1951

Gambling is the lifeblood of organized crime.

This was U.S. Senator Estes Kefauver’s conclusion after the Special Committee on Organized Crime in Interstate Commerce, which he headed, concluded its investigation.

The Kefauver Committee’s work, in part, involved conducting hearings in 14 U.S. cities, during which they grilled (sometimes, unsuccessfully) about 600 witnesses, including big-time Mobsters, some of their associates and officials knowledgeable about Mob activity. The 15-month query shone a spotlight on gambling taking place at the time and for years before, most of it illegal, prohibited by law in most states.

The hearings were televised, and Americans tuned in, rapt. The broadcasts opened their eyes to the who, what,  where, when and how of gambling and other organized crime happening all around them. By March 1951, 72 percent of U.S. residents were familiar with the Kefauver committee and what it was doing.

Crackdown On Some Gamblers

As a result of the Senate committee’s findings, Kefauver recommended the federal government impose a 10 percent tax on all gambling. At the same time, U.S. residents, facing a likely federal personal income tax increase, expressed dissatisfaction at gambling operators (gamblers) paying little or no taxes on the loads of cash they made.

These two factors in large part pressured Congress to act, and it did in 1951 but not to the extent Kefauver had suggested. It imposed two taxes* on a subset of gamblers, individuals who received bets from people — bookmakers, numbers writers, and punch board and lottery operators.

The goal was to force these people to pay heavy taxes or go out of business, and in doing so, shrink the  gambling industry nationwide and generate a good chunk of revenue for the U.S.

Trio Of Mandates

One of the new federal levies, called the tax on wagers, was 10 percent of all gross receipts.

The other was an occupational tax, often referred to as the gambling stamp tax. It required wager takers to buy a special tax stamp every year by December 1 and display it in their place of business or, for those without such a location, on their person. The stamp cost $50 (about $525 today).

Anyone required to pay the special tax also had to register with the local Internal Revenue Bureau (IRB) collector and provide their name, home and business addresses and the name and home address of their partners, employees and clients. Once the bureau received the information, it provided a copy to local law enforcement officials and maintained its own public list of all gambling stamp purchasers.

These wagering-related taxes went into effect on November 1, 1951.

Failure To Comply

The penalty for not purchasing the $50 tax stamp was a fine of at least $1,000 ($10,300 today) but not higher than $5,000 ($51,500 today).

Gamblers who had a stamp but didn’t display it were fined, $50 for those who’d forgotten to do so and $100 for those who outright refused to do so.

Providing false information on the relevant forms was punishable by up to $10,000 in fines and five years of imprisonment.

Regarding the 10 percent tax on wagers, IRB Commissioner John B. Dunlap told the United Press that “cases of willful evasion or attempt to defeat the tax will be promptly referred to the department of justice with recommendation for criminal prosecution” (Nevada State Journal, Dec. 5, 1951).

Early Stamp Numbers

By the first deadline, December 1, 1951, a total of 7,706 gamblers had applied for the federal gambling tax stamp. The state of Washington submitted the most applications, at 1,412. Next was Montana, with 902. Nevada, where gambling was legal and wide open, accounted for only 33 applications.

It wasn’t long before problems with these latest federal taxes arose.

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Look for Part II next week.

* Congress enacted the two taxes on wage takers through the Revenue Act of 1951, which also temporarily raised federal individual income and federal corporate taxes.

Sources

1944 stock certificate signed by Pat Mooney

1940-1953

In 1946, Pat Mooney, chief field deputy of the Nevada Internal Revenue (IR) Bureau office, made gambler-Mobster Elmer “Bones” F. Remmer* an offer he couldn’t refuse.

If the gambling club owner purchased $52,400 ($699,000 today) worth of shares in the Mountain City Consolidated Copper Co. (MCCCC) then his 1945 federal tax debt in that same amount would be erased and prosecution avoided. Mooney would prepare Remmer’s tax return to ensure that be the case.

