License To Steal: Nevada'S Gaming Control System In The Megaresort Age

By Jeff Burbank

These seven precedent-setting case studies taken from the files of the Nevada Gaming Control Board and Commission illustrate vital issues addressed in the first decade of Las Vegas' megaresorts.

• Language: English
• Publisher: University of Nevada Press
• Release date: Aug 1, 2012
• ISBN: 9780874174724

Book preview

DuCharme.

Preface

Before I arrived in Las Vegas in 1987, my experience as a journalist in San Francisco, Washington, D.C., and Los Angeles was mainly writing news stories about the typical goings-on in overbuilt suburban areas—development issues, redevelopment issues, schools, and traffic congestion. But Las Vegas was a much more invigorating place for a news reporter with the desire to cover the strange and unusual. Compared to where I had been, the town was wholly different—slot machines in supermarkets, gas stations, and laundries; limousine services offering rides to legal rural brothels; and a local government and populace that were absolutely pro-development. Not long after joining the staff of the daily Las Vegas Sun in October of that year, I was writing stories on things such as Nevada's state brothel lobby, wealthy but unsuccessful Japanese casino owners, on-the-job illegal drug use by casino workers, call girls (with beepers) who serviced casino customers, and a mayor of Las Vegas who, as a slot machine sales manager, sold machines to casino operators after voting in favor of their requests for more machines. The Sun's newsroom itself was completely unlike any other newsroom I had been in. Each week during pro football season, for instance, a reporter or an editor would go to the managing editor, the city editor, the copy editors, and the reporters to collect their picks for the week and then drop the picks off at the sports book of a local casino. Once, a Sun reporter, after winning money in a media poker tournament at the Binion's Horseshoe casino, announced he was going to a pawnshop so that he and his wife (a frequent video poker machine player) could finally get their wedding rings out of hock.

One thing I learned quickly about Las Vegas is how self-conscious and defensive residents of this desert valley can be about the area's peculiarities and how sensitive some are about the opinions of out-of-towners. Since the city is necessarily dependent on the gaming industry and the whims of tourism, its casino, hotel, and convention officials spend tens of millions each year promoting its good side throughout the country This up with Las Vegas mentality frequently carries over to the town's print and broadcast news coverage of people and events. The Las Vegas news media often appear to play it safe, with a homeboy, wide-eyed, public relations approach to news stories, particularly about the casinos and entertainment offerings on the Las Vegas Strip.

I observed the town's sensitivity almost right away at the Sun. As the paper's new business reporter, I was instructed to cover things unrelated to the city's ubiquitous gaming industry What I had heard was that more than a year before I was hired, the Sun's gaming reporter wrote a story that apparently offended a local casino figure. The reporter left the paper soon afterward, and Sun publisher Hank Greenspun, tired of hassling with his casino friends and foes, abruptly instructed his managing editor not to replace the position. To take any future heat from the industry off the Sun, so to speak, the task of writing gaming stories for the publication fell to the Las Vegas bureau of United Press International, then headquartered inside the Sun's newsroom. But after writing stories on nongaming topics for a couple of months, I decided to try to slip in a few gaming articles. I gradually wrote more gaming-related stories with no apparent objection from management. Greenspun didn't seem to care or notice. Yet, even though my stories got into print, my editors at times raised objections when the articles appeared, in their minds, to make the town look bad. A story I did on trick rolls by prostitutes (who drugged the drinks and then robbed the wallets of their customers) in hotel-casinos angered one editor who threatened to punish me if I wrote on the subject again. One of the higher-ups at the paper also objected to a story I did on legal brothels in Nye County (about 65 miles west of Las Vegas), a potentially embarrassing subject matter that he thought was better left uncovered. Why did you have to write on that again? he asked. And a casino owner once objected to one of my stories so much that he pulled all his advertisements (temporarily) from the Sun. But, finally, the Sun's managing editor quietly acquiesced and allowed me to report on gaming full-time—the best beat in town.

Most of the chapters in this book are based on stories I covered while at the Sun and, later, its crosstown rival, the Review-Journal The period, from the late 1980s to the mid-1990s, was a pivotal time for the gaming industry, for which Las Vegas is as central as Detroit is to cars, Silicon Valley is to high-tech, and Winston-Salem, North Carolina, is to tobacco.

