A sextet of flimflammers arrived in Las Vegas, Nevada in December, set up at the corner of Main and Fremont Streets and began separating the locals from their money.

” … the spindle was ‘cleaning’ the town — getting away with large sums of ready money, which would otherwise have gone to local merchants or citizens who conduct legitimate gambling games,” reported the Las Vegas Age (Dec. 22, 1906).

The scam involved a spindle game, a classic carnival con involving a spinning wheel. The spindle is spun, eventually stopping at a pin, which is associated with a good or bad prize.

Even in an honestly operated game, the player’s chances of winning were low.

In a cheating game, the operator could physically manipulate the pointer to stop at certain pins. How? The pins were twisted into the board, some ever so slightly higher than others. With a secret gaff, the pointer could be moved up or down to hit either lower- or higher-set pins.

Because the gang had obtained a gambling license from the deputy sheriff, their swindling activity was tolerated for several days. It all came to a head, however, when they fleeced a young man said to be “unsophisticated” out of $125 ($600 in 1913, the earliest year for which inflation conversion is available), and the neighbors encouraged him to press charges. He did.

The scammers were arrested and pled not guilty.

At their ensuing hearing, evidence proved the spindle game was what the Nevada statutes defined as a “hogging” game — one that easily lent itself to cheating — which was illegal. However, based on insufficient evidence against the gamblers, the judge dismissed the case.

The hucksters continued to fleece the locals for another week and, again, were arrested. The second trial ended as the first had.

That time, however, the con men got the hint and left town.

Sources

Lorenzi Lake Park c. 1931

1931

Soon after Governor Frederic “Fred” B. Balzar approved wide-open gambling for Nevada, three men applied for an initial gambling license  from the City of Las Vegas to operate a craps game at Lorenzi Lake Park in the Pavilion building.

Lorenzi, with a pool, dance area, two lakes, rowboats and concessions and an affordable entry fee, was a local hot spot for fun. Numerous events, including concerts, prize fights, horse races, dance contests and beauty pageants, took place there.

The city commissioners denied Roy Grimes, R.H. Davenport and D.J. MacCauley a gambling permit, which they believed was unjust and discriminatory. The new state gambling law began on March 19, and they’d filed their application on April 17, in proper form and meeting all the necessary requirements.

Agency’s Approach Questioned

In fact, the commissioners’ refusal to grant the three men a license was in accord with the agency’s recently adopted resolution, on March 30, that it only would afford gambling licenses in the future to entities that already had one from the previous quarter. The moratorium was to go into effect on April 5 and remain in place until the agency could develop a policy for issuing new licenses and outline a city area in which gambling houses could operate.

However, prior to moratorium decision, the commissioners had granted gambling licenses to six clubs — Boulder, Las Vegas, Exchange, Northern, Red Rooster and Meadows.

“The city commissioners arbitrarily fixed the number to be granted at six, and rejected all other applications other than the six favored ones” reported the Nevada State Journal (May 28, 1931).

Further, after the decision, the commissioners make an exception to the moratorium, which was they could grant  gambling licenses to people of the “Ethiopian race” for games at establishments “that catered to persons of the same race.”

Off To The Courts

In early May, Grimes, Davenport and McCauley filed for a writ of mandamus against the Las Vegas mayor and city commissioners, the first court action to be filed in Nevada regarding the 1931 state gambling law. They wanted the court to compel the agency to give them a gambling license. (Another mandamus action in the wake of the new gambling law was taken later in the month, in Northern Nevada.) The trio’s attorney, Charles Lee Horsey, argued that “the law prohibits discriminations and that all who conform to the same standards must be given the same privileges.”

On May 27, the case was presented to the Nevada Supreme Court, whose jurists had to determine whether or not city or county authorities have the right to limit the number of gambling licenses to be issued in a community.

Gambling Stigma Revealed

The ruling, which came two months later, in July, was the opinion of two of the three judges, Edward A. Ducker and Benjamin W. Coleman. It determined that “the city of Las Vegas exercised sound discretion in denying the application” because it was for a type of business that was “of a character regarded as tending to be injurious” (Nevada State Journal, July 9, 1931).  And when it came to this kind of enterprise, governing bodies could control which ones did and didn’t receive gambling licenses.

