Deadwood Casinos Continue to Struggle

Written by: John Mehaffey, Las Vegas Casinos, Games, and Travel Expert
3 minute read

Deadwood Street covered in snow where casinos are located Deadwood casinos posted another monthly loss on gaming revenue in February when compared to the previous year. The casinos located in the South Dakota Black Hills won $7.83 million in February 2017, according to the South Dakota Commission on Gaming. That was down 6.5 percent from February 2016.  The slot handle was $73.8 million in February, down 11.7 percent from the previous year.

Some of the slots decline can be attributed to the loss of one day in 2017 compared to the 2016 leap year. This does not account for all of the losses based on the average daily win.

Table games won $1.14 million in February 2017. That was up 8.5 percent from the previous February. Table games offered in Deadwood include craps, roulette, Three Card Poker, Four Card Poker, Ultimate Texas Hold’em, Let it Ride, and Casino War.

February was the eighth month in a row that Deadwood posted a loss against the previous year in terms of gaming win. The only month that improved over the past year was June 2016.

Annual gaming revenues dropped to $99 million in 2016. That was the lowest gaming win in a decade for Deadwood. The first six months of the year included craps and roulette numbers for the first time. Those two games were rolled out in July 2015.

Deadwood casinos predicted that craps and roulette would have a major positive impact on gaming revenues. The increase was short-lived.

Low hotel occupancy rates

The Black Hill Pioneer reported that the February hotel occupancy rate was 36.45 percent, a slight decrease from the previous year. The national occupancy rate was 61.2 percent for February 2017.

The occupancy rate does not tell the entire story. The Comfort Inn in Deadwood suffered catastrophic damage due to a busted water pipe and was forced to close on February 1. The damages will keep that hotel shuttered until at least Memorial Day. This took 69 hotel rooms out of the market that did not count in the February occupancy total.

What is causing Deadwood to decline?

There are several issues that affect the tourism industry in Deadwood. The region depends on oil drilling and coal mining.  Oil prices dropped last year to the lowest point since the Great Recession. This affected the oil-rich economy in North Dakota. The movement away from coal hit towns in northeastern Wyoming especially hard. The largest coal deposits in the world are about 100 miles west of Deadwood.

The economy is not the only reason there is a recession in Deadwood. Some poker players have avoided Deadwood after accusations surfaced about player collusion. The South Dakota Video Lottery permitted slots for the first time in 2013. This brought familiar titles to gamblers in local bars. This made it so that South Dakotans no longer had to drive to Deadwood to play slots.

Another problem facing Deadwood is its poor returns to gamblers. Most video poker games do not return above 97 percent. The Lodge at Deadwood is the only casino in town with video poker games around 99 percent.

Blackjack games do not permit surrender or re-split aces. Only two casinos stand on all 17’s.  One of those – Celebrity Casino – only deals blackjack on weekend nights. All poker tables in Deadwood now have a $5 max rake.

Slot machines generally only return around 90 percent. That is in the same range as the state’s video lottery games.

John Mehaffey

John Mehaffey Las Vegas Casinos, Games, and Travel Expert

John is passionate about the gambling industry which he has been a part of since 2001. He learned how to find the best video poker and table games. He also writes about casino players' clubs, promotions, and things to do in Las Vegas, where he currently resides. He is happy to answer any questions that players have about gambling and Las Vegas.

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