In 1988, Congress passed the Indian Gaming Act, which permitted American Indian tribes to sign agreements with states to operate forms of gambling that are legal in the state. That started the rush toward legalization. Legislatures in South Dakota, Iowa, and other states soon began permitting, in selected cities, most types of casino gaming available in Las Vegas and all over Nevada. By the early 1990s, about two dozen states allowed casino gaming in one form or another on riverboats or on land. In Las Vegas a record number of new visitors and the availability of junk bond financing ushered in the age of the so-called megaresort: massive hotel-casinos with new, multi-million-dollar attractions and shopping opportunities in addition to gaming. The first of the megaresorts was the $640 million, 3,400-room Mirage hotel-casino in 1989; followed by the $290 million, 4,000-room Excalibur in 1990; and then the Luxor, Treasure Island, and MGM Grand (the latter built with a record 5,005 rooms at a then-record cost of $1 billion) in 1993. For a while at least, family vacationers, not just serious adult gamblers, drew the attention of casino marketing executives on the Strip. One by one, private, family-owned casinos, such as Palace Station and Binion's Horseshoe, went public and sold shares on the stock market to raise money for renovations, expansions, acquisitions, and new casinos. Gaming companies based in Las Vegas successfully entered the new out-of-state gaming jurisdictions.

The rise of the megaresort era upped the stakes for survival in the Las Vegas gaming scene. The influence of the old, individual, risk-taking, quirky, and in some cases downright strange casino operator was declining. The rules and judgments of Wall Street, a presence in Las Vegas since the late 1960s, had virtually taken over the casinos on the Strip and elsewhere in town by the early 1990s. And the stakes grew ever higher. From July 1, 1996, to June 30, 1997, the Nevada State Gaming Control Board reported that Nevada's gaming industry employed more than 188,000 people, grossed $7.6 billion—about two-thirds of it in the Las Vegas area—and paid $445 million in taxes, equal to 33 percent of the state's operating funds.

This book focuses on major licensing and policy issues considered by Nevada's gaming regulatory bodies—the Nevada State Gaming Control Board and the Nevada Gaming Commission—during that absorbing period in time. I chose the subjects for the first seven chapters from among the most controversial and unusual issues considered by the board and the commission in those years. For some reason, this particular era—a few years before and the early years after the first wave of modern megaresorts in Las Vegas—produced some of the strangest situations ever considered by state gaming regulators. Some former Nevada gaming officials I talked to for this project told me that regulatory matters in Las Vegas in the late 1990s were tame by comparison.

Most of the situations covered in these chapters prompted the board and the commission to stiffen enforcement of existing rules and to make crucial, if at times late, changes in state gaming statutes that either prevented the problems from happening again or provided a precedent to guide regulators in the future. It holds true, however, that almost any applicant for a nonrestricted license (tables games and/or 16 or more gaming machines) or a restricted license (15 gaming machines or less) in Nevada can raise an unexplored issue or a new policy dilemma for the board and the commission.

The chapters describe how the board and the commission dealt with such often subjective issues as how to decide who is suitable to receive a gaming license, how to regulate new computerized gaming machines, how to punish violators of casino accounting regulations, how to make sense of and pass judgment on complicated financial deals involving casinos, how to investigate license applicants from foreign countries, and even how to deal with a rare case of corruption within the gaming board itself.

While the book essentially examines case studies of the ways the board and the commission approached these challenges, I treated each chapter as I would an individual news feature story, that is, by including significant elements—such as criminal investigations, lawsuits, and adverse publicity—to give the reader a fuller picture of each case.

The introduction is meant to serve as an overview of the history of legalized gambling in Nevada from the mid-19th century up to nearly the end of the 20th century. While surveying books and other materials for this history, I noticed that little had been written about Las Vegas and Clark County in the years leading up to the legalization of casino gambling in Nevada in 1931 and the decade or so that followed. The results of my research into this period—based on the minutes of meetings by city and county commissioners from the 1920s to the 1940s—provide new insight into this period and for that reason are included at length in the introduction. A series of brief profiles of current and former members of the board and the commission are outlined in chapter 8. In the introduction and in each chapter, I've interspersed my own reporting and recollections with other sources of information—including books, news articles, and people whom I interviewed for this book—that are cited numerically in the endnotes to each chapter.

