The dashes should be placed after "basketball" and before "is": Basketball —which has long been thought to be an inner city game — is extremely popular in the suburbs.
A dash is a little horizontal line that is used in the middle of a sentence to indicate a pause or a sudden break. In this excerpt, the dashes are included to separate the independent clause from the relative clause. In other words, the dashes have been included to separate essential information from additional information ("which has long been thought to be an inner city game"). Dashes are generally used to make a piece of writing more sophisticated.