Ernest J. Primm, casino mogul

1956-1959

A thief absconded with $2,000 (about $17,500 today) from the Club Primadonna casino in Reno, Nevada on the first Friday of May 1956.

The missing 10,000 dimes, 2,000 quarters and 1,000 half-dollars, the reserve fund for the club’s slot machines, were taken from a wooden cabinet in the basement. Only two employees had keys to that room.

One of them, Thomas Knaub, seven months later, sued the owner of that Reno, Nevada club, Ernest J. Primm, alleging he’d made false public statements that Knaub had been involved in the robbery. Knaub, no longer in his employ, claimed Primm’s alleged slander of him had prevented him from landing a job.

Therefore, he sought $75,000 in general damages, $25,000 in punitive damages and $2,135 for lost wages — a total of $120,000 ($834,000 today).

The jury trial began three years later in June 1959. The first witness called, Primm, denied ever accusing Knaub of participating in the theft or telling other casino owners Knaub had taken part in it.

“I have never been contacted by one single establishment about Mr. Knaub,” he said. “I have never contacted any establishment about him.” Primm said he didn’t know who took the money, “and I still don’t know” (Nevada State Journal, June 16, 1959).

He added, however, he knew Knaub gambled in the local casinos. “I know one thing. A man that goes around town gambling and puts I.O.U.’s in doesn’t deserve a job,” Primm added.

The former assistant office manager, Margaret Stanley, next testified that in Knaub’s job as a Primadonna club cashier, he counted the cash every morning, made bank deposits and co-signed payroll checks. She said once he’d found and pointed out a $1,000 error in the bank deposit.

When Knaub’s attorney was about to question Stanley about a conversation she’d overhead in the past between Primm and another employee, Marjorie Standlee, the defense objected on the grounds that such conversations are confidential. The judge agreed, and Stanley’s testimony—the crux of Knaub’s case, per his attorney — was cut short.

Two days later, the judge, A.J. Maestretti, dismissed the suit because the plaintiff had failed to present a sufficient case.

Sources

Photo from Wikimedia Commons: by Greg Primm

1947-1970

For some businesses, the Red Line was beneficial; for others, detrimental.

The Red Line designated a rectangular region of downtown Reno, Nevada in which casinos with unlimited gambling could exist. Clubs offering gambling outside the designated area were limited to 20 slot machines and three blackjack tables.

The city council officially created this district in 1947 via ordinance 791 as a way to control gambling. Once the industry had been legalized in 1931, new clubs had sprung up and existing illegal casinos had moved to operate in the light — all over downtown Reno. So many places had opened so quickly that business and property owners had feared land values would soar, making it no longer economically viable to run small non-gaming operations in the city core.

The name came from the red line that was used to indicate the boundaries on a map. Those were roughly Sierra Street on the west, Commercial Row on the north, Lake Street on the east and Second Street on the South. The governing body adjusted the zone slightly over the years due to pressure by various groups.

Tested In The Courts

The Red Line became one of Reno’s highly controversial and contested issues.

Over the decades, several individuals and groups protested the Red Line, some even demanding the city council repeal the ordinance. For example, Ernest J. Primm, owner of Club Primadonna, who wanted to expand his place beyond the Red Line, took the matter to the Nevada Supreme Court in the late 1940s. He argued the city council’s denial of his request was discriminatory and arbitrary. The higher court, however, also ruled against Primm.

In 1961, the city council expanded the zone but only for some. To encourage construction of fancy hotels, it exempted from the Red Line law those in downtown Reno with more than 100 rooms.

The issue again heated up in that decade. Critics argued the Red Line continued to hurt Reno in that a few major operations monopolized downtown, squeezing out potential smaller gambling businesses.

In mid-1969, the city council again denied a request to eradicate the Red Line. Soon after, owners of the Colony Casino, located just outside the Red Line, sued the city of Reno and its councilmen and manager, claiming the gambling boundary was unconstitutional and the city lacked the authority to pass such an ordinance.

But, like with Primm’s case, the judge ruled the ordinance was constitutional and a proper exercise of power.

Council Takes Action

In spring 1970, the city council passed an ordinance that eliminated the Red Line and, instead, replaced it with a 100-room mandate.

Under the new regulation, all businesses that wanted to offer unrestricted gambling could, anywhere in Reno, not just downtown, but had to have 100 or more lodging rooms on offer. Previously, that hadn’t been the case for properties within the designated zone.

Seventeen downtown casinos were grandfathered in under the new law; if they were to expand their casinos, they wouldn’t have to construct 100 rooms if the added space adjoined their existing gambling facility.

The new ordinance, which seemed more restrictive than the original, came under attack. But it stood.

Sources

Embassy Club interior

1936-Present

If it weren’t for gambler Ernest J. Primm’s nerve and fortitude, California’s nearly 90 card clubs wouldn’t exist today.