The Bay Area-based racketeer accepted. Remmer paid $2,400 ($32,000 today) for 6,000 shares at $0.40 apiece.

Like him, hundreds of other California and Nevada and business people, including convicted abortionist Gertrude Jenkins of San Francisco, took a similar deal over the previous handful of years. Here are some of The Silver State gamblers who did so between July 1943 and May 1946 and what they paid:

These and all of the other people who bought MCCCC stock had tax problems that disappeared subsequently.

Mining Misrepresentations

Along with Mooney, the key perpetrators of the scam were Ernest M. Schino, chief field deputy for the tax bureau in Northern California, and Martin Hartmann, an ex-con turned MCCCCC sales agent. They told prospective shareholders that the corporation owned a reputable, producing copper mine sitting on valuable property that included 14 mining claims, a mill site and water rights. They touted the fact that the land adjoined that of the producing Rio Tinto copper mine in Nevada’s Elko County, owned by Anaconda subsidiary Mountain City Copper Co., a different entity from MCCCC. 

In reality, MCCCC didn’t have a working mine. The company had no value, and, thus, the stock was worthless. The property was nothing more than “a rathole in Nevada,” Frank Dwyer of the San Francisco Stock Exchange told the San Francisco Examiner (Aug. 29, 1950).

Mooney founded and incorporated MCCCC in 1937, allegedly spent $137,000 on some work there, including a geophysical survey of the land and some underground work in 1944, but that was all. By 1950, MCCCC had about 600 shareholders, a major one being Robert L. Douglass, an IR collector in Nevada.

Compounding The Crime

As promised, Mooney calculated and filled out Remmer’s tax returns not just for 1945 but for all of the five years between 1942 and 1947, a violation of IR regulations. Specifically, the bureau’s employees were prohibited from doing any work that could affect a person’s tax liability and/or from moonlighting in any capacity in which their personal and professional interests would conflict.

Scandal Sees Sunlight

In early 1950, the San Francisco Examiner exposed the IR scheme and the workers involved. Subsequently, William A. Burkett testified before Senator Estes Kefauver’s United States Senate Special Committee to Investigate Crime in Interstate Commerce in San Francisco in November 1950, telling them what he knew about it.  He previously quit his position as the IR intelligence chief for Northern California after his department ignored his reports on the MCCCC stock extortion in what he alleged was a coverup.

“The Internal Revenue office hearing [before the Kefauver Committee] showed … that established law enforcement and investigative officers were in many cases the exploiters rather than the exploited in their relationships with the underworld,” William Howard Moore wrote in The Kefauver Committee and the Politics of Crime, 1950-1952.

Probe, Legal Action Ensue

After an investigation by East Coast U.S. Treasury agents into related tax cases going back to 1940, the federal government pursued a lawsuit against Mooney, Schino and Hartmann for a single extortion case, the one involving Jenkins, the abortionist, who purchased $5,000 worth of MCCCC shares. By this time, Mooney was 81 and retired, Schino was 55 and fired. Hartmann was 63.

A federal grand jury indicted the trio for attempting to defraud the U.S. government by attempting to obstruct the IR bureau’s prosecution of Jenkins for income tax evasion.

Ralph Read, head of the IR bureau’s intelligence unit in San Francisco, said that his team, after investigating the Jenkins case years earlier, concluded “there was nothing involving any Internal Revenue personnel” and “there was nothing in the nature of solicitation of a bribe or any act to influence an Internal Revenue officer” (San Francisco Examiner, Aug. 30, 1950).

In early 1952, federal prosecutors tried Mooney, Schino and Hartmann together. A jury found all three guilty.

Schino and Hartmann appealed the ruling, but in December 1953, the Ninth U S. Circuit Court of Appeals upheld it. Schino’s sentence was two years in prison, Hartmann’s was two years in prison plus a $5,000 ($49,000 today) fine. Mooney got two years’ probation and a $5,000 fine.

