Deadwood casino complex tainted by EB-5 swindle sold

Republican South Dakota former Governor now US Senator Mike Rounds began courting Chinese money in 2004 but so far has escaped a thorough probe of EB-5 crimes committed on his watch. 

During a photo shoot in 2011 when construction on the Bendagate-financed Deadwood Mountain Grand resurrected from the Homestake Slime Plant went obscenely over budget the following was heard by a city employee uttered by Big Kenny Alphin as he handed a check for $5 million to Mike Gustafson.

This is the last goddamned check I'm going to write to you assholes!

On advice of counsel Rounds has never released the names of his Future Fund and Bendagate scandal cronies because he's shielded by South Dakota's lack of ethics oversight. In 2014 Republican former Deadwood mayor Chuck Turbiville fled an economic development post ahead of a lawsuit seeking information about criminal activity committed during Gov. Rounds' administration resulting in the suspicious death of Richard Benda. Turbiville died in 2018 but not before endorsing Marty Jackley for governor.

China hates South Dakota because the state screwed Chinese job creators out of at least $100 million and in 2019 after 64 of the 65 investors received visas and gained permanent residency a settlement was reached.

Dale Morris, Tentexkota’s managing member, reached settlements with the Chinese investors as well as with seven other men who guaranteed the loan, according to Kasey Olivier, a Sioux Falls lawyer who represented Tentexkota. Those seven included Kenneth “Big Kenny” Alphin, a member of the country music duo Big & Rich, as well as Timothy Conrad, Michael Gustafson, George Mitchell, Marc Oswald, Ronald Wheeler and Dwight Wiles. The Chinese investors, known collectively as SDIF Limited Partnership 2, filed a civil suit, seeking their money as well as interest and legal fees. The case came before federal Judge Charles Kornmann in Aberdeen, who ruled that the money was indeed owed, rejecting arguments made by Tentexkota. [Deadwood Mountain Grand lawsuits settled]

Now, the massive casino complex that includes the DMG has been sold to gambling cartel Gaming and Leisure Properties Inc. as part of a $105+ million deal.

Simultaneous with the acquisition, GLPI and Strategic Gaming Management will enter into two cross-defaulted triple-net lease agreements, each for an initial 25-year term with two 10-year renewal periods. GLPI also provided $5 million for capital improvements for a total investment of $110 million. The initial aggregate annual rent for the new leases is $9.2 million, inclusive of capital-improvement funding, and represents an 8.4% capitalization rate. Rent is subject to a fixed 2% annual escalation beginning in year three and a CPI-based annual escalation beginning in year 11 of the greater of 2% or CPI capped at 2.5. GLPI also secured a right of first refusal on the real estate related to future acquisitions until Strategic’s adjusted EBITDAR related to GLPI-owned assets reaches $40 million annualized. [Deadwood Casinos Sell As Part Of $105 Million Deal]

This deal just goes to show that in South Dakota crime not only pays, it's baked into Pierre's pay to play pie.

Enslaved Chinese immigrants built the railroads from the West Coast to the Rocky Mountains in the 1800s and Deadwood gambling was legalized with a promise to preserve all the history in the Gulch where archaeologists still unearth Chinese opium pipes.

Mike Rounds is part owner of 10 leisure properties spread across Nebraska, North Dakota, Iowa, Wisconsin and Minnesota.

 

ip image: a thunderstorm looms above the parking garage at the foot of the Deadwood Mountain Grand.