Contrarily, Judge John A. Sanders, the sole dissenter, opined that the commissioners indeed had acted arbitrarily and discriminatorily and that the writ should be granted.

Sources

Photo from the University of Nevada, Las Vegas University Libraries’ Digital Collection

1953

1960-1961

Singer Tony Martin applied for a gambling license to acquire a 2 percent interest for $50,000 ($410,000 today) in the Riviera hotel-casino in Las Vegas. Investigation into his background revealed he’d served two days in a Los Angeles jail in 1947 after having pleaded guilty to speeding.

Consequently, Nevada’s gambling regulators required he explain the arrest and why he hadn’t disclosed it on his application before they’d consider him for the permit.

Martin did so, to their satisfaction, and received a gambling license in spring 1961.

Photo from Wikimedia Commons: by NBC Radio

Silver Slipper, 1950s

1956

The gambling licensees of the Dunes and Silver Slipper casinos applied to restart bingo on the premises, but the Nevada Gaming Commission denied their request, stating that the return of the game to the Las Vegas Strip would be detrimental to the area.

This was because in prior years when bingo had been permitted, the competition had gotten out of hand and the ample prize money had drawn so many people, it had created traffic problems.

Tango game, Las Vegas, Nevada

1946

Some Las Vegas, Nevada casinos handed out women’s nylons as slot machine and tango game* prizes.

When the city’s board of commissioners found out, they banned it, threatening repeat offenders with losing their gambling license.

It wasn’t the hosiery the officials took offense to; it was the casinos offering merchandise to encourage the playing of traditional games of chance.

“We are endeavoring to maintain gaming on a high plane and feel bound to discourage and eliminate any practice which may impugn the dignity of our gaming establishments,” they said (Nevada State Journal, Oct. 12, 1946).

———————————

* Tango is similar to bingo and keno

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.

—————————–

* 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

1949-1950

The Den opened its doors in spring 1949. The proprietors — Donald A. Bentley, John R. Hope and Robert M. Colahan — likely were hoping for at least as long a run as their predecessors’, nine-plus years, when the property was called the Louvre. But it didn’t happen.

In mid-September 1949, from the basement of that Reno, Nevada saloon/gambling club, a burglar punched a hole in the wall near the door, reached in and opened the lock. After entry, he stole a cash box said to contain $586 (about $5,900 today) in cash and checks, a valuable watch and an agate ring.

The next month, a seemingly unprovoked assault occurred. While a Fallon resident, Francis N. Coolbrith, talked to the bartender in the club, around 7 a.m., a stocky man in his early 30s punched Coolbrith in the face, fracturing the bone below one of his eyes.

The next year, on New Year’s Day, a man named Lloyd McCrorey entered The Den at about 5 a.m. A short time later, gunshots hit him in both legs and severed his right pinkie finger. The victim told officers he didn’t know who’d shot him or why, and all patrons claimed they hadn’t seen anything. Police identified the weapon as a German Luger from the spent shell casings but not the shooter. 

Too Much Crime

When The Den’s gambling license came up for renewal, Chief of Police L.R. Greeson recommended denial because the establishment, in his mind, was a nuisance. The determining body, the Reno City Council, concurred in a unanimous vote.

Bentley, the principal owner, protested, arguing he hadn’t been warned of impending trouble.

“That’s putting us out in the street without enough money to get out of town,” he said.

Mayor Francis R. Smith responded, “I think you are aware of all the reasons the license was not renewed.”

Bentley pleaded for a special permit, at a minimum, so he and his co-owners could operate the bar for a bit longer to make enough money to leave town.

The council members said no, meaning the enterprise had to close immediately.

Hot Way Out

Six hours later, at about 1:15 a.m., a small blaze broke out in The Den’s lowest floor. The fire department extinguished it easily and concluded it had been man-made and ignited in a pile of boxes.