As for gambler-Mobster Remmer, he later was convicted of federal tax evasion and sentenced to a $20,000 ($194,000 today) fine and five years prison, of which he served 2.5.

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* Remmer’s gambling houses included the Cal-Neva Lodge at Lake Tahoe in Crystal Bay, Nevada; and in California, the Menlo Club, 110 Eddy and B&R Smokeshop in San Francisco; the 21 in El Cerrito; and the Oaks Club in Emeryville.

Sources

Bones Remmer

An unpleasant, self-described “big gun,” Elmer “Bones” F. Remmer was “once one of the San Francisco Bay Area’s flashiest and most successful gambling czars,” having owned numerous clubs in which he offered illegal games of chance, noted the Oakland Tribune (June 12, 1963). Before solely working in Northern California, Remmer worked in Northern Nevada for the Wingfield syndicate, the local Mobsters who then controlled gambling there.

He likely is most associated with his Menlo Club in San Francisco, which he operated during the 1940s, and the Cal-Neva Lodge at Lake Tahoe in Crystal Bay, Nevada, which he ran in the 1930s in association with the Wingfield Syndicate. He also owned, during the 1940s, the 21 Club in El Cerrito, the Oaks Club in Emeryville, and the 110 Eddy and B&R Smokeshop in San Francisco — all in California.

Here are 10 true tidbits about Remmer:

1) He was shafted by “It Girl,” actress Clara Bow in September 1930, when she stopped payment on three checks totaling $13,900 (about $198,000 today), which were meant to cover the gambling debt she’d racked up at the Cal-Neva Lodge. (This was even after he’d gifted her with a bottle of whiskey when she’d arrived at the property.)

2) His wife divorced him the following month on grounds of physical and other cruelty. She claimed she’d given Remmer $15,000 ($220,000 today) to buy into the Cal-Neva Lodge and quoted him as telling her, “I got so much publicity out of Clara Bow’s bum checks that now I know everyone and am hobnobbing with the elite. You’re no help to me now — just a detriment.” In the divorce settlement, Remmer had to pay her $15,000 ($270,000 today) in cash and $150 ($2,700 today) per month as alimony.

3) Remmer freely paid off state and local politicians to ignore his illegal gambling operations in the Golden State’s Bay Area. For one, he donated $170,000 ($1.9 million today) in campaign contributions to California Attorney General Frederick “Fred” N. Howser.

4) He was arrested and charged with intoxication, along with three others, following a drunken fight in the Encore bar-restaurant in West Hollywood one early morning in December 1950. The other brawlers were Edmund M. Scribner, a Bakersfield gambler who’d worked for Remmer before; Thomas J. Whalen, St. Louis gambler, and his companion, actress Vici Raaf.

5) While in police custody following the melee, he was served by federal agents with a subpoena, which he’d been dodging, to testify at the upcoming Kefauver Committee hearing. During the hearing in 1951, Remmer couldn’t be found, as he allegedly was waiting it out in Mexico, and never testified. One that threat was gone, he returned to Northern California.

6) Remmer went to trial twice, in 1948 and 1949, in San Francisco for operating illegal gambling houses and using business fronts to do so. Both cases ended in hung juries.

7) Jury tampering was alleged during Remmer’s first tax evasion trial in 1951-1952. An outsider, who claimed to know Remmer, approached and suggested to one of the jurors he make a deal with Remmer, insinuating Remmer would pay for a vote in his favor. The juror refused and notified the judge. The United States Federal Bureau of Investigation investigated but concluded nothing untoward had occurred. Ultimately, on appeal, the conviction of Remmer stood, and no charges against the reported interloper were pursued.

8) He was found guilty of federal tax evasion in 1952, but the appeals court ordered a retrial because of the alleged jury tampering. Tried again in 1958, he was found guilty a second time, and the higher court upheld the decision. He was sentenced to a $20,000 fine (about $185,000 today) and five years in prison. He served 2.5 of those, at the Federal Correctional Institution, Terminal Island in San Pedro, California, getting paroled in 1961.

