Token from the Old Cathay Club, a casino, restaurant and bar open in the mid-1950s in Reno, Nevada

1955-1966

Harry Chon, licensed operator of the gambling operations at the Old Cathay Club* in Reno, Nevada, found himself in an uncomfortable spot, under pressure from two parties, in 1956.

The story begins about a year earlier, when two other men, Horace Fong and his godfather, Moon Wah, applied unsuccessfully for a gambling license for the same property. Of the two, only Wah had casino experience, and he’d been convicted recently of tax evasion in California.

Soon after, Fong re-applied — this time with Chon named as the co-licensee — but to no avail because the Nevada Gaming Control Board (NGCB) deemed Fong unsuitable, likely due to his relationship with Wah.

Then Chon alone sought and was granted a gambling license to lease space from Fong and run a casino in it. Fong operated the other entities on the property, a restaurant and bar.

Rumblings Then Temblor

In spring 1957, the NGCB heard rumors that individuals other than Chon were running the gambling at the Old Cathay. It was verboten to change casino interests without approval first from gaming regulators, so agents investigated.

Chon confided in them he’d hired a man named Fred Down to manage the casino, but Down did what he (Down) wanted and had brought in George Chinn to be the pit boss, despite Chon having urged him not to. Chon also admitted he, himself:

• Lacked access to the safe as Down had the combination
• Didn’t know how much the house’s bankroll contained from day to day
• Didn’t have any say over hiring or firing employees

The NGCB cited Chon on five counts:

• Transferring interest to an unlicensed person
• Permitting concealed interests in the club
• Misrepresenting on his license application the casino’s financial structure
• Improperly maintaining the bankroll
• Unsatisfactorily conducting business

The board ordered Chon to explain in person why he should be allowed to keep his license. In the interim, he voluntarily shuttered the Old Cathay casino, on March 15, to remove some of the people associated with it, he said.

Testimony Given

At the hearing, Chon relayed a different story, perhaps because Fong, Down and Chinn also were there. He denied telling anyone he lacked control over his club and the workers and that Down wouldn’t do what he said. Chon claimed it was his choice to not have the safe combination because he tended to spend money when he consumed too much alcohol.

However, he did concede to having expressed his concerns about Chinn to Down. (Chinn had had a run-in with the state some years prior when it was discovered he’d held a secret interest in the Yukon Club in Reno.) Chon said Down’s response had been that he and Chinn were friends but he’d take care of it later.

Chon explained he’d often traveled to and from San Francisco and spent three days a week there where he oversaw a grocery store.

Also, he vehemently denied that he’d allowed unlicensed parties to operate the casino, specifically Fong, Down and/or Chinn, or that he’d abandoned his gambling permit.

Fong and Chinn attested to not holding any interest in the Old Cathay Club.

The NGCB’s auditor testified that Chon had initially signed the casino checks but within a month of opening the doors, Down had assumed the task. He noted Chon had contributed $18,000 to the bankroll, but it hadn’t been recorded in the club’s accounting records.

It seems some bad characters had used Chon, without his knowledge, as a front man for the Old Cathay Club then took over.

The NGCB Rules

In May, pursuant to the testimony provided at the proceeding and their own findings, the board members determined that Chon:

• Hadn’t, willingly at least, allowed any transfer of interest in the casino, but they strongly doubted he truly controlled it
• Hadn’t allowed a concealed interest in the gambling house
• Hadn’t misrepresented information on his license application
• Had funded the bankroll via loans, but against the rules, the transactions hadn’t been recorded
• Had improperly maintained the bankroll and admitted he couldn’t control it
• Had conducted the business unacceptably

Consequently, the agents unanimously agreed Chon was unfit for a gambling license and, therefore, recommended it be revoked. In agreement, the tax commission pulled it.

Chinn Goes For It

With Chon out, Chinn, already on the NGCB’s radar as being shady, applied for a gambling permit in June to run the casino at the Old Cathay but under the name, California Club, noting he would invest $42,000 in it.

As expected, regulators denied the license because of “unsatisfactory past operation” (Nevada State Journal, June 27, 1957).

Chon, Take Two

Fast forward six years. Chon, who had his gambling license taken away, applied to have it reinstated. That time it was for Basin Street, a casino at 246 N. Lake Street, also in Reno. NGCB agents decided to give him another chance, as his prior infractions hadn’t been egregious and he’d closed his casino voluntarily before any state action. They voted 2 to 1 to give him one on a six-month conditional basis.

Chon ran that gambling house for two and a half years.

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* The Old Cathay Club previously had been called Confucius and before that, the Lido Bar. It was located at 222 Lake Street in Reno (now a parking lot across from Greater Nevada Field).

Sources

1886

In fall 1886, Officer John L. Fonck confronted one of his superiors face to face. He charged Chief of Police J.W. Davis with “standing in with the gamblers,” in other words, allowing them to operate their illegal casinos unfettered (Los Angeles Times, Dec. 8, 1886). California had banned gaming 26 years earlier.

