Sheriff E. Russell Trathen

1931

In April 1931, the month after the new, liberal gambling law went into effect (March 19), Washoe County Sheriff E. Russell Trathen, per his job description, collected $20,000 (about $330,000 today) in gambling license fees for the month of April from operators in Northern Nevada.

Seeking Piece Of The Pie

First, Trathen went to the Washoe County Commission (WCC) and demanded 6 percent of the total in commission, which amounted to about $720 ($11,800 today). He argued he was entitled to it based on the state’s license tax act of 1915, which afforded sheriffs a 6 percent cut of the proceeds of all business licenses (and 20% of grazing licenses) sold.

The commissioners sought a legal opinion from District Attorney Melvin Jepson, who advised them that according to the law, Trathen wasn’t owed or due any compensation for the collection of license fees. The WCC told the sheriff no.

Next Course Of Action

Trathen then retained Attorney Lester D. Summerfield. In early May, the two filed for a writ of mandamus, which is an order from a superior court to a lower court, government entity, corporation or public entity to take or not take an action, as required by law. Summerfield/Trathen asked the Nevada Supreme Court to order the county treasurer to  accept the license fees Trathen had collected minus 6 percent becuase the treasurer had refused to do so the prior month, April. (Another mandamus action related to the new gambling law was taken earlier in the month in Las Vegas.)

“The case attracted wide interest through the state, as sheriffs of other counties might be able to collect a commission on gambling licenses” the Reno Evening Gazette noted (July 8, 1931).

Not Like The Others

On July 8, 1931, the higher court dismissed the writ of mandamus and issued its ruling, which was unanimous: Nevada sheriffs aren’t authorized to retain any part of the gambling license fees they collect. They said the 1931 gambling act, unlike the 1915 law, lacked a provision for such a commission.

What the new legislation did spell out was that sheriffs were responsible for unpaid fees; they were “held liable on [their] official bond for all moneys due for such licenses remaining uncollected by reason of [their] negligence,” reported the Nevada State Journal (July 9, 1931).

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Photo from Police Motor Units

1908

Two deputy sheriffs in the mining camp of Rawhide, Nevada,* were on the take. For a regularly paid fee, they allowed establishments to operate legal games without a license and/or run banned ones as well.

Sometimes they allowed gambling houses that paid heavy license fees on some games to conduct others without paying for a license. The lawmen squeezed these monies from the operators and the saloon owners where such activities occurred.

One proprietor who benefitted from the arrangement was George “Tex” Rickard, owner of The Northern. He paid $760 per quarter for licenses for most of the games in his club. However, he offered other games, both unlawful (stud poker and poker) and lawful (panguingue), without the required legal papers.

This grafting had taken place since Rawhide’s beginning in December 1906, when a prospector discovered a rich gold-silver deposit nearby.

When the Reno newspaper exposed the scheme in early 1908, the state police investigated, discovering “one of the greatest systems of graft ever perpetrated in this state,” noted the Reno Evening Gazette (April 11, 1908). When they learned Rickard refused to obtain the licenses to square with the gaming law, they threatened him with arrest.

The Legal Fallout

Within days, Rickard and his partner were taken to jail and charged with running gambling without licenses.

Two weeks passed before consequences from the graft probe’s findings played out. The district attorney ordered state police officers to collect gambling license fees from Rickard (whose case had been dismissed in the interim) and others operating similarly. The allegedly guilty Rawhide deputy sheriffs were fired and indicted on extortion charges.

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*The Nevada town was about 55 miles southeast of Fallon and 35 miles northeast of Hawthorne.

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The Willows in Reno, Nevada

1931

Despite an influx of newsmen into town to report what gambling now looked like in Nevada’s biggest city immediately following legalization, a move they described as “reviving the days of the pioneer west,” the status quo endured (Nevada State Journal, March 21, 1931).

“There was no wild rush to the gambling resorts and the Saturday night celebration was but little different from that of other Saturday nights. The only apparent difference … was to center interest of the country on the fact that people gambled in Reno and now may continue doing so, without violating a law,” the Reno Evening Gazette reported (March 23, 1931).

After Governor Frederick “Fred” Balzar had signed the bill into law on Thursday, March 19, 1931, the business-as-usual atmosphere primarily was because some forms of gambling already were legal prior to him doing so and other illegal forms operated, albeit underground. High-stakes and roulette games were new, though, and began to appear.

A Minor Snafu

The recent legislation required any casino to obtain a license and pay the necessary fees in advance for every gaming table and/or slot machine they had on site. Any new enterprises, therefore, had to do so immediately, but those already licensed under the previous law could wait until their existing one, good for three months, expired.

In Northern Nevada, a minor snag, however, prevented the Washoe County sheriff from issuing licenses to anyone who’d applied. He didn’t have the necessary forms because the printing company hadn’t delivered them yet. This delay spanned five work days. Finally, on Thursday, March 26, Sheriff E. Russell Trathen dispensed the first license to the proprietor of the Owl Club. By week’s end, he’d issued 64 to various businesses.

In Southern Nevada, the first Las Vegas city gambling license went to the owners of the Northern Club the day after the new gambling law went into effect. The Northern Club, outside of town, received the first Clark County gambling license. Soon, the first lawsuit concerning licensing under the new law would be filed. 

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1935

In 1934, John Petricciani regained use of his Reno, Nevada, property he’d owned for 10 years and first licensed his saloon, the Palace Bar, for roulette and 21 games, one apiece. Prior, he’d leased space in the building to various business owners, including local mobsters, William “Bill” Graham and James McKay, who’d operated their Bank Palace Club on the top floor for three years.

In 1935, the Italian enlarged and remodeled the property, which included a bar, club and café, and added a 32-room hotel. He changed the name to the Palace Club and obtained licenses for eight games — two craps, two faro, two roulette, one 21 and one stud poker — along with six slot machines. The new and improved facilities debuted on June 1, 1935.

Three-and-a-half months later, police arrested Petricciani on a warrant for failing to pay license fees on several gambling devices. He was to stand trial.

When the state legislature broadly legalized gambling in 1931, the law mandated that casino owners or operators obtain a license and pay the fee for each of their gaming tables and slot machines. The required monthly amounts, due quarterly and in advance, were:

• $25 for card games for money
• $10 for slot machines
• $50 for other games

The court postponed Petricciani’s trial four times for various reasons; one was a suddenly announced, once-only state holiday in observance of completion of the Hoover Dam. Finally, in October, he paid the outstanding debt, more than $1,000 ($17,520 in today’s value), much of that being penalties.

City Attorney Douglas Busey capitalized on the occasion to publicly remind all gambling license holders to pay their fees on time.

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