History of Gaming

Nevada

Evidence of Gaming Goes Back to 300 B.C.

• American Indians (Washo) in southern Nevada gambled on:– Foot races and stick and rope games;

– Stakes were baskets, eagle feathers, jewelry, buckskins, or as simple as a hit on the head or hand.

Before Statehood

• Before creation of Nevada territory, residents adopted gambling as a way of life.– Mining towns sprang up as fast as news

of the discovery.

– In addition to supplies, mining towns provided entertainment in form of saloons, women, and gambling.

1861 Nevada Becomes Territory

• First territorial governor, James Nye of new York, opposed gambling.– Appointed by Abraham Lincoln.

– At Nye’s urging, first territorial legislature passed the first law prohibiting all forms of gambling.

First Anti-gambling Law Strong

• Running gambling establishment was a felony and betting was a misdemeanor.

• Bounty of $100 offered per conviction to encourage prosecuting attorneys to take action against gamblers.

• As tough as appeared, largely ignored.

1864 Nevada Becomes a State

• During 1st legislative session territorial prohibition re-enacted.– Penalty reduced from felony to

misdemeanor.

• First governor was Henry Blasdel.

1866 First Bill Drafted to Allow Gambling

• Year after statehood, bill allowing all forms of gambling was drafted and passed by legislature the following year.

• Governor Henry “chocolate and coffee” Blasdel vetoes legislation. Not enough votes to override.

1869 Vetoed Bill Re-introduced

• Bill re-introduced, passed, and again vetoed by Blasdel.

• Veto overridden.

• Nevada has law legalizing gambling.

1869 Bill

• Operators paid a fee for right to operate casino.

• Not permitted in front rooms where it could be viewed by passers-by.

• All signs and advertising was prohibited.

• First operators required to be licensed.

– Those under 17 could not gamble.

• Typical casino: one faro game, one roulette, three-card monte layout, and a few poker tables.

1869 Bill (Continued)

In Late 1870’s Northern Nevada Was Population Center• Virginia city had population of 18,000:

– 39 groceries

– 15 butcher shops

– 1 library

– 1 theatre

– Over 100 casinos

1877 Law to Protect Families• To protect families from excessive

gambling.

“Family man has no right to squander any portion of money necessary to maintain family.”

• Allowed family members to notify saloon keepers that husbands (or fathers) were gambling excessively.

• Operators allowing those to gamble were charged with a misdemeanor.

• Act also limited gambling to second stories of buildings.

1877 Law to Protect Families (Continued)

1902 William Clark

• U.S. Senator from Montana, William Clark, owns san Pedro, Los Angeles, and salt lake railroad company.

• Wants to connect pacific ocean with great salt lake.

• Needs watering stop for his railroad.

• Buys 800 acres where downtown Las Vegas now located.

• Paid $55,000 for the land.

1902 William Clark (Continued)

Railroad Stop Needs a Town

• In 1905, Clark divides land into 1,140 lots and sells the town sites for a total of $250,000.

• County subsequently named Clark county.

Influx of Easterners

• Opposed gambling.

• In 1909 after 41 years of legal gambling, all forms were made illegal.

• Law became effective October 1, 1910.

• Prohibition ignored, gambling went underground.

Nevadan’s Had Grown Accustomed to Services Illegal Elsewhere

• Prizefights

• Easy divorces

• Gambling

Jack Johnson

• Born 1878 in Texas

• First black heavyweight champion

• Became champ in 1908

• Previous champ, Jim Jeffries (white), had retired undefeated in 1905– Refused to fight Johnson because he was black

Fight of the Century

Fight of the Century

“Fight of the Century”

• Jim Jeffries comes out of retirement to “beat” Johnson– Fight held in Reno – July 4, 1910

• 22,000 attended fight

– Billed as the first“the great white hope”

– Johnson “kos” Jeffries in 15 round

– First time Jeffries knocked down

– Johnson earned $117,000 for fight

“Fight of the Century”

• Race rioting breaks out – Films of victories over whites banned

for fear of more riots

Jack Johnson

Largely hated by most white America– Married 3 times to white women

– Romantically involved with• German spy Mata Hari

• Sex symbol Lupe Velez

• Mae west

Persecution of Johnson• In 1912, Johnson frequently seen in

company of white secretary Lucille Cameron– Charged under Mann act for taking Cameron

across state line for “immoral purposes”

– Court judge was Kenesaw mountain Landis

– Johnson marries Cameron

• Convicted in 1913 of Mann act– Sentenced to 1 year and a day in prison

– Flees U.S. While under appeal

– Spends 7 years on “lam”

Persecution of Johnson• Fights jess Willard in Havana in 1915.

– Loses by ko in 26th, viewed by most as throwing the fight to be able to return to U.S.

• Returns to U.S. In 1920.– Sent to Leavenworth.