In response, Davis suspended him for insubordination. When Fonck subsequently asked the police commissioners to reinstate him, they fired him instead.

The unemployed officer then took his allegations against Davis to the Los Angeles Times, which published them.

Chief Publicly Outed

Consequently, the Los Angeles City Council members held a special meeting to investigate. During this proceeding in which attorneys were disallowed, Fonck presented a case, gave a statement and questioned witnesses.

He depicted a scenario in which Davis:

• Accepted protection money from local, Chinese gamblers
• Tipped off those individuals about upcoming raids
• Obstructed, in other ways, officers’ efforts to close gambling dens

Soon after Davis took office, in December 1885, Captain of Police C.A. Ketlar told Fonck that he (Ketlar) and Chief Davis “let them play and pay,” referring to the Chinese gamblers, and that everyone could benefit from the arrangement. The next day, Davis informed Fonck he only objected to non-Chinese people playing games of chance. Other times, various gambling club owners scoffed at Fonck’s power because the chief was “with them” (Los Angeles Herald, Nov, 14, 1886).

Fonck detailed several other situations and circumstances to prove that Davis knew gambling was happening and where. For instance, one of the chief’s rules was that no officer could raid any casino without his prior consent.

The Blue Wall Vanishes

Testimony against Fonck included:

• Ketlar charging the officer had tried to corrupt Ketlar and the chief
• A former chief saying he’d suspended him in the past for unruliness
• A second ex-chief admitting he didn’t like him as an officer

Davis , when questioned, denied all accusations and often answered he didn’t recall specific conversations and instances between him and Fonck.

“These witnesses made a sorry failure of their attempt to break down Fonck’s character. It was a noticeable feature throughout the investigation that not one of the witnesses against him could look, or tried to look, the honest old Dutchman in the eye,” reported the Los Angeles Times (Dec. 8, 1886).

The Smoking Affidavit

In early December, the Times published a statement it had held for three weeks, until after the city election. In it, fellow police officer Herbert Benedict swore to interactions with Davis that depicted his true character. Benedict came forward, not because he and Fonck were close but because he viewed him as a solid officer and believed Fonck’s job loss and Davis’ vindication had been unjust.

Benedict explained Davis had used him as a middleman to communicate with Fonck. Davis had instructed Benedict to tell Fonck that Davis would reimburse all of his lost salary since his firing if Fonck would drop the charges against him. When Fonck had refused, Davis had had Benedict try again, that time offering $100 and the promise of $200 more if Fonck would “make the evidence as light as possible” (Los Angeles Times, Dec. 8, 1886).

When council members subsequently asked Davis about the $300 bribe, he tried to explain it away by telling a convoluted story involving former chiefs and their wrongdoings.

Weak, Not Depraved

The next day, Davis resigned.

“My reasons are that I am unjustly accused or blamed for an act of mine which was done without any willful or malicious motive, and solely to benefit another person; but circumstances are such that I am without witnesses to demonstrate the truth of my assertion, and I therefore prefer to resign at, once, though perfectly conscious in my own mind, that I am innocent of any wrong, illegal or improper act, were the whole facts known,” he said (Los Angeles Herald, Dec. 9, 1886).

Subsequently, no one pursued holding him accountable for his alleged misconduct.

“Chief Davis’ troubles have arisen, it is believed, rather from weakness than from innate depravity, and there was no disposition to hound him down,” noted the Los Angeles Times (Dec. 9, 1886).

The council chose Ketlar to step in as chief until it voted in someone new.

As for Fonck, as opined in the same article, “The events of yesterday, however, vindicated his position, and palpable justice demands that he be reinstated, with pay for the time he has lost. That is a proposition which admits of no argument.”

Sources

Photo from Wikimedia Commons

1976

Natalie Cole made her Nevada performance debut at the Las Vegas Hilton hotel-casino (formerly the International Hotel) on a double bill with Bill Cosby in April.

1931-1965

Nevada’s early gambling industry was “wrapped in a segregated White Curtain” (Reno Gazette-Journal, Feb. 27, 2008).

Between 1931, when Nevada legalized gambling, and 1965, African Americans were banned from gambling or even being present in the Silver State’s Caucasian-owned casinos, for fear their presence would scare away white patrons. Typically, any black person who entered a casino would be asked to leave. The only exception was African American men in military uniform, who, in rare cases, were allowed to stay and play.

These hospitality businesses, however, employed blacks as restroom attendants, maids, shoe shiners, cooks, janitors and porters. Owners required African American entertainers who performed on the premises to come and go via the rear or side doors and use the service elevators to not be seen.

In contrast, Asian- and African American-owned casinos permitted blacks entry and gambling privileges. For instance, blacks made up about 90 percent of guests at Bill H. Fong’s New China Club, in Reno. The Asian-American-owned Cosmo Club and the black-owned Harlem Club were two other integrated gambling places in Northern Nevada.