With a gambling license from the City of Gardena (in Los Angeles County), he opened a poker room there in 1936 — the Embassy Club. It was the first aboveground establishment of its kind since The Golden State’s anti-gambling legislation had been enacted in 1860.

Players, who competed against each other, not the house, each rented a seat for $1 ($17 today) and chips — which is how the business made money.

Primm viewed the enterprise as legal given the existing state and local gambling laws. California’s Anti-Gambling Act banned all banking* and percentage** games involving cards, dice or any other devices, along with 11 specific games. Non-banking poker wasn’t excluded.

Unlike Primm, law enforcement officials viewed even non-banking poker as illegal. Captain George “Ironman” Contreras, head of the Los Angeles County Sheriff’s vice squad, for instance, believed the commercialization of the game was wrong despite no regulations against it.

“I don’t object to draw poker in private homes, but I feel it is improper in clubs where the proprietors charge a fee for the tables,” he said (Los Angeles Times, Nov. 7, 1938).

Round One: Is Poker Legal?

A year after the Embassy Club debuted, four men — three players and one employee — were arrested, charged with illegal gambling and taken to trial. It resulted in California Attorney General Ulysses Webb, in 1938, reaffirming the Supreme Court decision from 41 years earlier that gambling doesn’t violate the state’s laws unless there’s a house percentage or banker for the games.

The judge acquitted all of the defendants due to insufficient evidence based on Webb’s ruling. Primm kept operating his establishment, and other similar clubs sprang up in the county.

Round Two: Another Test Case

Yet, despite his own ruling, Webb pursued closure of these poker palaces with the help of Southern California law enforcement groups.

“My opinion, right or wrong, doesn’t justify gambling,” Webb responded, reported the Los Angeles Times (Nov. 5, 1938.)

In November 1938, Webb ordered the shuttering of card rooms in Gardena, Hawthorne, Redondo Beach, Ocean Park and Long Beach — all in Los Angeles County. Many closed willingly. Sheriff’s squads stormed those that didn’t (Primm’s Embassy and two Hawthorne clubs), seized their equipment and padlocked the doors.

“Capt. Contreras said yesterday’s raids should result in a test case to determine if draw poker is legal in California. He said owners will have to seek Superior Court writs to regain their paraphernalia,” reported the Los Angeles Times (Nov. 7, 1938).

Another trial ensued, which involved Primm and other operators, who were victorious. The judge acquitted them and mandated their gambling equipment be returned.

Round Three: A Different Tack

Webb and his supporters, though, persisted in their anti-poker efforts. They next sought legal closure of the clubs for being public nuisances, targeting the Embassy Club for the precedent. Primm and his co-owners again were prohibited from conducting gambling on the property until the court ruling. At that hearing, the judge ruled on Webb’s side, determining the clubs met the definition of public nuisances and, thus, were subject to abatement proceedings.

“A house which is open to the public as a gaming house at which large numbers of persons congregate for the purpose of betting on a game is a public nuisance even though the game itself might be innocent and harmless,” he said (Los Angeles Times, Feb. 3, 1939).

He issued permanent injunctions against all of the poker parlors in Gardena and Hawthorne, forcing them to halt all activity. This remained in effect for two years.

Total Knockout: Poker Allowed

In the interim, Primm and his co-owners of Gardena’s Monterey Club filed an appeal, which the State District  Court of Appeals heard in 1941. The jurists determined that non-banking poker was legal!

“Neither playing draw poker or maintaining a place where it is played being an offense, it follows that the city of Gardena was authorized to license and regulate the operations of such pastime within its corporate limits,” Associate Justice Thomas P. White wrote in the opinion (Los Angeles Times, Nov. 29, 1941).

“Gambling is neither unlawful per se or a public nuisance per se in California. Playing at any game, even for money, is not in itself an offense at common law. The offense, if any, must be created by statute, and can only be punished as the statute directs,” White explained.

Finally allowed to operate hassle free, card clubs in Los Angeles County thrived for decades, particularly those in Gardena, which evolved into California’s mecca for such gambling between the 1940s and 1970s. At one point, more revenue from these clubs went to that city than any other in California, and its poker version called Gardena jackpots is named after the locale, where it was hugely popular during the same period.

—————————–

*Banking games = those in which bets are placed against a house, bank or dealer
**Percentage games = banking games with relatively disproportionate odds

Sources

1952

When Ernest J. Primm owned the Monterey Club, a poker house in Gardena, California (a Los Angeles suburb), he claimed on his state income taxes the losses of his shills, up to $500 ($4,500 today) a month, as expenses or losses — illegitimate deductions.

Seven years later, it caught up with him. The state’s Franchise Tax Board assessed him $1,589 ($13,000 today) for that year when his enterprise grossed $1.3 million ($11.7 million today).

(Primm also owned the Embassy Club and Rainbow Club in Gardena and Club Primadonna in Reno, Nevada.)