I want to acknowledge the following people for their time, aid, and insight during the research and writing of this book: Dennis Amerine, Jimmy Bryson, Carole Case, Joseph Cronin, Gerald Cunningham, Steve DuCharme, William R. Eadington, Marilyn Epling, Ron Farrell, Char Faulkner, Gary Harris, Paul Hejmanowski, Ronald Hungridge, Charlotte Matanane, Lisa Miller-Roche, Shannon Nadeau, Owen Nitz, John O'Reilly, Robert Peccole, Gregory Peters, Paul Pusateri, Thomas Roche, David Roger, Michael Rumbolz, Scott Scherer, Frank Schreck, David Thompson, William Urga, Sue Wagner, and Ellen Whittemore. I also want to thank Marsh Starks and the photo staff of the Las Vegas Sun for providing most of the photos used in the book. Kudos as well to Michael Green, a professor of Las Vegas history at the Community College of Southern Nevada, for providing valuable suggestions and assistance in editing the manuscript. I also want to acknowledge those I do not mention here who spoke off the record but who nonetheless contributed to this volume. I further want to kindly thank Trudy McMurrin of the University of Nevada Press for her help and continued enthusiasm for this project.

Preface to Paperback Edition

This book explores some of the most intriguing cases investigated by Nevada's Gaming Commission and the State Gaming Board in Las Vegas from the late 1980s to the mid-1990s, a time referred to here as the megaresort age. These cases are of importance today, because they set precedents and standards, few of which have been violated since. Cases pursued by the board and commission these days are positively tame by comparison.

The megaresort age was certainly a unique period, during which Las Vegas's casino industry underwent a major transition. Las Vegas entered this new era in the late 1980s. The vestiges of organized crime had been removed from the city by then. Kansas City mobsters and others involved in the Argent Corporation skimming case were indicted in 1983; Tony Spilotro, the Chicago outfit's representative in Las Vegas, was killed in 1986; and Frank Lefty Rosenthal was placed in the state's List of Excluded Persons in 1988 (see the introduction). In the 1990s, most of the famous-name hotels from the 1940s and 1950s were either torn down or upstaged by modern high-rise hotel-casinos on the Strip, financed with hundreds of millions raised by Wall Street bankers and investors. The bar was being raised for people considered suitable enough to warrant a privileged state-gaming license, or to continue to hold one. At the same time, however, the board and commission were struggling to stay ahead of criminals in understanding the increasingly complex technology of computerized gaming machines.

The megaresort age, which began with The Mirage hotel in 1989, continues to flourish; the Las Vegas tourist and convention business grossed $33.7 billion in 2004. But Las Vegas did show signs of weakness along the way. A year after this book appeared in hardcover in 2000, business among the megaresorts on the Strip came to a virtual halt. On September 11, 2001, anti-American Al-Qaida terrorists, mostly from Saudi Arabia, hijacked commercial airliners and crashed them into the World Trade Center in New York and the Pentagon in Washington, D.C. For security reasons, the U.S. government ordered airlines grounded for three days, but for months thereafter air traffic coast to coast fell dramatically as worried Americans put off air travel plans.

With tourism down nationwide, Las Vegas was one of the cities hardest hit by the loss of domestic- and international-airline passengers. Already suffering from a soft year in gaming revenues after the hot national economy of the 1990s had cooled off in early 2001, the casinos on the Strip reacted swiftly to the downturn by laying off 15,000 workers and offering guest rooms at steep discounts. For the year, Clark County's gaming revenue fell by .5 percent to $7.6 billion compared to 2000. Even a year later, Las Vegas still felt the effects of 9/11. U.S. travelers slowly started to come back to town by September 2002, when gaming revenues rose an encouraging 7.5 percent on the Strip. But foreigners, who made up most of the city's high-rolling gamblers, were still wary of flying overseas. Money won on the Strip from the table game baccarat, a high-roller favorite, was down 35 percent. The only new megaresort to open during the period, the Aladdin—rebuilt to the tune of $1.2 billion with a large new indoor shopping mall—filed for bankruptcy.

