need to continue to upgrade the community,” Kuchenbecker stated.

Kuchenbecker informed News Watch that because the invoice is written, no improve could be made to the statewide historical past grant program, which might stay capped at $100,000 a 12 months.

History, not playing, the draw to Deadwood?

Throughout the talk over SB 102, Kuchenbecker and different proponents of the measure have made the argument that Deadwood’s fundamental draw as a tourism vacation spot is historic relevance and never gaming.

Without a constant – and elevated – stage of economic assist for historic preservation, Deadwood may lose its luster as a tourism vacation spot, they argued.

Justin Smith, a lobbyist for the Tourism Coalition of South Dakota, additionally spoke in favor of the invoice.

“In Deadwood, historic preservation is not an enhancement, it is the product,” he stated. “The buildings, streetscape and authenticity are what draws visitors from around the country and from around the world.”

On a latest sunny afternoon, two of these guests included Minneapolis vacationers Desiree Weigel and David Holmberg. They had come to South Dakota to see Badlands National Park and added a last-minute go to to Deadwood to be taught concerning the city’s historical past.

“Neither of us are gamblers,” Weigell stated as they walked their boxer via the historic Mount Moriah Cemetery within the hills above Deadwood.

Homberg, whose passion is gathering historic firearms, stated the couple was conscious of Deadwood as a playing vacation spot, although not for them.

“I’m an Old West buff, so I really wanted to see where Wild Bill Hickok was buried,” he stated.

Sports betting delivers a brand new jackpot for Deadwood casinos

According to the South Dakota Department of Revenue, sports activities bettors in Deadwood are growing their wagers at a gradual tempo.

Kuchenbecker stated that when the town employed a agency a number of years in the past to assist sharpen the branding efforts for Deadwood, the advisor was stunned to find the significance of historic tourism. The examine led to new Deadwood logos and advertising and marketing supplies that centered on the Wild West excess of one-armed bandits.

Wide array of spending in Deadwood

The ways in which Deadwood has spent its gaming income span a big selection of native initiatives.

State statutes present the town with nice latitude in how gaming cash needs to be spent. According to statute 42.7B-05, “the term, historic restoration and preservation, shall be interpreted liberally in scope and effect.”

Over the years, Deadwood has funded apparent historic initiatives comparable to restoring the Adams House Museum, the Mount Moriah cemetery and the Days of ’76 rodeo grounds and museum.

But Kuchenbecker stated different initiatives present oblique assist to the historic preservation mission. For occasion, a water line that gives service to historic properties may very well be repaired utilizing gaming tax revenues, he stated.

The metropolis has additionally paid for or helped fund enhancements to U.S. Highway 85, the restoration of the Deadwood Mountain Grand and tourism initiatives together with the native trolley and lately accomplished Outlaw Square public efficiency house, in response to earlier reporting by News Watch.

Gaming funds have additionally helped bury energy traces and add interval lighting, enhance a metropolis recreation heart and uncover hundreds of artifacts from an archeological investigation into historic Chinatown.

Ongoing efforts are being made to offer grants to owners to renovate properties constructed within the Eighteen Eighties and to restore retaining partitions that assist homes constructed throughout the hills of Deadwood.

Kuchenbecker added that non-public funding has additionally helped broaden historic preservation in Deadwood, together with $7 million in non-public cash spent lately to revive the Landmark Casino that opened in 2024.

The greater than 3.5 million vacationers who go to Deadwood yearly take a toll on the town’s skill to keep up infrastructure, staffing and its historic focus, Kuchenbecker stated. The metropolis is restricted by zoning and geography from attracting new residential or business growth that would improve its tax base, he stated.

The visitation generates elevated prices for the town, he stated, noting that the police division has a employees of 17, far larger than a typical South Dakota metropolis of 1,300 individuals.

“We’re a small town but we have big-city expenses because of the visitation,” he stated.

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