Deadwood Casino Loses South Dakota Gaming License Due to Proxy Betting

  • Mustang Sally’s and its employee Jennifer Haefs have both lost their gaming licenses
  • Casino owner Keehn placed bets through Haefs and extended credit to individuals
  • Investigators found evidence of 95 proxy bets among other transgressions at the casino
  • Defense attorney Tellinguisen argued that many will lose their jobs if the casino closes
Deadwood high street
A casino in downtown Deadwood, South Dakota has just lost its gaming license due to proxy sports betting transgressions by its owner and an employee. [Image: Shutterstock.com]

Two licenses revoked

A casino in Deadwood and one of its top employees have lost their South Dakota gaming licenses for illegal proxy sports betting transgressions. The South Dakota Commission on Gaming (SDCG) came to the decision in a meeting on Wednesday.

According to the regulator, Mustang Sally’s owner Toby Keehn placed and had others place on his behalf numerous sports wagers at his own casino, also extending credit to at least one individual. Employee Jennifer Haefs placed the bets for Keehn among others.

Keehn attended the meeting to address the allegations. As reported by KELO-TV, he said:

I’m incredibly sorry for my bad judgment.”

The SDCG has revoked the licenses of Haefs and Mustang Sally’s, while the latter must also pay a $25,000 fine.

The offences in question

As per the SDCG’s rules, a licensee must not knowingly accept proxy wagers placed by anyone other than the bettor. Added to this, no gaming establishment can extend credit to another person for their participation in gaming.

According to the SDCG meeting agenda from Wednesday, the regulator has seen various evidence that Haefs placed bets for Keehn and others at Mustang Sally’s. This evidence includes text messages, surveillance video, and transaction records.

two years jailtime and a $4,000 fine

Investigators found evidence of 95 proxy bets, considered a Class 6 felony in the state of South Dakota. This means that both Keehn and Haef could face up to two years jailtime and a $4,000 fine. A gambling establishment extending credit to an individual is also a Class 6 felony.

An attempt at defense

As reported by KELO-TV, Keehn expressed regret for his actions during Wednesday’s meeting. Waiving his fifth amendment right to not incriminate himself, he recognized that he couldn’t undo his wrongdoings but pledged that “it definitely would never happen again.” The downtown Deadwood casino owner has held his gaming license for 34 years.

Although she refused to testify during the SDCG meeting, Haefs was present and represented by attorney Roger Tellinghuisen. He argued that revoking her license removed her only chance of meaningful employment, adding that she “now understands that (she did something wrong).”

In defense of Mustang Sally’s, Tellinghuisen went down the redundancies route. He highlighted that the loss of the license would lead the property to close its doors for good, meaning a loss of employment for all of its workers. He urged the regulator to show “compassion and consideration” in its ruling.

Mustang Sally’s isn’t the first operator to suffer the consequences of permitting proxy betting. In March this year, DraftKings had to pay a $150,000 penalty in New Jersey after a Florida man wagered through a friend located in the Garden State.