But with new security measures in place, and no repeat attacks in the United States, Americans returned to town, again seeing Las Vegas as a fun and economical place to stay for a few days. By the two-year anniversary of the 9/11 attacks, the Las Vegas tourism economy showed signs of complete recovery. In January 2004, when the approximately 40 casinos on the Strip reported winning 12.3 percent over January 2003, the industry essentially declared victory. For the 2004 fiscal year, Clark County's gaming revenues totaled $8.2 billion. With healthy amounts of cash now flowing in once again and room occupancy high, a phase in the megaresort era that began in 2000 with MGM Grand's $6.4 billion takeover of Mirage Resorts—multibillion-dollar megamergers—resumed. In 2005, both the U.S. government and Nevada gaming authorities approved MGM Mirage's bid to buy the Mandalay Resort Group for $8 billion. The merged companies would control close to half of the 134,000 guest rooms on the Strip. Meanwhile, in another potential pairing of major Strip players, Harrah's Entertainment was intent on buying Caesars Entertainment for even more, $9.4 billion. The board and commission in 2004 had allowed smaller, though significant, mergers involving Las Vegas casino firms, including the Boyd Group's $1.3-billion buyout of Coast Casinos and the $1.4-billion purchase of Horseshoe Gaming by Harrah's.

The events caused by the 9/11 attacks easily overshadowed the gaming regulatory issues confronted by the board and commission, especially when compared to what the system faced in the transition years of the 1980s and 1990s. One thing that did not change from 1999 to 2004, despite the rise in gaming win in Nevada from $8.4 billion to $10.1 billion, was the gaming board's relatively small operating budget—from $25 million in fiscal 1999 to $35.2 million in 2004, with the addition of only 6.5 new employee positions (i.e., 439 versus 432.5 in 1999).

New regulations adopted by the board and commission in 2000 and 2001 addressed concerns from both the public and the industry. In an effort to keep slot machines aimed at adults and not children, a new rule prohibited the operation of machines designed after cartoons, TV shows, or other kid-related activities aimed at people less than twenty-one years old. However, in January 2001, the board and commission approved slot games based on The Addams Family and The Munsters TV programs from the 1960s and the Pac-Man video game from the 1970s. That same month, the board withdrew the state's historic ban on wagering on college sports teams based in Nevada, in the face of opposition by the National Collegiate Athletic Association, which had sought to prohibit gambling on all college sports.

Perhaps the biggest case handled by the gaming board in the past five years followed the discovery in 2003 of a high number of casino accounting violations of State Regulation 6A committed at The Mirage. Mirage casino manager Christopher Morishita was fired after falsely stating to casino executives that he had filed 14,900 cash transaction reports (CTRs) with the Internal Revenue Service, first in 2000, then from April 20, 2001, to October 6, 2002, and again from November 23, 2002, until January 6, 2003. Mirage executives had told board auditors that the forms, showing cash exchanges at the casino of $10,000 or more, had been sent to the 1RS. The forms had been filled out but not sent.

Morishita was arrested by gaming-control agents, convicted on one criminal charge, and sentenced to three years' probation. MGM Mirage, faced with a 92-count complaint filed by the board, agreed to pay a $5-million fine and to institute new internal control measures. The company also terminated about a half-dozen employees who worked with Morishita. Weeks later, Park Place Entertainment (later renamed Caesars Entertainment) paid a $75,000 fine for its own violations of Regulation 6A, this time involving two incidents in which employees failed to require high rollers from Texas to fill out CTRs (both employees were fired).

In another breakout case, the board came down on the off-Strip Hard Rock Hotel for racy and sexually suggestive print advertisements and billboards used to market the casino to young adults in 2003. Board member Bobby Siller complained about the content, saying that the ads were offensive to the public and damaged the gaming industry. Hard Rock executives, who fought with the board in hearings and in the news media, begrudgingly agreed to create a compliance committee to monitor hotel advertising. The board later determined that the casino had failed to stop using risqué themes in its promotions; it issued a three-count complaint, and the gaming commission forced the Hard Rock to pay a $100,000 fine for the violation in November 2004.

Hard Rock executives were not the only ones unhappy with the board about its stance. In March 2005, Mike Schneider, a Republican state senator from Las Vegas, criticized the board for being moral cops and introduced a bill in the state legislature in Carson City that would set punishments for casino advertising only if it proved false, deceptive, or misleading. Schneider withdrew the bill a month later.