In Sin City

In Las Vegas, prior to the debut in 1955 of the first desegregated hotel-casino, the Moulin Rouge, African Americans weren’t thrown out of gambling clubs on The Strip but were made “to feel unwelcome,” wrote Wallace Turner in Gamblers’ Money. The Moulin Rouge was owned by one black man — boxing champion Joe Louis  —and two white men — Alexander Bisno and Louis Rubin. Although wildly successful at first, the enterprise only lasted a few months, closing and going bankrupt later in the same year.

Frank Sinatra, using his influence, advanced the idea that African Americans should and must be afforded equal rights. He forced the issue when he refused to perform at Las Vegas places where a mixed audience wasn’t allowed and when, on behalf of the Rat Pack, he wouldn’t accept gigs at venues that prohibited Sammy Davis, Jr. from staying in its hotel.

Five years later, NAACP president, Dr. James McMillan, and Nevada’s first black dentist, Charles West, asked to meet with civic leaders and, if refused, threatened a march down the Las Vegas Strip in protest of racial discrimination.

Subsequently, Nevada Governor Grant Sawyer, city officials, local law enforcement and hotel owners convened at the Moulin Rouge’s coffee shop to discuss blacks’ exclusion from the Strip. Out of that tète-a-tète came a pact — the Moulin Rouge Agreement — to end segregation immediately, but only at hotel-casinos on the Strip.

Full Inclusion

It would be another five years before African Americans could gamble freely in any Nevada casino. That came with the 1965 passage of a revised state Civil Rights Act. The amended law expanded anti-discrimination to specifically encompass casinos and bars.

Sources

Dealer training school for African Americans in Las Vegas, 1971

1957, 1962, 1968, 1974

Over the years, entities around the world fashioned casinos for various educational and training purposes. Here are four that were based in the U.S.:

1) Instruction For Novice Players

In 1957, the Royal Nevada in Las Vegas set up and housed a cash-less casino in its Beverly Hills, California reservations office. The purpose was to teach potential hotel-casino guests how to play craps, cards and roulette, which were offered at its Southern Nevada property, and ultimately garner business for its real gambling house. Since opening two years earlier, the Royal Nevada resort in Vegas had struggled financially amid great competition.

The faux casino operation was short-lived, however, because Police Chief Clinton H. Anderson soon learned of it.

“He descended on the place in high dudgeon and issued this ultimatum: ‘Get that stuff out of here or else,’” reported the Madera Tribune (April 24, 1957).

2) Historical Exhibit

Starting in 1962, when gambling was banned in Wisconsin, the State Historical Society in Madison featured the exhibit, “You Can’t Win,” in its Room 118.

It was a makeshift casino, with a dozen-plus slot machines, a roulette wheel, chuck-a-luck cage, faro layout, parlay tickets, punchboards, crooked dice and marked cards. The slots, for instance, had come from raids on illegal gambling, in 1948, when Wisconsin ranked second among the states for having the most machines operating.

Accompanying information included the games’ odds, reasons why “you can’t win” and historical facts. One tidbit was that crooked dice had been found as early as 400 B.C. Another was that gambling in the U.S. at the time was a $500 billion a year industry, 9 percent of which, or $45 billion, went to casino owners.

3) Dealer Training School

With U.S. government dollars, Reverend Leo A. Johnson, the deputy director of the Concentrated Employment Program (CEP) in Las Vegas, created a mock casino on the West Side to teach young, unemployed African American men how to deal craps, blackjack and keno, jobs that had been denied black people in the city until 1965. The federally mandated CEP aimed to focus various manpower programs and related services in areas with the highest unemployment rates. Howard Hughes’ Landmark Hotel and Casino donated the gaming tables for this school that launched in 1968.

Students worked for nine weeks in the faux gambling room, posing as both dealers and customers, to develop the necessary job skills and poise. They were paid $47 a week (about $322 today), the amount they would’ve received in unemployment benefits.

Instructors — former pit bosses, casino managers and dealers — watched and advised the pupils as games unfolded, earning $7 ($48) an hour doing so.

Despite a rocky start, the school became successful and, over its years in existence, graduated numerous people. It operated for at least three years, perhaps more.

4) Law Enforcement Training Tool

In 1974, in one of its Virginia buildings, the Federal Bureau of Investigation (FBI) established a casino, complete with slot machines, a roulette wheel, blackjack table, craps table — “our version of Reno,” described Charlie J. Parsons, an agent who specialized in gambling and organized crime investigations (Reno Evening Gazette, Nov. 28, 1974).

All of the equipment, some of it rigged, had been confiscated from actual gaming operations and turned over to the federal law enforcement agency by the courts.

The faux casino’s purpose was to teach FBI agents all about gambling.

Sources

Photo from Ebony, December 1971