9) He had money problems later in life. Before prison, Remmer paid the requisite pieces of casino income to various mob bigwigs, including Benjamin “Bugsy” Siegel, New York mobster; Johnny Rosselli, member of the Chicago Outfit; and Jimmy Lanza, head of the San Francisco crime family. Remmer also freely gave money to various local and state politicians. After paying the Internal Revenue Service his tax arrears of $63,000 (about $530,000 today), finances were tight. After prison, he sold cars, until his death four years later, for his brother William Remmer, who co-owned a lot in Oakland, California.

10) Nicknamed “Bones” as a joke because of his fluctuating, 225- to 300-pound size, he is said to have struggled, all of his adult life at least, with an endocrine disorder. Remmer passed away after “undergoing treatment following surgery for a glandular ailment” at age 65 in 1963 (San Mateo Times, June 12, 1963).

Sources

El Rancho in Las Vegas, Nevada in the 1950s

1951-1952

Gambling boomed in Las Vegas, Nevada immediately following Senator Estes Kefauver and his committee’s nationwide investigation into organized crime.

The 27 hearings the group conducted in 14 United States cities in 1950 and 1951 (Las Vegas was in November 1950) “turned a bright, hot light on illegal gambling in other parts of the country,” reported the Reno Evening Gazette (May 31, 1951).

“With illegal gambling considerably reduced in Miami, Chicago, Cleveland and the other big cities, the big spenders out to make a fast buck on the wheel or crap table are flocking to Las Vegas,” the newspaper added. “Weekend reservations at the flossier* hotels like the Last Frontier, Flamingo, Desert Inn, Thunderbird and El Rancho are getting scarce for next winter. Motels and private rooms are jammed all the time.”

In fact, in 1951, Nevada yielded the highest ever gambling tax revenue to that point, of $1.5 million ($13.7 million today). That meant gamblers cumulatively bet about $1 billion ($9.2 billion) in the state over the 12-month period.

Spin On The Story?

Just as the industry was flourishing, a potentially detrimental news story came out. It noted some of 30,000 crooked gambling devices – loaded dice, marked cards and wired roulette wheels – discovered in a Phoenix, Arizona warehouse were destined for Nevada. Specifically, packets of illegal dice bore the monogram of various Las Vegas and Reno clubs, according to Sheriff Cal E. Boies, who’d stumbled upon the cache.

Strangely, though, soon after his initial report, Boies backtracked and said the equipment wasn’t slated for Nevada, only New Mexico and other parts of Arizona.

“However, it was learned that a reliable Phoenix source had actually seen the crooked dice monogrammed with the names of certain Las Vegas clubs,” reported the Reno Evening Gazette (Dec. 30, 1951).

The members of the Nevada Tax Commission, which regulated gambling then, scrambled to quell the evolving public relations nightmare for fear rumors of crooked casinos in the state would keep away people wanting to play games of chance. The regulatory agency immediately sent one of its investigators, Ray Warren, to Phoenix to determine if in fact Silver State gaming clubs were involved.

Warren quickly reported he hadn’t found any evidence to indicate any of the gambling devices were to be going to Nevada. He added the crooked dice in question were not loaded and merely were displayed souvenirs of the manufacturing shop owner, which he’d purchased 10 years prior when he’d lived in Reno and Las Vegas.

The same day, tax commission secretary, Robbins Cahill, emphatically denied on the record that any crooked gambling equipment had been sent to or intended for any Nevada casinos.

“He added that no major casino in Nevada has ever been caught using loaded dice and that, on the contrary, the clubs’ biggest problem in that respect was to prevent players from trying to exchange crooked dice for the carefully inspected and closely watched dice used by the casinos,” noted the Nevada State Journal, Jan. 1, 1952).

*Flossier: superficially stylish, slick

Photo from the University of Nevada, Las Vegas University Libraries’ Digital Collection: “Dreaming the Skyline: Resort Architecture and the New Urban Space”

Sources

1950s

The manufacture of slot machines, roulette wheels and other gambling equipment was big business in the United States until the mid-20th century when new federal legislation curbed it.