In April 2005, Steve Wynn, who built and opened The Mirage in 1989, opened the $2.7-billion, 2,700-room Wynn Las Vegas resort at the site of the former Desert Inn hotel. Wynn, who received his license in March, was helped by a quarter-billion-dollar investment from Kazuo Okada, the owner of Universal Distributing of Nevada, which is a Japan-based slot company profiled in this book.

In the months leading up to the opening of Wynn Las Vegas, the state changed its longtime rules requiring all licensed gaming activities be open to the public. At the request of Wynn and of Sheldon Adelson's Las Vegas Sands company, owner of The Venetian Resort Hotel Casino, the commission permitted casinos to operate private gaming salons where high rollers may gamble out of the public eye. The state legislature passed a bill in 2005 that would permit casinos to charge admission at special events where people gamble.

Licensed to make money as never before, the resorts lining the Las Vegas Strip looked ready to usher in perhaps the town's best economic times ever in 2005. However, thanks to recent mergers—and prospects for new ones involving old, vulnerable properties—the Strip's hotels will be in far fewer hands. The next phase could be multibillion-dollar mixed-use resorts combining hotel rooms, gambling, condos, shops, and nightclubs. MGM Mirage has proposed one on the Strip, called Project City Centre, at the 66-acre site of the aging Boardwalk Casino.

As more cash flows into town, the capital for future development on the Strip will continue to rise. And as long as Las Vegas keeps changing, its seemingly endless appeal could last indefinitely. With hundreds of millions in revenues, and billions in debts to service, licensed companies are sure to follow the state's gaming rules carefully. Still, with that much at stake, the Las Vegas gaming industry—more powerful than ever, and getting its way more than ever—knows that if the process does not suit its purposes, it can seek to change the process. Will Nevada's gaming control system be able to stick to its rules and regulations (and the spirits of both) in the face of this pressure?

Introduction

An Overview of Gambling in Nevada 1861 to 1999

Gambling, whether prohibited or regulated, has played a major role in Nevada throughout its more than 135 years of history. The unprecedented expansion of legalized casino gambling into nearly half the United States in the 1990s came after state and Indian tribal governments sought to duplicate Nevada's economic success. The state governments used Nevada's approach as a guide for taxing, licensing, and controlling legalized gambling. But Nevada carries an association with gambling like no other state.

A former territory of Spain and Mexico, Nevada—which means snow clad in Spanish—was first seen on maps in the 16th century. The state, mostly within the Great Basin, an ancient former sea, now covers 110,540 square miles, including the most remote land in the continental United States.¹ The U.S. government owns about 86.5 percent of the state, most of which is national forest land, military land, and Indian country.²

Throughout its history as a state, Nevada has taken full advantage of the states' rights provision in the U.S. Constitution. Nevada used these rights to engage in what Gilman M. Ostrander, author of Nevada: The Great Rotten Borough, 1859–1964, called legal mischiefs³—liberal divorce and marriage laws, legal bordellos, easy incorporation, and legal gambling. Thus, it has been Nevada's legacy to enact laws that accommodate the human impulse for quick riches, marriage, divorce, or sex. The legacy got its start in the mid-19th century with the lure of riches, and the rest followed.

Before the 1850s, Nevada's primarily barren western landscape provided little to the early pioneers beyond fur trapping or a gateway to California. But in 1858 the discovery of the huge Comstock lode beneath Virginia City in northern Nevada started the silver rush that attracted thousands of prospectors and adventurers, absorbed by the idea of making a fortune. A similar desire, accompanied by boredom and a need for entertainment after work, would prompt silver miners, gold miners, and others—who had arrived in northern Nevada from 39 foreign countries and every American state—to haunt Virginia City's bordellos and its 42 saloons.⁴ Nevada's population surged to more than 16,000 in 1861 from just 6,857 in 1860.⁵

