The South Dakota city of Deadwood has been saved by casino revenue, a source has said.

Casinos have been the saviour for a South Dakota city since gambling was legalised in the state 20 years ago, a source has said.

Chet Brokaw, a writer for news agency the Associated Press, said that before casino firms came to the city of Deadwood, its businesses were dying and its buildings were crumbling.

Over the last two decades, gambling revenue has seen most of Deadwood's Main Street converted into casinos and has enabled investment in the city's infrastructure.

This included improvements to the water system which are necessary to protect against fires which used to regularly rage through the city.

Visitors have gambled $11.6 billion (C$12.5 billion) up to June 30th 2008 and managed to win back almost $10.6 billion, meaning that the casinos themselves have pocketed more than $1 billion over the last two decades.

During that time, they have paid $191.7 million in taxes and fees, more than $171 million of which have been distributed to the state and to local governments.

The historic city, which was the site where outlaw Wild Bill Hickok was shot in 1876, now has 80 gaming halls.