In 1950, the Kefauver Committee, officially the U.S. Senate Special Committee to Investigate Organized Crime in Interstate Commerce, began delving into the underworld’s involvement with gambling. The group’s findings and recommendations led to Congress passing the Transportation of Gambling Devices Act, a 1951 amendment to the Johnson Act. The law:

• Banned the transport of these devices to states where gambling was illegal

• Required manufacturers/distributors of gaming equipment for interstate commerce to register annually with the federal Department of Justice

• Mandated such paraphernalia crossing state lines be marked appropriately for shipment

The act, however, allowed interstate shipment into any state that passed a subsequent law exempting it from the federal provisions. Nevada did just that. Texas, though, on the other end of the spectrum, forbade gambling device making altogether. It was the only state to do so at the time.

Serious About Enforcement

The FBI cracked down on companies violating this act, and with the help of local police, conducted raids, seized equipment and pressed charges. A judge sentenced a Mississippi man found guilty of transporting six slot machines out of state to one year and one day in a federal penitentiary, a light sentence, he said, in that the offense occurred soon after the legislation banning it had been passed.

This law enforcement pressure caused many manufacturers to close shop and others, such as B.C. Wills & Co., to move to Nevada. Then one of the country’s two major roulette makers, it relocated from Michigan to Reno in 1954.

Sources

Bill Pechart, left, and Dave Kessel

1950-1953

During the 1950 federal hearings on organized crime, two Northern California gamblers — Walter “Big Bill” Melburn Pechart and David “Dave” Nathan Kessel — were uncooperative, according to the questioners.

They were Senators Estes Kefauver (D-Tenn.), Charles Tobey (R-N.H.) and Alexander Wiley (R-Wisc.), congressmen who comprised the Kefauver Committee, or the United States Senate Special Committee to Investigate Crime in Interstate Commerce. During its two-year probe, the group conducted inquiries in 14 major cities across the nation, during which more than 600 individuals testified.

In San Francisco, the committee subpoenaed Bill Pechart and Dave Kessel to testify because they were “big wheels” in illegal gambling along with bookmaking and slot machine enterprises in Contra Costa County, or the East Bay, as described in California Crime Commission reports.

During the 1930s and 1940s the partners owned and operated numerous illegal gambling clubs — including The Wagon Wheel, the 21, the Rancho San Pablo and the Hollywood — in the then-unincorporated area between El Cerrito and Richmond dubbed “No Man’s Land.” They also were former associates of Elmer “Bones” F. Remmer, co-owning at least one gambling house and allegedly bribing politicians to let them operate outside the law.

During those decades, California prohibited all types of gambling except draw poker (legalized in 1911) and horse racing (legalized in 1933).

One-Sided Sessions

At the start of questioning, Kessel, 56, read a statement indicating he wouldn’t answer questions because of potential self-incrimination. He claimed he’d written the verbiage but when asked the meaning of some of the included legal terms, he admitted his lawyer had penned it. Thus, the committee charged him with perjury. Subsequently, he answered nary a question, including whether or not he knew Pechart.

Kefauver described Kessel as “one of the most sinister characters” the committee had interviewed (Oakland Tribune, Nov. 22, 1950). “Very substantial charges as to his operations in Contra Costa County have been made by citizens of that area. He appears from these charges to be a nuisance and a very bad influence.”

Pechart, 57, responded to some queries but invoked his Fifth Amendment right on others, particularly those about the duo’s businesses, income and taxes.

Consequently, the committee cited both men for contempt of Congress, which the Senate subsequently officially affirmed. Kessel was indicted for refusing to answer 32 questions, Pechart for 38.

If convicted, each gambler faced a maximum of one year in prison plus a $1,000 fine for each question they refused to answer: $32,000 for Kessel, $38,000 for Pechart (about $328,000 and $389,000 today, respectively).

