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Deadwood, Still Hopeful after Gambling Revenue Dropped in March

Posted on May 11th, 2011

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A recent release on showed a 6.1 percent decline in gambling revenue in Deadwood for the month of March. The 6.1 percent drop to $8.5 million is just a continuation of a decline that started since January, which totaled $2 million by February. In the face of the loss, the figure, according to Tom Nelson, Executive Director of Deadwood Gaming Association, is not yet alarming. Nelson is also a Republican legislator who represents Deadwood. He further stated that the 6.1 percent drop is above the expected 10 percent loss projected by some for the entire year considering that the statewide smoking ban is already in effect.

“All the documentation from other gaming jurisdictions with smoking bans suggests we’ll continue to see this downturn, but hopefully it will stay below 10 percent,” Nelson said. He also said that it should be reason to be positive because “We’re still doing better than state video lottery that’s lost about 16 percent year to date. I also still think we’ll try to make some accommodations at the Legislature next year.” On the other hand, Deadwood Chamber and Visitors Bureau were concerned of the decline. As a result, they doubled their efforts in marketing to invite more tourists and customers to Deadwood for the upcoming summer season. They are maximizing efforts to increase revenue especially during summer when historically, revenues rise.

Part of the marketing efforts of the casino operators and city officials to boost revenueis creating activities such as Mardi Gras Festival and three-day St. Patrick’s Day party held in March. Louie Lalonde, General Manager of Old Style Saloon No. 10, a small casino in Deadwood, said they are making their own efforts to stay afloat amidst a tough economy. Lalonde said that revenues generated from events such as Mardi Gras may not constitute a gambling revenue since the events encourage the younger crowd to witness live music and hang out in bars than playing the slot machines. “I think for the most part, the industry as a whole still depends on that older crowd,” she said. “We need those individuals between 50 and 70 years old to be consistent slot players.” Lalonde added: “Efforts to accommodate smokers during the cold winter with outdoor heating were costly, prices for gas and electricity spiked making it feel like we’re pedaling backwards.”

Winter may have affected significantly the performance of the casinos in Deadwood; they are hoping to gain more during summer. The casino owners and city officials are keeping an optimistic attitude despite thefactors that point to a glaring decline in the gaming revenue. The cold season and statewide smoking ban is not enough to give reason to casino owners and officials to be distressed as well as escalating gas prices did not rub out their optimism. “I think it’s going to be a great summer for Deadwood,” Nelson said. “Even with the gas prices, we’ve found in the past that this area is still an affordable destination. We’re reasonable for a good family trip.”

Casino operators like Saloon No.10 are looking to have more customers coming in from tourists and visitors who will frequent the new Deadwood Mountain Grand Hotel and Casino that is soon to open and The Lodge Hotel. “I saw our business increasing this winter because of The Lodge and what they’re doing to attract more conventions. Those people are definitely coming downtown,” Lalonde said. “The Mountain Grand project is one of the biggest pluses for the area. It gives us another level of entertainment.” The new Deadwood Mountain Grand Hotel was constructed in July 2008 and is projected to open on July this year; it has a 2-500 seat entertainment and event center to stage national acts.

“Anytime you have a 2,500-seat theater bringing in national acts it’s reason for excitement. That’s one of the things that has been missing; we’ve got the history, the Black Hills, but not the major entertainment,” said Milos of the chamber. He adds that they are looking forward to the summer season and the several events that they have in store. Milos said that an event center would complete the whole picture as having Deadwood a historic city with entertainment.