But as Nevada established this rowdy identity, its politicians moved rapidly to abolish gambling. In 1861, Congress designated Nevada a territory, and in October of that year, the territorial legislature, in its first session, adopted the common law of England,⁶ designated Carson City as the state's capital, and made operating games of chance a felony—punishable by two years in prison, a $500 fine, or both—and wagering a misdemeanor. Legislators agreed to award district attorneys $100 per conviction for gambling offenses.⁷ Nevada's first territorial governor, a native New Yorker named James Nye, was staunchly antigambling. In a speech before territorial legislators, Nye declared that of all the seductive vices extant, I regard that of gambling as the worst. It holds out allurements hard to be resisted. It captivates and ensnares the young, blunts all the moral sensibilities and ends in utter ruin.⁸ But lawmakers would soon realize that gambling was difficult to control out of existence in Nevada. Gambling convictions were rare. Legislation did not stop underground operators from running games of chance to entice the freewheeling hordes of silver miners. In 1863, the beginning of a second mining boom, Virginia City was a compilation of taverns, Victorian mansions, tent neighborhoods, boardinghouses, a grand opera house, and the four-story International Hotel. The city also boasted of a lifestyle that featured gambling—specifically the card game faro—operating 24 hours a day for the convenience of miners from all shifts.⁹

While the Civil War was being fought back east, Nevada's lucrative mining industry was valuable to the Union side. The territorial legislature had pledged support to President Lincoln in 1863, when the take from the Comstock was $12.4 million a year, more than double the $6 million in 1862, although the output merely equaled expenses.¹⁰ In March 1864, Lincoln, seeking another loyal state to vote for the 13th Amendment abolishing slavery, signed the Nevada Enabling Act, allowing the territory to seek statehood. A constitutional convention convened in Carson City, on July 4, 1864, and drafted a constitution that included a tax on the net proceeds of mines. After voters approved the document, Nevada was proclaimed a state on October 31, 1864, in time for it to vote for Lincoln's reelection and for its two newly elected senators and congressman to scurry to Washington to vote for the 13th Amendment. But in its maiden gathering that year, the Nevada state legislature, seeing how much the territory's gambling law had been ignored, reduced the punishment for operating games of chance to a misdemeanor. Gambling was now even easier to offer. Public posturing against it, however, continued. Governor Henry Blasdel, a fervent opponent of gambling, vetoed a bill in 1865 that would have permitted it as a legal, licensed activity.¹¹ But in 1869, the legislature overrode his second veto of the bill, and gambling became lawful in Nevada. It was Nevada's first effort at controlling and licensing gambling. The state charged operators licensing fees of $250 to $500 per quarter and prohibited gambling in the front rooms and first floors of buildings.¹²

In the last decades of the 19th century, as mining in the state declined, gambling remained legal in Nevada, with the legislature prescribing new policies aimed at control. The state set penalties for offering gambling without a license, excluded minors from gambling businesses, and made county sheriffs responsible for enforcement.¹³ Proceeds from gambling license fees were distributed to the counties and cities. In 1879 a new state law made it a misdemeanor to permit cheating in licensed gambling halls.¹⁴ The state even allowed operators to offer gambling on first floors.

But soon after the turn of the century, the state experienced a mood swing. Many of Nevada's top politicians banded together with Progressive reformers and anti-alcohol organizations united in opposition against gambling on moral grounds. The national prohibition movement caught steam, and in 1909 the state legislature agreed to ban gambling and make it a felony again in Nevada. What followed was a repeat of the 1861 experience—games of chance continued in backrooms. Many Nevadans, in keeping with the western libertarian tradition, seemed ambivalent about gambling, legal or illegal.¹⁵ Bribery of law enforcement officials by gambling operators was common, as was organized crime involvement in gambling activities.¹⁶ In its next session in 1911, the legislature moved to permit poker games, only to make all gambling illegal again in 1913 and then legalize nonbanking poker games (where players alternated the deal) in 1915. While operators sought and received city and county licenses for poker games, most players enjoyed the added appeal of illegal, but tolerated, casino gambling in backroom speakeasies throughout Nevada. In 1915, the legislature permitted slot machines and social games awarding drinks, cigars, or other prizes worth no more than $2.¹⁷

With the outbreak of World War I, Nevada's copper mining, livestock, and agriculture industries flourished with the increased need for goods.¹⁸ In the 1920s, copper and other mining accounted for most of the state's economy, thanks to demand from American industries.¹⁹ By 1929, the state's economic future looked bright and was unaffected, at least at first, by the October 1929 stock market crash on Wall Street. In the next couple of years, the state received a settlement of almost $600 million from the federal government for money loaned by Nevada during the Civil War.²⁰ The U.S. government also decided to build a $3.5 million munitions storage depot in southwestern Nevada and in April 1931 to begin the $125 million Hoover Dam project on the Colorado River south of Las Vegas. Governor Fred Balzar told legislators in 1931 that the state was on solid financial standing thanks in part to the federal spending.²¹ But Balzar painted an all-too-rosy picture of the state. As the rest of the country suffered from the Depression, Nevada's top industries, mining and agriculture, were in deep decline. Agriculture, which attracted a gross income of $22.1 million in 1928, fell to just $6.4 million in 1932.²² Gross income from mining in 1932 was only a seventh of what it was in 1928 ²³