Ruling On Contempt

After having pleaded innocent in 1951, the two gamblers went to trial in January 1952.

They were acquitted.

“Taking the whole record and the setting and circumstances in which the questions were asked, there was a right to claim the privilege,” said Federal Judge Louis E. Goodman. Yes, Pechart and Kessel were engaged in illegal gambling and racketeering, but no one can be forced into being a witness against himself.

Goodman also found Senator Tobey to be hostile at times during questioning, which could’ve  contributed to Pechart and Kessel fearing possible prosecution based on any information they might’ve provided.

In one instance, Tobey had asked: “Why in hell didn’t you come clean? When we get through with you, you will wish you had” (Oakland Tribune, Jan. 31, 1952). Another time, the senator had said, “You realize the penalty of breaking faith with this committee. It means a prison sentence.”

“There can’t be the faintest doubt that there was a reality of danger,” Goodman said about the hearing atmosphere, which lacked “impartiality” (Reno Evening Gazette, Jan. 30, 1952).

Kefauver, however, stated there was “no possible excuse” for the gamblers, “two of the most contemptuous witnesses who appeared before our committee,” not having answered questions (Oakland Tribune, Jan. 31, 1952). “It is a great disappointment and very discouraging that they were acquitted of the contempt charge.”

How About Nevada?

Six months after winning their contempt case, Pechart and Kessel tried to enter gaming in Reno, when they applied for a gambling license to run the Palace Club. They claimed to have given up all of their Northern California clubs in 1950. The Nevada Tax Commission, which then granted such permits, denied the men one due to their criminal background.

Sources

Pat McCarran, U.S. Senator for Nevada, 1947

1933-1954

His unfavorable personal opinion about gambling notwithstanding, Patrick “Pat” A. McCarran (D-Nev.) — U.S. Senator between 1933 and 1954 — acted repeatedly on the industry’s behalf. Had he not, it’s likely gaming wouldn’t have emerged as The Silver State’s greatest revenue-producing economic sector — a positive or negative, depending on one’s view.

Because gambling had become vital to Nevada — or “woven … in its various forms into the warp and woof of the state’s economic structure,” in the words of McCarran — he believed he had no choice but to do what he could to keep it thriving. But he felt like a “whore,” he said, defending gamblers (casino owners and operators), whom he considered “tinhorns.”

“In the climactic decision of his long and turbulent career, [McCarran] characteristically chose to justify and defend his beloved Nevada rather than take it into one more battle with poverty and want,” wrote the authors of The Money and The Power.

Inside His Bag Of Tricks

Here are 7 of McCarran’s pro-gambling efforts:

1) He intervened to get underworld denizens gambling licenses.

When Moe Dalitz, Cleveland mobster, applied for a gambling permit for the Desert Inn casino in Las Vegas in 1949, the Nevada Tax Commission said no based on his criminal background — bootlegging and illegal gambling. McCarran discussed the matter in person with one of his powerful friends, Salvatore “Sam” Maceo, Texas organized crime boss who previously had partnered with Dalitz in illegal liquor distribution.

After the McCarran-Maceo tète-a tète and supposed intervention by Maceo subsequently, state gambling regulators granted Dalitz a license.

2) He helped gamblers surpass other obstacles.

When mobster Benjamin “Bugsy” Siegel and the Nevada Projects Corporation, the cadre of mobsters financing the new hotel-casino, were having the Flamingo constructed in Las Vegas immediately following World War II, in 1946, construction materials were in shortage. As such, the Nevada office of the federal Civilian Production Administration allocated scarce materials on a project priority basis.

McCarran jumped the Flamingo to the top of the list so it could, and it did, receive construction materials without delay.

3) He got the scope of the Kefauver inquiry broadened.

In 1950, when Senator Estes Kefauver (D-Tenn.) pursued launching a congressional investigation into gambling nationwide, McCarran got the target expanded to encompass all types of organized crime — prostitution, narcotics, loan sharking, murder, extortion and labor racketeering — to lessen the resulting consequences to Nevada’s gambling.