About two hours later, while firemen were questioning Bentley, a second, larger fire erupted in the same room, that one gutting the building and damaging four adjacent businesses.

Authorities, who suspected arson, conducted numerous interviews. Witnesses said little, only that they’d smelled gas fumes just before they saw the fire, which they described as scorching and fast spreading.

“We seem to be dealing with close-mouthed individuals,” Fire Chief Karl L. Evans said, adding that the inferno hadn’t been a rekindling of the first and, too, had been set deliberately.

Also seemingly suspicious was that someone, prior to the flames, had emptied The Den’s slot machine’s coin box. That had required removal of the back paneling, which appeared to have been done carefully but replacement of it, haphazardly.

Bentley said a handful of insurance policies on The Den were in place but had burned, and as such, he didn’t know their value. In fact, the building and its contents were indemnified for $25,000 (a roughly $250,000 value today) — $10,000 for equipment, $5,000 for merchandise and $10,000 for interruption of business.

In spring, the operators of Benetti Novelty Co., a slot machine and juke box distributor, Louis Benetti and Jack Douglass, sued The Den’s proprietors for payment on four unpaid notes totaling $6,540. Douglass, also the landowner, asked the court to terminate his lease agreement with the trio, which they’d breached by not maintaining their liquor license.

The defendants failed to answer the suit, therefore, a judgment was entered by default. Judge William McKnight ordered them to return the property to Douglass and to pay the plaintiffs $8,000, including attorneys’ fees and interest (about $80,000 today).

Financial Recovery Fizzles

In July, Bentley, Colahan and Hope sued the New York Fire Insurance Co. and the Orient Insurance Co. of Connecticut because neither had paid on The Den’s policies. They asked for $10,000 from the former for damage to the club and $1,000 from the latter for lost inventory.

The insurance companies filed a demurrer, or an objection that the insureds’ point was invalid. The judge, though, overruled it and mandated they reply to the complaints against them within 15 days.

They did, noting The Den owners hadn’t submitted the requisite itemized list of items lost in the fire within the stipulated 60 days following the event. They hadn’t provided any records at all.

Sources

Photo from freeimages.com: “Fire” by Rick Cowan

1958-1959

(Part I ran last week.)

The Nevada Tax Commission withdrew the gambling license of the New Star casino’s operators — Brent Mackie and Kenneth Henton — in July 1958 after investigators allegedly witnessed 21 dealers cheating customers in eight different ways at the Winnemucca casino.

Later that month, defense attorney Thomas Foley of Las Vegas, petitioned the district court to review the tax commission’s license revocation order on the grounds that it was “capricious and arbitrary” (Reno Evening Gazette, July 29, 1958). District Judge Merwyn H. Brown ordered the agency to defend its action.

Bias Alleged

However, Brown was automatically disqualified from hearing the case. This was due to Nevada Gaming Control Board (NGCB) member, William Sinnott, alleging via an affidavit that Brown, also of Winnemucca, possibly was biased against the tax commission as he’d ruled on the side of the Thunderbird Hotel in Las Vegas when its gambling license was in contention. 

The commission also was concerned Brown had become too close to Mackie and Henton when they’d owned the Mint Club casino in town previously.

“I’ve been booted off the case for an asinine reason,” Brown said (Reno Evening Gazette, July 30, 1958). “Frank Petersen [NGCB’s counsel] called and said he felt I was disqualified because a lady who has been my neighbor for 30 years owns a half interest in the building in which the New Star casino is located. I told Petersen that if that reason is valid, I can’t sit on any case because I have had friends here for 50 years.”

Legal Sparring Ensues

In August, District Judge John F. Sexton of Battle Mountain, Brown’s replacement, stated the license revocation was too strict, and as such, he lessened the penalty to closure of only the 21 game for 60 days and covering of the dice table for 30 days with time served taken into account. Mackie and Henton still could operate the slot machines.

Petersen, attorney for the gaming regulators, called the alteration “improper and prejudicial,” pointing out that Sexton must have determined cheating had taken place or he would’ve reversed the revocation (Nevada State Journal, Dec. 11, 1958).