In 1931, the new legislature believed that the time was right to legalize gambling again, because of the lack of success of its prohibition to contain it, and that legal gambling might add to the state's attractions and enhance its economy. Legislators lifted the 20-year-old ban in March 1931, permitting most casino-type games. Assemblyman Phil Tobin of Humbolt County in northern Nevada is credited as the sponsor of the legalization bill, but several other legislators were said to have thought about introducing it.²⁴ There was also an indication that Clark County officials were in favor of it early on. On January 24, 1931, the Reno Evening Gazette wrote that no one will admit having been approached to offer such a bill, but all of the legislators profess a lively interest in one. None of the Clark County delegation has an idea in mind of introducing a gambling bill, although the latest agitation started in that county.²⁵ State lawmakers at the time also thought that liberalizing divorce laws would attract visitors and business to the state. In May 1931, legislators reduced the length of residency for divorce from three months to only six weeks.²⁶

The new gambling law mandated that Nevada's county governments were responsible for granting licenses with five-member boards, including the three county commissioners, the sheriff, and the district attorney. Individual cities were also given the authority to grant licenses for gambling within city borders. One-quarter of the fees paid by gambling licensees to the counties went to the state, and the counties got the other 75 percent. Incorporated cities got one-quarter of the fees from the licenses they granted, with one-half going to the county and a quarter to the state. For the city of Las Vegas and for Clark County, legalized gambling would be a godsend. So too would be the repeal of laws banning another vice—the sale and consumption of alcoholic beverages—two years later. Las Vegas enjoyed its first gaming boom during the 1931–1936 construction of Hoover Dam. Still, while gaming in the 1930s laid the foundation for the casino industry in later years, gaming did not produce a large amount of revenue during the decade.²⁷

Gaming in Las Vegas and Clark County from the 1920s to 1940s

While gambling was the more popular term used outside Nevada, the word gaming was coined in the state since at least the 1920s in the context of regulation. In the city of Las Vegas during the 1920s, when only poker-related games were permitted by law, licenses for gaming were routinely approved by the Las Vegas Board of City Commissioners after applications had been reviewed favorably by the city's police and fire commissioner. At a meeting held January 4, 1924, for instance, city commissioners approved a gaming license for A. T. McCarter for two poker games at the Exchange Pool Hall, after the same having heretofore approved by Police and Fire Commissioner [C. R.] Shield.²⁸ The commissioners also granted gaming licenses to three partners in the Las Vegas Bar for seven poker games and a license to the owner of the Big Four Club for three of the games. The city fathers, however, ordered an application by E. H. Edwards for a license for two games at the Arizona Club to be held up for investigation (Edwards received a license at the following

Reviews for License To Steal

[figre · Rating: 3 out of 5 stars]

How do you take something as exciting as crime and stupidity in Las Vegas and make it boring? Jeff Burbank does a pretty good job of showing us how. And, really, the reason becomes evident quite quickly – Burbank cannot give up his reporting background, his need to stick with transcriptual facts, to make the stories entertaining.And there is great opportunity for entertainment. We have here the story of the casino owner who was accused of “worshipping” Nazis, a psychological scheme to make computerized slot machines look like they were about ready to pay off, a failed sports book that was intended to make the sport of kings a kingly sport, and a number of other great little tales of how things have gone wrong.But the potential excitement is drug down in the details. Far too often, Burbank “goes to the transcripts.” Sure, sometimes what occurs is almost laughable, but those “actual words” are not wrapped around enough story to keep them moving. And Burbank either cannot or will not flesh out the stories with anything that makes the people real and the stories compelling.I read this shortly before a trip to Vegas, and I kept looking at the slot machines and pit bosses and gaming tables and all the other accoutrements of the casino with a more jaundiced eye.Imagine how much more jaundiced I would have been if the stories had been just a little bit more engrossing.