One Carlin, Nevada business owner learned the hard way that the state didn’t tolerate gambling operators cheating the players. 

Gino Quilici just had been granted a gambling license in August 1952 for the State Inn, in the small city about 270 miles northeast of Reno. Only three months later, the Nevada Gaming Control Board (NGCB)* found on the premises two illegal, “plugged,” three-reel, mechanical slot machines.

A $1 machine, sitting in the bar area, contained a percentage changer, or “jumper,” on the center reel, which prevented the three reels from showing a jackpot. A $0.50 machine in the café had a jumper on the right reel, preventing a jackpot and three other payoffs.

Quilici, who’d emigrated from Italy to the U.S. at age 15 in 1914, had owned the State Inn as well as the State Hotel, also in Carlin, since 1947. He’d held a gambling license for the hotel since 1950. His criminal record contained one conviction, for violating Prohibition in 1925 and for which he’d served 30 days in jail.

Made To Answer

At the hearing before the Nevada Tax Commission concerning the rigged slot machines in February 1953, Quilici testified that he’d bought the ones in question from someone in another state and hadn’t known they’d been tampered with.

The tax commissioners suspended Quilici’s gambling license for the State Inn for 15 days. This meant that for that period he had to turn around and keep his slot machines facing the wall. Presumably, Quilici complied. He was warned that next time the penalty would be more serious.

Events at that meeting set a precedent for how Nevada’s gambling regulators would, from that point on, deal with rigged slot machines cases. They’d impose a short suspension for first and minor offenses and longer suspensions or license revocation for second or large offenses. Previously, the agency had turned over the matter to local law authorities. In those instances, the cases oftentimes were dropped because prosecutors couldn’t prove the operators knew their slots were cheating customers.

Lesson Not Learned

Quilici tested the commission’s new policy six years later when NGCB agents again discovered a problematic slot at the licensee’s State Inn in April 1958. This time it was a $0.25 machine with a plug on the center reel, which kept a certain symbol from showing.

In this second incident, Quilici didn’t get off so easily; he was arrested. The machine was confiscated for possible use as evidence in court, if the case wound up there.

In fact, it did. Quilici stood trial in October. Again, he claimed ignorance. In less than 30 minutes, the jury found him guilty of allowing operation of a plugged slot at the State Inn. The judge fined him $1,000 (about $9,000 today).

The next month he had to answer to gambling regulators for this violation of the state gambling law. During that proceeding, Quilici resorted to the same defense. The tax commissioners revoked his gambling license for both the State Inn and State Hotel.

Tough, Economic Consequences

A gambling license revocation wasn’t for life in many cases, so a once-licensee could reapply for another one. Quilici requested a new license about seven months later, for eight slot machines at the State Inn and another eight slots at the State Hotel. The tax commission refused to grant him one due to his conviction on a gambling charge.

A month later, Quilici applied for a license for table games at the Star Hotel and Bar in Winnemucca, another of his properties.

“The application was deferred because the present operation did not indicate that he could handle another one,” it was recorded in the August 1959 NGCB meeting minutes.

In yet another effort, Quilici applied for the 16 slots total for his café and hotel, and in December, he, with his attorney, argued his case before the NGCB. Quilici stated he’d studied up on slot machines and now knew enough to determine whether or not they’ve been doctored.

“I won’t trust anybody but myself,” he said (Reno Evening Gazette, Dec. 2, 1959).

The board indicated it needed additional time to research and consider his case and, thus, deferred action on the repeat offender’s application.

Subsequently, in January 1960, on the NGCB’s advice, the tax commission refused Quilici a new gambling license on the basis of his previous license suspension and revocation.

A Different Tack

In July, instead of Quilici, Elijah I. Puett, owner of Puett Appliance Co. and a lifelong Carlin resident, applied for a gambling license for eight slot machines at the State Inn. The two businessmen had come to an arrangement wherein, in part, Puett would lease the machines from Quilici for $12.50 ($110) apiece each month, and Quilici’s employees would service them. It’s probable that Quilici also was to get a percentage of the earnings from the slots.

The commissioners denied Puett’s application with no prejudice to him, a man the NGCB agents found to be “of good character” (Meeting Minutes, January 1960), and cited Regulation 3.020, Section 1, as the reason.

That rule read, “The commission or the board may deem that premises are unsuitable for the conduct of gaming operations by reason of ownership of any interest whatsoever in such premises by a person who is unqualified or disqualified to hold a gaming license, regardless of the qualifications of the person who seeks or holds a license to operate gaming in or upon such premises.“

When it came to getting a new gambling license, like the people who’d played his plugged slots, Quilici wouldn’t hit a jackpot.

