When South Dakotans voted in 1988 to legalize gambling, many people envisioned a handful of slot machines in Deadwood's five bars and a poker table in the Old Style Saloon No. 10.

But others feared the town would fall prey to organized crime. South Dakota was only the third state to legalize gambling, joining the ranks of Nevada and New Jersey, both of which had a history of mob involvement in gambling.

The mafia wasn't the only concern. There were also worries that more run-of-the-mill criminals might try to launder money through South Dakota's newest industry.

Then-Gov. George S. Mickelson was determined that not happen. He insisted that Deadwood gambling be "squeaky clean," which was one reason that Division of Criminal Investigation agent Don Gromer - a self-described "former cop" - was hired as the first executive secretary of the South Dakota Commission on Gaming.

"We were trying to prepare for the worst and hope for the best," Gromer recalled. "And I think that's actually what occurred."

State officials did what they could to prevent crime before the first card was dealt in Deadwood.

Gromer and the five original gaming commissioners spent a week in Nevada, visiting with gambling officials and touring casinos. Many of South Dakota's gambling regulations were patterned after Nevada laws.

Perhaps the most important one required background investigations for anyone applying for a license to own or operate a casino, deal cards, handle money, or sell or service slot machines.

The commission set up a gaming enforcement division with law enforcement authority over crimes connected with gambling, including cheating and thievery.

They also established strict auditing guidelines aimed at preventing employee theft, even stipulating how money should be handled and counted.

Still, gaming officials didn't exactly feel prepared when the first slot machine handle was pulled Nov. 1, 1989.

"There wasn't anybody in the state of South Dakota that knew much about casino gambling," Gromer said. It was a real learning curve. And everybody was wanting to get started yesterday."

Les Bradley, who was Deadwood's chief of police in 1989, wasn't worried.

"Personally I really didn't look for any more problems than we had during the rally and Days of '76," Bradley said, referring to large crowds that would visit Deadwood every summer during the Sturgis motorcycle rally and Deadwood's big annual rodeo. "I said, 'I think we can handle it. I don't think there will be many major problems.'"

And in the end, Bradley was right. Police stayed busy with parking and alcohol-related issues, just as they normally did during special events. There were a few fights, Bradley said, "but we had those all the time, because we had the miners" from Homestake.

Things were peaceful until Sept. 11, 1990. Daniel Cobb, a 33-year-old U.S. Air Force sergeant, had a run of bad luck in Deadwood. About 2:30 a.m., he took a shotgun into the Windflower Saloon and demanded that co-owner Stephen Sperlin, 49, return several checks Cobb had written to the casino.

When Sperlin refused, Cobb shot him to death and made off with $1,137. Cobb later pleaded guilty to murder, though he said the shooting was accidental, and is serving life in prison without parole.

Sperlin's death was a wake-up call for many casino owners.

"I think it brought a lot of consciousness to the operators up there - the people that were running properties - that what they were involved in was a cash-laden industry," Gromer said. "It certainly heightened their sensitivity toward security."

South Dakota didn't initially require that casinos have surveillance systems. With Deadwood's $5 bet limit and a maximum of 30 slot machines per building, such requirements would have "regulated them out of business" before they ever opened their doors, Gromer said.

But when gambling supporters began talking about raising bet limits to $100, state officials insisted that increased surveillance be part of the discussion. State law now requires video surveillance of blackjack and poker areas, cashier's cages, count rooms and slot machine areas.

Casino owners weren't always happy with the state's requirements.

"We ran into some resistance ... because a lot of this stuff that we were implementing was costing the properties money," Gromer said. "But overall, I think once it was understood what we were attempting to do, why we were attempting to do it, people became fairly cooperative."

Those rules helped keep casinos safe and gambling honest. They also benefited South Dakota.

"From our perspective, we wanted to prohibit, eliminate, reduce theft and pilferage," Gromer said. "The state had an 8 percent interest in this. So we wanted to make sure that we got our 8 percent."

Protecting the government's share of slot machine intake is an ongoing effort.

"It's a constant challenge to keep our regulations current with the technology," said Larry Eliason, who has been gaming's executive secretary since 1995. "I think technology is always going to be ahead of the regulators."

Over time, gaming commissioners and business owners developed good working relationships based on a common goal: "They didn't want bad people on their properties any more than we wanted bad people in there," Gromer said.

Twenty years later, Lawrence County Sheriff Rick Mowell credits the gaming commission's thorough background investigations for keeping problems to a minimum.

"They do an excellent job ... and I think head a lot of the potential problems off at the pass," said Mowell, who was Spearfish's police chief in 1989. "With law enforcement, any time you bring in more people, you bring in more problems, and that's just a fact of life."

Although serious crime rates didn't spike with gambling, the number of bad checks written did. Mowell estimates that his office deals with four to five times as many bad checks now as it did 20 years ago.

Deadwood Police Chief Kelly Fuller says it isn't gambling itself that puts increased demands on his department, which has gone from six full-time officers in 1989 to 11 today. It's the special events - the Deadwood Jam, Deadweird, St. Patrick's Day and Mardi Gras parades, Kool Deadwood Nites, etc. - that were developed to attract visitors.

Most arrests are alcohol-related, but Deadwood police also deal with parking issues and assist with all medical calls.

"Deadwood draws approximately 2 million visitors a year, and that's a big impact in our community," Fuller said. "From a criminal standpoint, we stay busy, but we don't have a lot of serious crime."

Gaming's original commissioners couldn't have hoped for anything better.

"I think we certainly met Gov. Mickelson's mandate of keeping it squeaky clean," Gromer said.

Contact Heidi Bell Gease at 394-8419 or heidi.bell@rapidcityjournal.com