The first rally was held by Indian Motorcycle riders on August 14, 1938, by the “Jackpine Gypsies” motorcycle club, who still own and operate the tracks, hillclimb, and field areas where the rally is centered. The first event was called the “Black Hills Classic” and consisted of a single race with nine participants and a small audience. The founder is Clarence “Pappy” Hoel. He purchased an Indian Motorcycle franchise in Sturgis in 1936 and formed the “Jackpine Gypsies” that same year. The Jackpine Gypsies were inducted to the Motorcycle Hall of Fame in 1997. Hoel was inducted into the AMA Hall of Fame the following year, in 1998.
The focus of a motorcycle rally was originally racing and stunts. In 1961, the rally was expanded to include the Hillclimb and Motocross races. This could include half-mile track racing (the first year in Sturgis, there were 19 participants), intentional board wall crashes, ramp jumps and head-on collisions with automobiles.
The Sturgis Rally has been held every year, with exceptions during World War II. For instance, in 1942, the event was not held due to gasoline rationing.
For many years the City has been in a Licensing agreement with a community non-profit, Sturgis Motorcycle Rally, inc, and its predecessor’in-interest, the Sturgis Area Chamber of Commerce, that generates millions of dollars in Royalties and Sponsorship dollars. In 2012 the City Council reaffirmed this relationship through a unanimous proclamation.
The City of Sturgis has calculated that the Rally brings over $800 million to South Dakota annually. The City of Sturgis earned almost $270,000 in 2011 from selling event guides and sponsorships. The rally makes up 95% of the city’s annual revenue.
There were 405 individuals jailed at the 2004 rally, and approximately $250,000 worth of motorcycles stolen annually. Rally-goers are a mix of white-collar and blue-collar workers and are generally welcomed as an important source of income for Sturgis and surrounding areas. The rally turns local roads into “parking lots”, and draws local law enforcement away from routine patrols.