———————–

* Formed in 1955, the Nevada Gaming Control Board served as the investigative team for the Nevada Tax Commission, which originally handled gambling licenses. In 1959, when the Nevada Gaming Commission was formed, it took over that responsibility from the tax commission.

Sources

1988-1989

Tipped off by the contents of various lawsuits and complaints by employees, Nevada Gaming Control Board (NGCB) agents raided the Imperial Palace Hotel and Casino* on September 27, 1988. The 2,700-room property located on the Las Vegas Strip was owned by Ralph Engelstad, then age 58.

Shocking Cache Revealed

Inside the resort with the Asian motif, gaming investigators discovered a private space containing a multimillion-dollar horde of Nazi memorabilia. The room was 3,000 square feet in size, or about nine times the size of the average U.S. hotel room. The myriad of items in this “War Room” included:

• Murals depicting Adolph Hitler and Nazi staff members
• Daggers and swastikas
• A painting of Engelstad donning a Nazi uniform
• A life-sized portrait of Hitler signed, “To Ralphie from Adolph, 1939”

Engelstad’s classic car assortment housed elsewhere on the Imperial’s premises contained Hitler’s 1939 Großer Mercedes parade car, a six-wheeled Nazi-used car and a Heinrich Himmler-owned Mercedes-Benz.

NGCB members investigated further to determine whether or not to recommend the Nevada Gaming Commission (NGC) revoke Engelstad’s gambling license.

The agents interviewed numerous current and past employees and reviewed legal documents. They revealed that the work environment at the Imperial was one, allegedly, where discrimination against Jews took place in the form of Engelstad making anti-Semitic comments and calling people pejoratives.

Workers revealed that Engelstad had thrown two parties, one in 1986 and a second in 1988, to celebrate Hitler’s birthday (April 20). Some staff members reported having felt pressured to attend the fêtes held in the War Room, which featured a large swastika cake bearing Hitler’s name, German food and marching music, and bartenders wearing T-shirts that read, “Adolph Hitler European Tour 1939-45.” One employee of Jewish heritage recalled Engelstad allegedly egging him on to cut the cake.

The NGCB also was alerted to the existence of bumper stickers at the Imperial, bearing the words, “Hitler Was Right.” When agents searched for them in the hotel-casino on October 6, instead of locating the decals, they found a printing plate for manufacturing them along with a 1986 order for the same.

Owner’s Explanation

Two days later, Engelstad apologized publicly for having the collection, which was in “poor taste,” he said, and for throwing the “stupid and insensitive” parties (Las Vegas Strip History). He denounced Hitler, denied being a Nazi sympathizer and refuted being behind the making of the T-shirts and bumper stickers.

Various subsequent media reports noted Engelstad or his attorneys had given, at different times, these justifications for the parties:

• They were just theme parties to boost employee morale
• They were to honor the employees who helped assemble the “War Room”

They were merely “spoofs” to celebrate new purchases for his historic ensemble (Salon, March 8, 2001)

Negative Sentiment Mounts

Various Las Vegas groups and individuals expressed their displeasure with Engelstad.

Specifically, a representative from the Jewish Federation of Las Vegas responded, saying Engelstad’s mea culpa was insufficient and declared a boycott of the Imperial Palace.

From the viewpoint of the gaming authorities, Engelstad, with his blatant, seeming salute to the Nazi Regime and its anti-Semitic and racist views, at least, had disgraced the State of Nevada by embarrassing its casino industry. And that warranted punishment.

“The charge was honoring and glorifying Hitler,” said Gerald Cunningham, NGCB member. “It was an improper act” (The New York Times, April 3, 1989).

The Penal Phase

At the conclusion of the five-month inquiry, in February 1989, the NGC ordered Engelstad to pay $1.5 million (about $3 million today) — the second largest fine the agency had imposed on a casino operator as of that date** — and placed nine restrictions on his gambling license.

Nearly having been stripped of the same, the Imperial owner paid the full amount, removed the Nazi artifacts from the resort and vowed to refrain from holding further celebrations of Hitler.

Engelstad would go on to keep his gaming permit and own/operate the hotel-casino until his death in 2002.

————————–

* Before Ralph Engelstad debuted it as the Imperial Palace in 1979, the property had been the Flamingo Capri (3535 S. Las Vegas Boulevard). He’d purchased the dilapidated Flamingo Capri in 1971, spruced it up, added a casino and some buildings, and reopened it the following year. Today, a renovated version, the Linq hotel-casino and shopping promenade, stands in its place.

** The largest pre-1988 fine was $3 million levied in 1984 against the Stardust hotel-casino owners for skimming.

Sources