The probing body became the United States Senate Special Committee to Investigate Crime in Interstate Commerce, or in short, the Kefauver Committee.

4) He delayed Congress’ approving the Kefauver inquiry.

Among his efforts there, he begged for additional time for the Judiciary Committee, which he headed, to consider the proposal, raised potentially related legal issues and suggested the matter be sent to the Senate Commerce Committee for its review as well.

Kefauver, however, received a green light, and his team conducted hearings in 14 major U.S. cities during 1950 and 1951.

5) He fought Congress’ agreement to levy contempt citations against Kefauver witnesses in general.

When subpoenaed to testify during the hearings, numerous gamblers either failed to appear or when they did appear, they refused to answer questions. Kefauver wanted them slapped with a congressional contempt charge* for obstructing the investigation. McCarran fervently argued against the idea but lost that battle. Once Congress approved one contempt charge, a slew followed.

6) He got contempt charges against multiple gamblers quashed individually.

7) He helped thwart passage of a bill to tax all gamblers.

Growing out of the Kefauver Committee’s findings, the House Ways and Means Committee, in May 1951, voted to impose a “10 percent gross receipts tax on bookies, numbers rackets operators and others who operate gambling pools” (Nevada State Journal, May 17, 1951). Kefauver urged that the tax bill from the House must be amended to incorporate all forms of gambling.

McCarran called on some Nevada gamblers to lobby against the bill while he fought it at the Senate Finance Committee level. He pleaded his case, that the “cumulative result would spell tragedy for the State of Nevada” and gambling, as a major economic component, needed protecting.

What eventually passed were a 10 percent tax on all wagers concerning sporting events or lotteries and a $50 annual occupational stamp excise for bookmakers and lottery operators. These mandates comprised a small portion of the much larger Revenue Act of 1951.

For these and his other interventions in support of gaming, McCarran was lauded by some and criticized by others.

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* Contempt of Congress is the criminal act of obstructing the work of the U.S. Congress or one of its committees, a misdemeanor punishable by a $100 to $1,000 fine or one-month to one-year imprisonment.

Sources

1953

On a weeknight in May, Louisiana state policemen surrounded a high-end home in the New Orleans suburbs. One of them knocked on a secret side door that contained a one-way glass window, allowing those inside to see out but not those outside to see in. A man in the house opened the door but slammed it shut once he realized who was there. Using sledgehammers, the troopers penetrated that and another door and entered.

Inside, they saw that much of the residence had been converted into an illegal casino. The living room, dining room and a third, smaller room all contained gambling equipment. A cocktail bar in the basement served guests.

Scattered throughout these areas were about 40 to 50 people, several of whom fled upon seeing the authorities. Three even jumped out of a window.

Operating Clandestinely

In the 1920s, parimutuel horse race betting became the only legalized form of gambling in Louisiana, although many casinos operated out in the open anyway, unlawfully, and this went on for decades. However, many of those enterprises went underground after Senator Estes Kefauver and his fellow committee members, in New Orleans in 1951, held hearings on organized crime. Following that probe, Jefferson Parish Sheriff Frank J. Clancy closed the area’s gambling houses.

One of those shuttered illegal clubs was O’Dwyer’s,* which had been owned and operated by brothers George L. and Rudolph “Rudy” T. O’Dwyer. Previously, the duo had run gambling establishments in New Orleans.

The home where the raid took place belonged to George’s son, Edward L. O’Dwyer.

Too Much Stress?

When she saw the police activity, Edward’s aunt and next-door neighbor telephoned her brother, George, and told him what was happening at his son’s home.

Immediately, George jumped in his car and sped to the scene. While pulling into his sister’s driveway, he suffered a heart attack and died on the spot!

Netting A Jackpot

Meanwhile, from the various gaming rooms in Edward’s home, troopers seized three roulette and three blackjack tables, $1,300 in cash (about $12,000 today) from various strongboxes and four loaded revolvers discovered in a cabinet.

