Deadwood stages revival of Wild West casino

RUPERT CORNWELL

Deadwood, South Dakota

"This is not Las Vegas," assured the Mayor of Deadwood, exuding manners and sweet reason not instantly associated with a city of lurid pedigree. Her sex is a surprise too.

Elected in May, Barbara Allen is the first woman to run this landmark of the once-Wild West, now a lovingly restored, child-friendly theme park whose patron saints are Kevin Costner and the benign shade of Wild Bill Hickok.

But whether in the Nevada desert or at one of the 83 casinos here in the Black Hills of South Dakota, a slot machine is a slot machine. No less than Vegas, Deadwood is a monument to gambling, America's true pastime - a pastime that finally is turning sour.

A decade ago, the rip-roaring Deadwood Gulch of 1870s gold-rush fame was dying on its feet, ravaged by fire, flood and diminishing revenues from the local mine, eking out a parlous living on the celebrity of one- time inhabitants like Hickok and Calamity Jane. Then in 1989, and only for Deadwood, South Dakota became the third state to legalise casino gambling, after Nevada and New Jersey.

By Vegas standards, Deadwood is pretty tame: blackjack, poker and slots only, and a maximum stake of $5. But Ms Allen has no doubt gambling saved Deadwood: "Without it, our little town was down for the count." A town of 2,000 now attracts 1.3 million visitors a year who wager over $50m (pounds 32m) a month. Main Street is lined with saloons, casinos and gambling dens, among them the Midnight Star, owned by Costner, complete with sports bar, swanky restaurant and window cases full of costumes worn by the great man.

As for Wild Bill, he bestrides the place from beyond the grave, even though he was only in town for five weeks before he was shot (while playing poker) on 2 August 1876. His droop-moustached face looms from statues, bars and campgrounds, drawing in the punters from across the plains and beyond. "Most of them have grey hair; they're out for a good time," says Ms Allen. "We're more homey than other casino towns; Deadwood is for the family." But even here, in a relative showcase for gambling - or rather "gaming" or "casino entertainment" as its promoters call it - the problems of the industry are steadily more visible. In 20 years, gambling has turned from sideshow to national obsession. Americans bet $480bn a year, equivalent to 7 per cent of gross domestic product. Half the population, 125 million, visited a casino last year. In Mississippi, the poorest state, more was spent in casinos - $29bn - than on taxable retail goods. However, the boom is slowing, and in some places turning to bust. One explanation is the economic cycle; the laws of supply and demand apply to gambling too. But deeper currents are at work. If it is true that two great forces wrestle in the American soul - puritanism and libertarianism - then after a decade of the latter, the pendulum is swinging towards the puritans' way.

Take New Orleans, freewheeling metropolis of a Louisiana where the outgoing Democratic governor, Edwin Edwards, was a self-professed gambling addict whose main claim to fame is having once paid a $500,000 debt to a Las Vegas casino in cash. In the Big Easy, surely, gambling could not fail, but two riverboat casinos on the Mississippi have shut, and construction of a huge casino on the edge of the French Quarter has halted. Mr Edward's successor is a Republican businessman who ran on an anti-gambling platform.

As more and more states get into the act, realisation has dawned that money wagered at the gaming tables is drawn from other parts of the economy, that business and jobs gained by a casino town are lost elsewhere. Most important, the huge social costs of gambling - the financial pressures, crime, the direct and indirect destruction of families - are becoming ever more apparent. An astonishing 4 per cent of the population are "problem gamblers", according to one recent study. The fiasco in New Orleans is forcing Louisiana to chop $80m out of its $4.3bn budget, while the city is having to lay off 300 workers.

A legal quirk allows Indians to run casinos on their reservations in 26 states, while 10 states permit gambling elsewhere. But despite intense lobbying by an industry with annual gross revenues of $40bn, those figures have not changed for two years. No more is heard of the industry boast that soon every American will be three hours or less away from a casino.

Even Deadwood has its problems. For all the carefully rebuilt and repainted facades, the restoration of the original brick-paved streets and other improvements - all paid for by gaming revenue - complaints are mounting that ordinary shops have vanished, that fraud, theft and other gambling- related crimes are on the increase. And Deadwood is the happy face of Casinoland USA.

Proudly, Ms Allen points to one peculiar surge in her civic duties. "In seven months I've married 120 couples, only five of them local. When I ask them why they come here, they just say, 'Well, we heard Deadwood was a neat place'." And it is. But for how much longer?