- Associated Press - Monday, May 8, 2017

YANKTON, S.D. (AP) - They stand 400 miles apart, but Yankton and Deadwood share Old West history, beautiful scenery and a draw for tourists.

Within two years, the two communities could share one more bond - casino gambling.

South Dakota voters passed a constitutional amendment in 1988 permitting limited gaming for Deadwood. The change also affected American Indian casinos in South Dakota, which can offer the same games allowed in the state.

Now, Yankton may seek gaming for its proposed Port Yankton project. Plans call for a hotel, restaurant, entertainment site, convention center and a casino. Promoters are also discussing the possibility of Missouri River cruises.

However, Yankton - or any other South Dakota location - would face a number of hurdles to win approval for casino gaming.

“The state constitution now contains exemptions for video lottery (around the state) and for the City of Deadwood,” said Larry Eliason, executive secretary of the South Dakota gaming commission.

“Right now, it’s only for the City of Deadwood. If another town wanted to have Deadwood style (gaming), they would have to go for a South Dakota constitutional amendment. It would need to be decided on a majority vote of the people in a (statewide) general election,” he told the Yankton Daily Press and Dakotan (https://bit.ly/2oUGw5o ).

In that respect, the clock is ticking for Port Yankton supporters to place the measure on the November 2018 ballot.

Petitioners would need 27,741 valid signatures by 5 p.m. Nov. 6, 2017, to make the 2018 general ballot, according to South Dakota Secretary of State Shantel Krebs.

Petition circulators must use a standard form and cannot create their own document, Krebs said. The attorney general would provide voters with an explanation of the ballot measure.

In addition, all petition signers must be registered voters in South Dakota.

If the measure didn’t make the 2018 ballot, or was defeated, it would likely need to wait until the 2020 general election.

In seeking to offer limited gaming, Port Yankton can look to Deadwood’s journey through the years. The process has brought rewards but has also required continued hard work, according to Mike Rodman, executive director of the Deadwood Gaming Association.

Compared to Deadwood’s timetable and experience, Yankton would need to move on the fast track to meet the Nov. 6, 2017, deadline for the 2018 ballot.

“The Deadwood, You Bet! Committee initially approached the state Legislature and asked them to put the issue of a change in the constitution to allow limited gaming on the ballot,” Rodman said. “They were turned down and spent the next year and a half gathering signatures from across South Dakota to put the issue on the ballot.”

Deadwood was breaking new legal and political ground at the time, not only in South Dakota but also nationally, Rodman said. “We became the third gaming jurisdiction at the time, behind Nevada and Atlantic City,” he said.

The Deadwood, You Bet! Committee was formed to win statewide support for a constitutional amendment allowing limited gaming in the Black Hills community, Rodman said. The committee consisted of the mayor at the time, business people and other community members.

“They had this vision, and they had the determination and drive to put together the story,” he said. “I think they were pioneers and really did change the image of gaming that spread across the whole state.”

However, gambling opponents argue, because of Deadwood, gaming has spread across the state in ways not imagined 30 years ago. They argue the state should not promote gaming, including video lottery, multi-state lottos and scratch tickets.

In addition, opponents note the accompanying growth of gaming through American Indian casinos and the creation of more South Dakota Lottery products.

Port Yankton supporters counter that the project would create jobs by stimulating the visitor industry and economic development. Port Yankton would provide amenities currently not found in the community, making it more attractive for conventions and tournaments and as a tourist destination, they say.

In addition, the supporters argue that gaming already surrounds Yankton on all sides. They point to Grand Falls Casino and Golf Resort near Larchwood, Iowa; Hard Rock Hotel and Casino at Sioux City; Fort Randall Casino near Pickstown; and the Ohiya Casino and Resort and the Tatanka Golf Club near Niobrara, Neb.

Port Yankton would make the community more competitive - particularly in keeping dollars in South Dakota - and lead to more riverside development, the supporters add.

The proposed project has created wide discussion in Yankton on all sides. Some residents worry about the possible increased crime and social problems. Others say the project is needed to move the community forward.

Those taking a middle ground say they support the project without the gaming. However, casino supporters believe the gaming provides a key part in ensuring the project’s success.

But first, Port Yankton needs to win approval of a constitutional amendment before it can proceed any further with gaming, Eliason said. In seeking its own gaming, Port Yankton - or any other location - could just attach itself alongside Deadwood in the constitution, he said.

“Right now, you could insert the name of an additional location in the amendment allowing gaming in Deadwood, but you would need to stick with those games,” he said. “Also, the constitution right now allocates money for Deadwood and Lawrence County. If you wanted to keep the money in your local community and county, you would need to win approval for it or your money would go to Deadwood.”

The creation of more gaming locations in South Dakota would likely require a change in state law, Eliason said.

“Right now, part of the state law says our commission has authority to regulate Deadwood and Lawrence County,” he said. “Without a change in the constitution, you could have unregulated and untaxed gaming in Yankton or anywhere else in South Dakota.”

