I have never been to (or even heard of the bustling metropolis of Black Hawk - pop. 118, the least populous city in Colorado), but through the magic that is Google Street view and Wikipedia, I can take a first hand look at what makes this wide spot in the road so afraid of the scores of cyclists that I am sure are a plague on the residents and visitors to this fair town.
pictures and map courtesy of Google and screen capture.
From what I can see, and from what Wikipedia tells me, the main (only) reason to visit Black Hawk is to give your money to one or more of the 18 casinos that call Black Hawk home - more casinos than Atlantic City (thanks again, Wikipedia).
The City manager is claiming that there isn't enough room on the roads for cars, busses, trucks, and bicycles. Never mind that there has never been a fatality in Black Hawk involving a bicycle. He says that it is a preventative measure. If you are caught by the police, it is a $68 fine.
Groups, such as Bicycle Colorado are pursuing legal action, since Black Hawk is restricting access on a state highway, while groups like Dismount Black Hawk are calling for a boycott of Black Hawk businesses, and a mass bike "walk" through Black Hawk (apparently, it is legal to dismount, and walk your bike through town) to protest this ordinance.
Personally, I wonder if this isn't some sort of publicity stunt. Black Hawk is a fly speck - literally - on the map. The only thing it has going for it is gambling. It's little less than a wide spot on the highway between Denver, and more scenic areas. But this fly speck has the cycling world in an uproar, and has made news worldwide. The ordinance has been on the books since January, but it's only been since spring, when people get out on their bikes that this has exploded.