“Sexton’s modification decision was another milestone in the evolution of Nevada’s thorny problem in policing the state’s multimillion-dollar legalized gambling industry,” noted the Nevada State Journal (Aug. 9, 1958).

Petersen appealed to the Nevada Supreme Court. In mid-August, that court sided with the tax commission, granted its motion to stay Sexton’s order, or in other words, reinstated the license revocation and casino closure.

One Last Tack

Mackie and Henton, however, continued to fight. Foley asked the high court to dismiss the tax commission’s appeal of the district court decision that eased the revocation order and, instead, to allow a motion for re-hearing of the testimony in the lower court.

That effort, too, was unsuccessful as the Nevada Supreme Court in September said it, not the district courts, was the final arbiter on appeals concerning state gambling regulation orders.

Foley again appealed to the higher court, the second time asking the revocation be overturned because evidence had been lacking and insufficient for the penalty to be imposed initially.

In court in December, the justices asked Petersen how the tax commission could function in a judicial capacity when there was a dispute over which witness to believe and the commission itself had not observed the witnesses. (Before 1955, the tax commission directly heard all hearing testimony but that duty was transferred to the NGCB when the legislature created the entity that year).

Petersen replied that the commission has the record of the gaming board hearing and determines the weight and credibility to be accorded to the various accounts.

Out Of Gas

In January 1959, the Nevada Supreme Court found that Sexton’s order to reduce the penalty was administrative rather than judicial. It also determined a reasonable cause for the revocation had existed. The final ruling was that Mackie and Henton’s gambling license for New Star would remain cancelled for the requisite year, and it was.

Gambling At New Star Revived

That didn’t mean a different party couldn’t obtain a license and run the gambling at New Star. In fact, that’s what happened.

In February, the tax commission granted a gambling license to Sumner and Doris Kirkby to operate 20 slot machines at the club. The next month, it approved Roland I. Benum of Las Vegas to run blackjack and dice games there, too, with a $25 table limit, a restriction that in July was removed.

In December 1960, Harold Larraguetta invested $40,729 in and assumed control of the entire casino operation, which he ran for four years.

Sources

Photo from freeimages.com: by Steve Roberts

1948

Arthur T. Morgan belligerently stormed into the Big Hat casino on Highway 91 (outside Las Vegas, Nevada) at about 1:30 a.m. on a Friday night in spring. He immediately began heckling, threatening to shoot and goading the proprietor, Sam Baker, into a gunfight.

“When we go, we’re going to go all the way, Sam, because I’m going to kill you,” Morgan, 40, said. “Shall we shoot it out at four paces” (Nevada State Journal, March 27, 1948)?

“You’re always this way when you’re drunk, Art — forget it,” Baker, 43, responded.

Baker had moved to Las Vegas from Chicago and purchased the Big Hat in spring of 1947. Prior to that, he’d been a politician in the Windy City under William “Big Bill” Hale Thompson, one of America’s most corrupt mayors. Further back, he was involved in minor gambling activities in Albuquerque and Shreveport, Louisiana.

Morgan, who’d been picking fights elsewhere in the Las Vegas area in the previous 24 hours, had opened and sold a nightclub west of Albuquerque years earlier. At the time he was in Las Vegas (only for a few days), he owned both a home and a package liquor store in New Mexico, and was ill with an unknown ailment.

The two were acquaintances from Albuquerque, where they’d gotten into “trouble with a woman,” said Clark County Sheriff Glen Jones, based on reports from New Mexico (Nevada State Journal, March 27, 1948).

The Feud Escalates

On the night of the confrontation, Morgan continued trash talking for two hours, with Baker trying to calm him.

Suddenly, at 3:57 a.m., both men drew their weapons, bullets flew and Morgan fell, never having gotten off a shot. Hit five times, his dead body lay sprawled on the casino floor, his .380 Beretta automatic at his side, his feet pointing toward the bar.

“I beat him to it,” Baker later told police.

The half-dozen or so witnesses to the taunting denied seeing the shooting take place.