The legal issues wouldn’t end with passage of a constitutional amendment, Eliason said.

“Another issue would be the licensing process for the casino, its owners and the people who work with the gaming,” he said. “This wouldn’t cover the employees in non-gaming areas such as the restaurant and hotel areas.”

Casino owners would determine policies about the presence of minors in certain areas, Eliason said. Those issues include crossing through the casino to reach other areas such a hotel or restaurant. However, Port Yankton or any other venue could be designed so minors and others can take other entrances or paths through the building, he added.

“There is no age limit to enter the casino. There is an age limit of 21 to play,” he said. “Some casinos have a house policy that no one under 21 can be on the casino game floor.”

Through the years, Deadwood gaming supporters have won higher bet limits, Rodman said.

“Higher bet limits were a long process, as our original attempt to move from $5 to $25 was rejected. Another initiated measure years later got us to $100,” he said. “The Legislature in 2011 moved the limit to $1,000. Then, 2012 - the first full year of higher bet limits - was our best year in gaming, and revenues have steadily fallen each year since.”

In 2016, the income from gaming revenue finished just below $100 million - down from the high of $107 million in 2012.

In recent years, Deadwood has sought to add more types of games in response to visitor requests, Rodman said.

“In 2014, in response to the increasing competition, with gaming options not available to us, in Colorado and Iowa, we asked the citizens of South Dakota to allow us to more favorably compete with the games of craps, roulette and keno,” he said of the successful ballot measure. “This has slowed the overall revenue losses as we watch slot revenues continue to drop precipitously.”

Rodman expects gaming to introduce new technology to meet customer interest and demands.

“The industry has always evolved. We’ve seen when it was mostly slot machines, and now it’s changing,” he said. “The millennials are used to a lot of interactive games. They grew up with Xbox and a lot of those games. They are more and more attracted to those types of things.”

Deadwood itself has seen increased competition for casinos during the past 30 years, Rodman said.

“We took the city limits of Deadwood in 1988 (for the constitutional amendment), and that’s the area that can have gaming, even as the Deadwood city limits have grown,” he said. “The competition (for gaming dollars) can be as fierce within the Deadwood city limits as outside it.”

Gaming remains a major draw, but Deadwood has sought to offer a much wider experience for families and all ages, Rodman said. Those offerings include dining, shopping and entertainment.

“Deadwood Mountain Grand was a shot in the arm,” he said. “We have the entertainment level that we would never have had before. It’s been very important to us.”

In addition, Deadwood is considering a plaza which could offer ice skating in the winter and a splash pad in the summer, Rodman said. “We’re looking at something like the Main Street plaza in Rapid City, which has been phenomenally successful. It would offer a real opportunity for us,” he said.

The community is also considering ways to showcase Deadwood Creek, including a new visitor/events center and walking paths. A number of gaming venues have reverted back to retail businesses, offering more shopping choices for both residents and visitors, he added.

Deadwood works to promote its local and regional attractions, Rodman said.

“The majority of marketing dollars have come from local businesses taxing themselves through BID District assessments,” he said. “Deadwood tries to market in conjunction with other regional marketing efforts as part of the Black Hills and Mt. Rushmore tourism season. (This effort) also includes visitors passing through to Yellowstone and points west.”

In addition, Deadwood promotes its Old West heritage, Rodman said.

“Deadwood has a vibrant events schedule, such as the Days of ‘76 Rodeo and parades, which has been part of our heritage long before the advent of gaming,” he said.

“The focus of Deadwood Chamber marketing is the events, history and natural beauty of the area. Most of the gaming marketing is done by individual casino marketing efforts.”

Deadwood officials are updating the city’s comprehensive plan, Rodman said. The plan will look at needed restoration work and set goals for the next 25 years.

“Most of the buildings are privately owned, so most of the preservation comes from private entities,” he said.

Deadwood has used gaming as a way of preserving many of its historic buildings, Rodman said. The City of Deadwood’s historic preservation office handles the historic aspect, in and out of Deadwood, funded by Deadwood gaming revenues, he said.

The annual local budget of Deadwood Historic Preservation Funding is submitted to the South Dakota State Preservation Office for approval and must comply with federal guidelines, Rodman said.

Deadwood has prided itself on maintaining high standards for its gaming operations, Rodman said. “You have to work very hard to keep your promise to the people of South Dakota. We try to keep gaming squeaky clean,” he said.

The gaming issue has remained an uphill battle for Deadwood in many ways during the past 30 years, but it has brought positive changes, Rodman said.

“The gaming business is a business, and it’s every bit as competitive as other businesses,” he said.

“We have a balance of entertainment, retail and convention space. Really, what we’re working on in Deadwood is still turning and evolving.”

___

Information from: Yankton Press and Dakotan, https://www.yankton.net/


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