Deadwood Gaming Regulators Expand Probe of Mustang Sally’s, Allege More Illegal Bets

Posted on: December 27, 2022, 05:26h. 

Last updated on: December 27, 2022, 06:37h.

The South Dakota Gaming Commission (SDGC), which oversees all gaming in Deadwood, the only place where commercial casino gambling is permitted in the state, is widening its probe into Mustang Sally’s.

Deadwood gaming sports betting Mustang Sally's
Mustang Sally’s on Main Street in Deadwood. The historic South Dakota Gold Rush town is home to numerous gaming parlors. (Image: Historic Deadwood)

The state gaming regulator in October revoked the gaming license for Mustang Sally’s after the tavern’s owner — Toby Keehn — admitted to allowing illegal proxy bets to be facilitated on his and other employees’ behalf. Jennifer Haefs, a Mustang Sally’s employee, told the commission that she routinely placed sports bets for others while on the job.

The SDGC believes the rogue betting extended further at Mustang Sally’s. During its commission meeting tomorrow, the state will review evidence regarding allegations that another former Mustang Sally’s worker placed proxy sports bets for underage individuals.

While working at Mustang Sally’s during the month of August 2022, Mathew Steinlicht placed multiple proxy bets for multiple underage individuals,” the South Dakota Gaming Commission wrote in its complaint against Steinlicht.

Proxy betting is the act of betting on someone else’s behalf. While legal in some parts of the world, proxy betting is prohibited in Deadwood. A violation of the state’s proxy betting law is a Class 6 felony punishable by up to two years in prison and $4,000 in fines.

South Dakota has nine classes of felony offenses. Class A, B, and C felonies carry possible life sentences. The remaining six felony classes are numbered 1 to 6, with Class 6 being the least serious.

Keehn avoided prison time. But along with forfeiting his gaming license, he was hit with a $25,000 fine.

State Details Claims

Mustang Sally’s is no longer a licensed Deadwood casino after losing its gaming privileges. Though Keehn pleaded with the state for forgiveness, the owner saying “it definitely would never happen again,” the SDGC revoked the casino’s operating permit.

Mustang Sally’s, like many Deadwood casinos, only housed a small smattering of slot machines. The Main Street property counted 30 slot machines and two self-service sports betting kiosks when its license was rescinded.

Mustang Sally’s has since been operating as a sports bar with simple eats and drinks like burgers and wings, beers, and milkshakes. If Keehn hopes to regain gaming privileges at some point in the future, tomorrow’s SDGC hearing likely won’t help his odds.

The complaint against Steinlicht was brought to the SDGC’s attention by Deadwood resident Brandon Snyder, who claims to have witnessed Steinlicht’s illegal actions. Steinlicht has already relinquished his individual gaming license that had allowed him to work in a Deadwood casino. Steinlicht is otherwise invoking his Fifth Amendment right to remain silent.

Underage Violations

The proxy betting component of Steinlicht’s alleged rogue sports betting facilitation is the more severe regulatory violation in the eyes of Deadwood gaming regulators. But his aiding of underage individuals to gamble is also a criminal act.

The SDGC says any licensee that permits someone under the age of 21 to gamble in a licensed casino in the state commits a Class I misdemeanor.

A casino that allows underage access risks losing its gaming license. But since Mustang Sally’s has already lost its license, the state is expected to consider a personal penalty against Steinlicht.

A Class 1 misdemeanor charge comes with a possible penalty of up to a year in prison and a $2,000 fine. That’s in addition to the Class 6 felony charge he’s facing for proxy betting.