– Serves 1 year.

• Killed in auto accident in 1946 (68 years old).

During Life, Jack Johnson• Owned jazz band

• Owned night club

• Acted on stage

• Drove flashy sports cars

• Seen walking pet leopard while sipping champagne

• Had gold teeth and gold-handled walking stick

• Charter member in boxing hall of fame

1911 Card Games Legalized

• Social games like poker allowed provided operators paid off in cigars, drinks, or merchandise of nominal value.

• No percentage could be taken and the deal changed.

1913 All Forms of Gambling Outlawed Again

1915 Prohibition Relaxed

• Social games again permitted if deal changed.

• Nickel slots permitted if they paid off in cigars or drinks.

Events That Changed Course of Nevada History

• Stock market crash of 1929 and subsequent depression.

• Funding of Hoover dam within 3 months of crash.

Depression’s Influence

• 1931 was one of the worst depression years.

• State needed money and stimulus for business.

A.B. 98, A.K.A. “Wide Open Gambling Bill”

• Phil Tobin, 29 year old assemblyman from Winnemuca, introduces bill.

Legislators Felt Gambling Would• Provide state with revenues through

gambling taxes.

• Enhance business in general.

• Most importantly: with coming of Hoover dam it was believed federal officials might move to close down Las Vegas’ illegal gambling.

A.B. 98 Signed Into Law March 19, 1931

• Same legislature lowered the residency requirements for divorce from 3 months to 6 weeks.

• No method of regulation included in bill. Cheating and operating without license were forbidden but no state control provided.

Games Legalized

• Faro

• Monte

• Roulette

• Keno

• Fan-tan

• Twenty-one

• Blackjack

• Seven and a half

• Big Injun

• Craps

• Klondyke

• Stud poker

• Draw poker

• Slots

New Source of State Revenues

• Card games charged $25 per month.

• Slots charged $10 per month.

• Table games charged $50 per month.

• 75% to county, 25% to state.

• Sheriff collected taxes.

Bull Pen Casino• 1932 gambling permitted at state

prison.

• Operated by inmates (game boss).

• Offered poker, 21, craps, chuck-a-luck, roulette, and race & sports.

• Each game boss required to contribute to inmate welfare fund.

• Closed in 1967.

Northern Club

• First gaming license issued in Nevada.

The Meadows Supper Club

• Opened in Las Vegas on may 2, 1931.

• Built by Tony Cornero, cost $300,000.

• Had 100 rooms– grandest club in Nevada.

• Adjacent airport– place to buy prohibited liquor.

Bad Luck for the Meadows

• 1932 hotel burned down.– Firemen refused to fight fire.

• Club went bankrupt in 1937.

• Tony Cornero later operated California gambling ship SS rex.

Casino Marketing Begins

• 1935 Raymond “Pappy” Smith and son, Harold, open Harold’s club in Reno– at a cost of $500.

• First to:– Open casino to street.

– Introduce mouse roulette.

– Hire women dealers.

Smith First to Conduct National Ad Campaign

• At one point Harold’s club had over 2,300 billboards placed on major U.S. Highways.

Bill Harrah’s Bingo Club

• Opened in 1937.

• Marketed to those outside the state of Nevada.

• Introduced corporate management philosophies to gaming industry.

Birth of the Strip

• Thomas Hull opens El Rancho Vegas on highway 91 in 1941.

• El Cortez opens downtown in 1941.

• In 1942 Last Frontier opens.

Bugsy Siegel

• Born 1906 in Brooklyn, New York.

• Began career in crime by extorting money from Jewish pushcart peddlers in NYC

• Teamed up with Meyer Lansky at the age of 12.

• Mafia leaders sent Bugsy to California in 1937.

• In California, Bugsy successfully develops:

• gambling dens.

• gambling ships (offshore beyond 12 miles).

• narcotics smuggling.

Off to California

While in California

• Developed nationwide bookmaker’s wire service.

Bugsy Comes to Vegas in ‘41

• Legislators legalize race horse betting.

• Bugsy’s Trans-America wire service provides race results.

Siegel, Lansky, Et Al, Owned Interest In:

• El Cortez, Last Frontier, and Golden Nugget prior to building of Flamingo.

The Planning of the Flamingo

• Bill Wilkerson, the founder of the “Hollywood Reporter”, had original idea for the Flamingo.

• Wilkerson’s idea:– gourmet food, big-name entertainment.

– movie stars and starlets in casino day and night (he had the contacts through Reporter).

Siegel, Lansky and Partners Buy In

• Bought 67% of Wilkerson’s project for $650,000.

• Flamingo’s initial projected cost: $1 million.

Bugsy and the Flamingo

• Total cost exceeds $6 million.

• Cost overruns involved extensive “skimming” by Siegel.

Flamingo Opens

• Casino opened December ’46 before hotel completed.– Was to have 97 rooms.

