Proxy Bets Cost Deadwood Casino, Employee Their Licenses

The owner of Mustang Sally’s sports bar and casino in Deadwood and one of its employees were in multiple violations of South Dakota Codified Laws, and no amount of remorse or regret could save the owner of the establishment from a hefty fine. A license revocation was imposed on both the owner and the employee in question.

Proxy Bets, Extending Credit Prohibited

The South Dakota Commission on Gaming (SDCG) held an administrative hearing last Wednesday, September 28, and the allegations against the owner of Mustang Sally Toby Keehn, and one of the establishment’s employees Jennifer Haefs resulted in both having their licenses revoked. According to SDCG’s documents, Keehn and Haefs were both conducting illegal proxy betting, which is a Class 6 felony under South Dakota Codified Laws (SDCL). Keehn has been also found to have allegedly extended credit, which is also violating SDCL, however specific amounts were not mentioned in the administrative hearings document.

According to SDCL 42-7B-83, certain persons are prohibited from betting, and on line four of the list of persons is “an agent or proxy for any person for the purposes of placing or redeeming a bet,” which both Keehn and Haefs have done not only for each other but also for other people. According to the investigation, state investigators have been able to find evidence of no fewer than 95 proxy bets placed between the pair. SDCL 42-7B-45 clearly states that extension of credit by a licensee or an employee of a licensed establishment is prohibited, and is also categorized as a Class 6 felony.

Admitting Guilt, Final Commission Decisions

Keehn has apparently been a regular fan of phoning in his sports bets, incriminating Haefs as well, since she was the one who executed the bets. During the hearing, Keehn told the SDCG that he was “incredibly sorry” for his “bad judgment”, which is basically a sign of admitting guilt, hence waiving his Fifth Amendment right to not incriminate himself. While Haefs hasn’t testified, Keehn went on saying that although he “can’t undo it”, he’s promising “It definitely would never happen again.”

Class 6 felonies are covered under SDCL 22-6-1, which deals with “habitual criminal sentences”, and according to line 9, Class 6 felons can face “two years imprisonment in the state penitentiary or a fine of four thousand dollars, or both” as punishment for their illegal activities. In the case of Mustang Sally’s owner Toby Keehn and his employee – Jennifer Haefs – the business will be losing its gaming license only, which means that the bar part of it will still be operational, Haefs is losing her license as well, which means she’s most likely going to have to re-train and re-qualify into another field. The business also had a $25,000 fine imposed against it, due no later than October 31, 2022.

This might seem a little extreme to some, but there was no jail time for any of the parties involved, and sports betting is a relatively big industry in South Dakota. It launched in September 2021, with retail betting authorized only in Deadwood and in tribal casinos. The numbers up until August showed $6,651,301 total betting handle, and close to $50,000 in taxes for the state, so you could say that the fine the Commission imposed was almost half of the taxes that the State has collected since launching sports betting.