Why Nevada Legalized Gambling

Photo Courtesy (Nevada Casino History)
Old Reno Arch. Photo Courtesy (Nevada Casino History)

Nevada was established in 1850 as a part of Utah Territory. Later, it was the first state in the US to legalize gambling and set the stage for casinos that are found in so many states. After legalization in 1931, Nevada enjoyed the limelight as the only state with open gaming for almost 50 years until Resorts International opened in Atlantic City, New Jersey in 1978.

The state of Nevada held precious gold and silver resources, but when the mines closed-up there wasn't much economy left, and little to attract visitors.

However, since Reno was close to San Francisco, the town was able to entice people with plenty of Speakeasies, legal prostitution and easy divorce laws during the late 1920's. Adding legalized gambling while other states were cracking-down on slot machines and other forms of gambling seemed like just what the state needed. Today, it seems, they were right.

The Birth of Nevada

From 1841 to 1857, over 150,000 hardy souls took the long arduous trek across the Midwest to California. A few got to Nevada and stayed-on. Men were looking for work, families for new and better lives. Miners from the East were looking for instant wealth. Some homesteaded in hospitable locations along the Sierra Nevada Mountains.

Near the Sierra foothills, new residents of Genoa demanded self-government since they were so many miles from the lawmakers of Utah. Playing to their demands, President Buchanan signed an act establishing the Territory of Nevada on March 2, 1861.

Less than four years later, President Lincoln signed Nevada’s proclamation of statehood on Oct. 31, 1864.

The Comstock Lode

The Comstock Lode found in what became Virginia City, helped spur Congress to adopt Nevada as a state. The addition of Nevada also helped Lincoln with his reelection a week later, and the silver mined all over Nevada helped steady the economy of the state and made a few men millionaires.

New towns sprang up around gold and silver strikes, only to disappear just as fast when the veins ran out. It was a huge gamble to risk your life inside a hard rock mine, and it was a financial gamble to back the labor and construction needed to see if a mineral vein was a strike, or a bust.

In Virginia City, miners were paid $4 per day and spent their off-duty hours and their pay in the city's 150 saloons.  Drinking and gambling were a miner’s best friends, next to the occasional bath and some pleasant company.

Gambling was a fact of life in mining towns, so in the state's capital of Carson City, 36 delegates to the Constitutional Convention drafted a bill allowing all forms of wagering except lotteries. Governor Blasdel’s veto of the bill, but it was eventually overridden. New regulations came and went. When the gaming was legal, it was in plain site. When it wasn't, it was in basements and second floors, away from prying eyes. In 1910, the Anti-Gambling League of Reno (led by the Women’s Civic League) forced the legislators to once again outlaw games of chance, and that's the way it stayed for two decades.

Open Gaming

The games continued of course, and aside from the “offensive habit” of law enforcement looking the other way, a substantial amount of untaxed revenue was going into the pockets of businessmen engaged in offering gambling.

In 1930, a 29-year old Republican State assemblyman named Phil Tobin took a chance of his own.

Using a failed 1929 bill, the Winnemucca rancher (with some help from local gamblers and Humboldt District Attorney Merwyn Grown) put together a new bill for the legalization of gambling.  Plenty of influence was brought by the likes of Reno banker (and owner of the Riverside) George Wingfield, and he certainly helped it pass in the Nevada State Assembly and senate.

Governor Fred Balzar was quick to sign the bill into law on March 19th, 1931. Tobin originally become an assemblyman to help out his fellow cowboys, but the idea of taxing gambling seemed like a good idea too. The quiet rancher could never in his wildest dreams have guessed how much tax income the state would someday collect.

In downtown Las Vegas, the Northern Club got underway immediately.

Licensed by the Sheriff’s Department, partners Morgan and Stocker were legal on 3-20-31.  The Boulder Club and Las Vegas Club joined the Northern on Fremont St. by getting licensed on the 31st of the month. Also licensed was the Exchange Club at 123 S. 1st.

On the outskirts of town were two other early licensees: the Meadows in Meadow Acres (licensed on 5-2-31) and the Pair-O-Dice on Highway 91 (licensed on 7-4-31). Clubs across Nevada brought their gambling tables into full view and paid for their licenses.

In Ely, the Capitol Club was suddenly respectable, and down the street, so was the Miners Club. In Winnemucca it was the Central Club. In Elko, Newt Crumley licensed the Commercial Hotel just one day after legalization.  Yerington had (and still has) the L & L Bar.  The Owl Club at 50 S. Main Street in Fallon was licensed on the 21st, and the Tonopah Club was legal by the 23rd of March.

It was no surprise that so many clubs were ready to get licensed. They had the tables, they had the clientele, and now it was all legal, without the need for under-the-table payoffs to local politicians and deputy sheriffs. Now fees were paid above board, but still to the sheriff’s departments. Since that meant no extra cash for the deputies, you can bet that all the clubs thought twice about operating without a license!

In Reno

In Reno, just one day after the bill passed, the Bank Club began new construction. When finished, the club had a frontage of 55 feet, and a depth of more than 150 feet. Housed inside were three Faro tables, six craps tables, draw and stud poker, roulette wheels, chuck-a-luck, razzle-dazzle, hazard, a wheel of fortune and a dozen slot machines. Base pay for the all-men dealing crew was $15 per day. .

By the time of legalization, the bulk of the gambling business in Northern Nevada had fallen into the hands of a syndicate composed of a handful of men. The most powerful was George Wingfield, who had grown to prominence through the sale of mining claims in towns like Tonopah and Goldfield.

He was a ruthless businessman, and invested his time and money in buildings, casinos and prostitution. If it made money, he was in it.

By the early 1905 he was one of the most powerful men in Nevada, and by the 1920’s he ran Reno.  He controlled the flow of liquor and set-up his own banks. His most powerful allies were James “Jimmie” McKay, and William “Bill” Graham. The two were old-time boss gamblers who learned the ropes while working for Nick Abelman when he ran the Tonopah “Big Casino” and other spots where Wingfield was the landlord.  

They moved to Reno soon afterwards and had a financial interest in the Reno Social Club, Bank Club, the red light district (prostitution), and also ran the illegal gambling concession for George Wingfield in the Golden Hotel adjacent to the Bank Club. For most of this period, Ray Kindle was also an investor, but he acted only as a silent partner in the club.

Other casinos to come under the groups’ control were the Wine House, the Rex Club, the Country Club and the Gay 90’s.  The finest gambling house in the area was the “Willows.” Opened first by Rick DeBernardi, he had a little trouble keeping the property open. After coming to Reno, Graham and McKay took an interest. After some renovation, the club reopened with the new name.  A sumptuous restaurant was added and the club was a hit!

Nevada took advantage of its founders' pioneering spirit, and although often despised and shunned by the high-society of other states, rode the ups and downs of open gaming alone for decades. Today, 38 US states offer casino gambling. It just took a state with few other options to take the lead.