“[It was] the most gambling equipment we’ve gotten on any raid,” Col. Francis Grevemberg said of the haul (The Monroe News-Star, May 27, 1953)

The state policemen released all the players but arrested the five operators, none of whom was an O’Dwyer, on illegal gambling charges. It’s unknown what happened to these men subsequently.

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* O’Dwyer’s, open from 1949 to 1951, was located at 100 Jefferson Highway, New Orleans. It’s now a Salvation Army store.

Sources

Estes Kefauver

1924

Senator Carey “Estes” Kefauver (D-Tenn.), the driving force behind rooting out illegal gambling and organized crime in the United States in the 1950s with his famous eponymous committee, decades earlier had taught math and coached football at the high school in a city where illegal gaming was allowed and rampant from the 1860s to the 1960s — Hot Springs, Arkansas.

Kefauver, who’d just graduated college, spent only a year in the gambling hotbed before moving and attending Yale Law School.

Photo from Wikimedia Commons

1951

Prior to the July grand opening of the new Greyhound Lines Inc. bus terminal at 224 S. Center Street in Reno, Pyramid Securities Inc. applied for a gambling license and permission to offer games of chance within the new Northern Nevada facility. The request specifically was for craps, 21 and roulette, one of each. The company’s executives were Carl Inskeep, Joe Caulk, Emmett Shea and H.M. Hicks.

The Nevada Tax Commissioners indicated they’d permit the small casino if the games of chance were walled off from the depot’s waiting room.

The decision was left to the Reno City Council.

A Body Divided

Councilman Bill Ligon opposed the gambling proposal. He disliked the idea of visitors arriving in Reno on the bus seeing gambling right away and wanted to prevent that. Surely having a gambling operation in a place “frequented by children and women” would lead to outside criticism of gambling and, possibly, negative consequences, such as federal legislation against it, he said (Nevada State Journal, June 26, 1951).

The industry, legal and illegal, already was in the spotlight due to Senator Carey “Estes” Kefauver and his eponymous committee openly investigating gambling and organized crime in the United States.

Councilman Roy Bankofier, who stood with Ligon, added that gambling is a privileged business, the growth of which the council must control. 

Councilman Tom Harvey favored granting the license. “Gambling is part of our economy,” he said. “Why single out this particular case at this particular time? Would you object to a grocery store going in there? That’s a business, too.”

“It’s a different type of business,” said Ligon. “Gambling is a very important part of our economy. Let’s protect it. Gambling is a business that must be restricted if we’re going to hang onto it.”

Councilman Marhsall Guisti said he couldn’t approve distinguishing between businesses but believed gambling should be contained in one part of Reno.

Attorney Richard Blakey, representing Pyramid Securities, reiterated to the agency that the gaming area in the bus station would be separated by wall from the waiting room and as such, gambling wouldn’t be forced upon anyone. Rather, they’d have to seek it out if they so desired.

Blakey added that slot machines, which are considered gaming devices, are allowed in other bus terminals in Reno. “Should there be distinction between kinds of gambling permitted?” he asked.

The Final Answer

The council vote was a 3-to-3 tie, which Mayor Francis R. Smith was left to break. He voted no, thereby officially denying Pyramid Securities its gambling request for the depot.

Not A Complete Kibosh

In a different, previous application, though, Pyramid Securities had asked the Reno City Council for permission to operate a bar and slot machines in that same new Greyhound depot.

After much discussion, the members allowed it but with conditions. The bar had to be separated from the waiting room and all window glass had to be painted or frosted so it couldn’t be seen through.

When Reno’s new Greyhound Lines station debuted in July 1951, inside was the Oak Room bar with its 27 slot machines open for business. Eight more working slots sat at the facility’s Lake Street entrance.

Other depot amenities included a cafeteria, soda fountain, newsstand and sizable lobby.

“The building is one of the largest and most modern of its kind in the Pacific area,” noted the Nevada State Journal (July 26, 1951).

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