Baker informed police officers he’d shot Morgan in self-defense but refused to discuss his prior relationship with the man or his own background. He was booked for investigation then released on $5,000 cash bond.

The subsequent inquest into the shooting found Baker’s claim to be valid. He only was charged with carrying a concealed weapon and fined $50 ($494 today) for that offense.

Consequently, the state tax commission pulled his gambling license, in September, without which he couldn’t turn a profit, he said. Instead, he ran the place as the Villa Venice, a restaurant without a casino.

Sources

Illustration from pond5: “Dueling Pistols” by lineartestpilot

Trailways bus parked at the Golden Nugget Casino in Sparks, Nevada, 1970

1969-present

When executives of Caesars Palace in Las Vegas, Nevada hosted 12 people from Kansas City in 1969 as part of a gambling junket, it unexpectedly backfired.

When their guests, after four days at the resort, boarded the plane to return home, Clark County sheriff’s deputies arrested all of them on charges of vagrancy because they were believed to be mobsters or associates.

The Nevada Gaming Control Board (NGCB) recommended that each of Caesars’ 59 shareholders be fined up to $50,000 and the casino, $10,000.

“Catering to persons of notorious or unsavory reputation or to persons who have extensive police records reflects or tends to reflect discredit upon the State of Nevada and the gaming industry and is a violation of the regulations in that it is an unsuitable method of operation,” the NGCB’s complaint noted  (Nevada State Journal, June 13, 1969).

Throughout the 1960s, these strategic trips brought hundreds of thousands of tourists to The Silver State to gamble. Under this type of arrangement, an employee or, most often, an independent operator, frequently out of state, found people with a good credit rating and a desire to gamble (some casinos required that visitors be able to lose $2,500) then transported them to a hotel-casino for a few days to play.

The gambling licensee assumed all costs of transportation, meals and accommodations in the hopes the guests would lose money — lots of it — in his casino. The junket organizer received about $50 per person per junket.

“The casinos spend millions for the trips from as far away as New York and try to recoup the money from patrons at the gambling tables,” reported the Reno Evening Gazette (February 17, 1967).

If a junket gambler exceeded his credit, the casino might give them a marker, or written IOU. Typically, the coordinator, or junketeer, was responsible for collecting that money for the casino once the guest got home.

Cheating, Extortion, Murder

The lack of rules governing these trips led to abuses by junketeers. Some were involved with organized crime. Some enlisted people who couldn’t meet the credit requirements, then loaned them money at exorbitant rates. Some skimmed off the debts they collected before turning the money over to the casino. Via phone, some threatened junket participants who owed money.

In early 1970, the Nevada Gaming Commission (NGC) proposed regulations that addressed these problems. Soon after, Harry Otake, 46, who’d facilitated many gambling junkets from Hawaii to Las Vegas and Lake Tahoe hotel-casinos, was found lifeless in the trunk of a car, having been strangled.

Police theorized that gangsters had murdered him, gamblers who’d lost significant amounts or from whom he’d attempted to collect on debts. Robbery was another possible motive, as Otake allegedly had $95,000 in his possession before his death.

Shaken by this homicide, NGC members got all casinos in the state to stop voluntarily all junkets run by non-employee agents until governing rules could be established.

Nevada Takes Control

That same year, after months of discussions and six drafts, the NGC adopted a rule calling for punishment, even potential gaming license revocation, of any casino doing business with unsavory junketeers.

In 1972, the NGC added further stipulations, which comprised Regulation 25. Among them, all junketeers, now called independent agents, had to register with the NGCB, and licensees could work only with those whom the board had approved.

All junketeers, now called independent agents, must register with the NGCB and provide certain documentation, including a copy of the agreement between the agent and the gaming licensee, financial info if the agent is to give money to the licensee and a designation of secondary representatives. Licensees had to report quarterly what agents they’d worked with during the previous three months.

Some minor additions in 1992 aimed to ensure agents and licensees were made aware of the rule’s requirements. Regulation 25 remains in effect today.

As for Caesars Palace, for some reason, the state dropped the matter, leaving the resort’s shareholders free from reprisal.

Sources