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Sioux Falls man loses insurance and gaming licenses after alleged $1.5 million fraud

By: - June 13, 2023 4:35 pm
A summer night in Deadwood. (Photo by Travel South Dakota)

A summer night in Deadwood. The state Commission on Gaming revoked a Sioux Falls man's gaming license for a Deadwood casino Tuesday due to his role in an alleged $1.5 million insurance fraud. (Photo by Travel South Dakota)

A Sioux Falls man who lost his insurance license for an alleged $1.5 million fraud that affected more than 600 South Dakota student athletes has also lost his gaming license. 

At its Tuesday meeting in Deadwood, the South Dakota Commission on Gaming revoked Gary Aaron King’s personal gaming license. King was a member of multiple businesses housed at the Midnight Star in Deadwood. 

The decision came after the state Division of Insurance revoked King’s insurance producer license and business entity license in March.

King owned and operated Cypress Risk Management LLC, which sold insurance to cover student-athletes at colleges and universities in South Dakota and other states. King allegedly received premiums that he failed to remit to the insurance companies he was working with, according to documents from Minnehaha County court, the state Division of Insurance, and the state Office of Hearing Examiners. About $1.5 million of that money remained outstanding as of March, according to the Office of Hearing Examiner documents. The Division of Insurance documents say at least 625 South Dakota student athletes were affected and “may lose their coverage due to these actions.”

King did not appeal the Division of Insurance’s ’s March 10 decision. The Gaming Commission concluded it had grounds in state law to revoke his gaming license Tuesday because he violated provisions in the insurance code and participated in “fraudulent, coercive, or dishonest practices, or demonstrated incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in the state or elsewhere.” King had volunteered to relinquish his gaming license, but the license has not been physically received by the commission yet, so commissioners voted to officially revoke it Tuesday.

King held his gaming license for about a year, according to prior reporting from the Black Hills Pioneer. He owned GK LLC and owned more than one-third of Elevated LLC, which owns Bet Rushmore. During the Gaming Commission’s February 2022 meeting, King applied for a sports wagering services provider license with several other owners of Elevated LLC. 

The corporate entities that were involved with King in the gaming world did not appear in front of the commission because they had already cut ties with him.

King has faced several recent lawsuits, including one in Minnehaha County from Student Assurance Services Inc., of Stillwater, Minnesota. The lawsuit said King sold insurance for the company to colleges and universities in Nebraska, Iowa, North Dakota and South Dakota, but failed to remit the premiums he collected. After King failed to respond to the lawsuit, a judge entered a default judgment in April against him and his company, Cypress Risk Management, for about $700,000.

— South Dakota Searchlight’s Seth Tupper contributed to this report.

EDITOR’S NOTE: This story has been updated with a correction since its original publication to remove inaccurate information pertaining to Gary King’s business affiliations.


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Makenzie Huber
Makenzie Huber

Makenzie Huber is a lifelong South Dakotan whose work has won national and regional awards. She's spent five years as a journalist with experience reporting on workforce, development and business issues within the state.