• Tremendously successful opening with many stars present.

• With no rooms to stay, guests either returned to L.A. or stayed downtown.

• Casino immediately begins to lose money.

• Casino losses forced closure Feb 1, ‘47 to await completion of hotel.

Flamingo Losses

Flamingo Reopens

• Casino hotel reopens March 1, 1947.

• Cost overruns and perceived theft of construction funds results in Lucky Luciano’s order to murder Bugsy.

• Bugsy murdered June 20, 1947 at the home of his girlfriend, Virginia Hill. He was 41 years old.

Downtown Las Vegas

Circa 1948

Howard Hughes Adds Legitimacy to Industry

• Millionaire arrives in Vegas in 1966 and starts buying casinos.

• Purchased 6 casinos on Strip and Harold’s Club in Reno.

• Justice Department and Gaming Commission concerned about his dominance.

Howard Hughes

• Born December 24, 1905 in Houston.

• Orphaned at 17, Howard takes control of father’s Hughes Tool Company.

• Father built company on patented rotor bit– revolutionized oil field drilling.

Hughes Moves to California• In 1926, at the age of 21, Howard

moves to California where he:– Produces “Hell’s Angels” in 1930,

– “Scarface” in 1932, and.

– “The Outlaw” in 1941.

• “Scarface” introduces Jean Harlow and Paul Muni to the screen.

Howard Hughes the Aviator

• Founded Hughes Aircraft Company.

• In 1935, piloted plane he had designed to a world’s land plane speed record of 352 mph.

• In 1937, in same plane, sets transcontinental flight-time record.

• In July 1938, sets round-the-world flight time record.

• Instrumental in the design of 8-engine wooden flying boat intended to carry 750 passengers.– Piloted the “Spruce Goose” on its only flight in

1947 (one mile).

• Same year he almost dies in a plane crash.

Howard Hughes the Aviator

Spruce Goose

• Built under Defense Department contract during WW II.

• Largest plane ever built.

• Built of plywood.

Hughes Credited With Inventing

• flush riveting plane design.

• Variable-pitch propeller.

Hughes Goes Into Seclusion

• Always an introvert.

• Goes into complete seclusion in 1950.

• Holds 78% of Trans World Airlines and loses control of organization by default.– He refuses to appear in court to answer

antitrust charges.

TWA

• Built TWA into a globe spanning airline.

• Sold his 78% in the public company for $546 million.– Used proceeds to purchase Nevada

interests.

• Aircraft company became one of the largest defense contractors.

Hughes the Addict

• As result of 1947 plane crash, Hughes becomes addicted to Codeine to relieve pain.– Injects himself daily.

– Obsessed with fear of germs.

Arrives in Las Vegas

• Arrives Thanksgiving Day in 1966 by private train.

• The 61 year old Hughes is transported on a stretcher in a van to the Desert Inn.

• In 4 years he becomes Nevada’s biggest casino owner and employer.

Hughes Life Style

• Seldom bathed and never brushed his teeth.

• Opened doors with Kleenex.

• Memos and phone calls were only means of contact with underlings.

• A workaholic, never took a holiday.

Hughes at the D.I.• Occupied entire 9th floor (penthouse)

– rented entire 8th floor so could not be “bugged” from below.

• Hughes occupied the smallest room of a three room suite.

• Never saw any of his subordinates face-to-face

– not even his chief of operations.

Hughes Purchase of the D.I.• Moe Dalitz allows Hughes to rent top 2

floors on condition he would be out in 6-weeks (before New Year’s Eve weekend).

• Dalitz pressured to allow Hughes to stay longer; expressed desire to sell D.I.

• On April 1, 1967, Hughes purchases D.I.

• Paid $6.2 million in cash and assumed $7.2 million in debt for the business. He assumed the lease on the property.

• Land owned by Harry Helmsley (wife Leona Helmsley).

• Bought 6 Strip casinos and Harold’s Club in Reno.

Hughes Purchase of the D.I.

April 5, 1976.

• 71 year old Hughes dies in plane over southern Texas.– Flight from Acapulco to Houston for

medical treatment.

Chronology of Casino Openings 1940-1969

• El Rancho Vegas ‘41

• El Cortez ‘42

• Last Frontier ‘42

• Golden Nugget ‘46

• Flamingo ‘47

• Thunderbird ‘48

• Desert Inn ‘50

• Horseshoe ‘51

• Sands ‘52

• Showboat ‘54

• New Frontier ‘54

• Dunes & Riviera ‘55

• Hacienda ‘56

• Tropicana ‘57

• Stardust ‘58

• Fremont ‘60

• Mint ‘62

• Castaways ‘63

• Aladdin ‘66

• Caesars Palace ‘66

• Four Queens ‘66

• Bonanza ’67

• International ’69

• Landmark ‘69