1961-1966

Early in 1961, Michael Catrone, 60, an apartment complex owner, presented to the Nevada Club in Las Vegas a winning keno ticket for $25,000 ($198,000 today). Yet the casino’s general manager didn’t pay it because it was suspicious — the ink on the ticket was lighter than on other ones.

An internal inquiry revealed a discrepancy between the machine-generated original and duplicate. The copies typically were locked up and used to confirm a winning ticket.

Catrone complained to the Nevada Gaming Control Board (NGCB) the gambling house had stiffed him. The casino’s owner, Robert Van Santen, went to the police, claiming Catrone had tried to cheat the house and hired a private eye to look into the incident. Law enforcement, the NGCB and the district attorney’s (D.A.’s) office investigated.

Concluding that Catrone and two Nevada Club employees — Robert Pearson, 27, and Stanley Wagner, 28 — had colluded to take the casino, detectives theorized the perpetrators had run a blank ticket through the keno machine, then after the winning numbers had been posted, had opened the machine and had marked those digits on the ticket. The D.A. charged the three with attempting to obtain money under false pretenses (the doctored keno ticket) by defrauding the club.

NGCB agents looked into the matter and after receiving a confession from Wagner, told Van Santen he didn’t have to pay the $25,000.

In the preliminary hearing, the prosecution tried to introduce into evidence Wagner’s written and signed confession of his involvement, but the defense objected, noting the Nevada Club had offered Wagner $1,000 in exchange for the confession. (Was this true?) Later, claiming the casino had only given him $250 of the agreed upon $1,000, Wagner retracted his previous admission of guilt.

Prosecution’s House Of Cards

D.A. John Mendoza pursued a case against the three, all of whom pled innocent.

During the trial, which began in April 1962, the prosecution’s key witness, Frank Cirinna, a bartender at the Log Cabin, testified that Pearson had approached him about participating in an illegal keno ticket scheme. Cirinna, however, lied on the stand about his meetings with Van Santen, asserting he’d only met him once informally. (Had Van Santen asked or paid Cirinna to testify as he had about Pearson?)

Despite defense attorney Harry Claiborne grilling him about meeting with Van Santen more than once, Cirinna stuck to his story. When Mendoza questioned him, Cirinna admitted he’d lied but wouldn’t say why, so the judge had him jailed for contempt. After several hours, though, the judge freed him.

John Baptist Pollett (aka Johnny Dean) a former friend of Wagner and an ex-convict out on bail at the time for a disorderly charge in Reno, took the stand for the prosecution. During his testimony, it came out that someone, Dean refused to say who (perhaps Van Santen or his P.I.), offered him $3,500 to get a confession out of Wagner for the Nevada Club’s private investigator. Dean claimed he never got the $3,500. (Had Dean gotten the money or not? Was Dean supposed to give $1,000 of it to Wagner for his confession but only gave him $250?)

While Dean was on the stand, Mendoza filed a motion to dismiss the charges against all three defendants, as Claiborne had discredited his two key witnesses, Cirinna and Dean, and he didn’t believe he could win solely based on two document experts’ testimony. He noted that Cirinna and Dean, while testifying, had divulged information that Mendoza hadn’t known when he’d filed the complaint against the defendants. District Judge Compton agreed with the motion.

Back To The Money

Following the ruling, Van Santen reiterated his refusal to pay the disputed $25,000 because “the trial had nothing to do with the validity of the ticket” (Las Vegas Sun, May 2, 1962).

Claiborne tried to get the NGCB to force Van Santen to pay, to no avail. Mandating that a gambling win be paid or not wasn’t part of the NGCB’s role, Chairman Ed Olsen said.

“Our function is merely to determine whether the circumstances are such as to warrant the board in proceeding against a club’s license for unsuitable method of operation on the basis of a failure to pay a gambling win,” he added (Las Vegas Sun, Oct. 27, 1962).

Catrone and his attorney pursued a different tack for getting the money. They sued Van Santen and his corporation for $750,000 in damages for false imprisonment and malicious prosecution.

District Judge George Marshall, however, handed down a summary judgment in favor of the Nevada Club. On appeal, the Nevada Supreme Court, in 1966, unanimously affirmed the lower court’s ruling.

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1935

Although it was a Ponzi scheme, its lure of big money was too strong for many Renoites to resist. One chain letter business, the Opportunity Club, popped up overnight as part of the nationwide craze in 1935. In five days, it garnered more than 5,000 participants (about one-quarter of Reno, Nevada’s population then).

“The business has been well organized and every section of the town has been invaded with ‘investors’ seeking to attract their friends into a ‘sure thing,’” reported the Nevada State Journal (May 15, 1935).

How did it work? A customer bought two copies of a letter from a broker for $5 (an $86 value today). He then sold them to two people who signed for and received two more letters from the broker. Each of those two sold their letters to two other individuals and so on. Each letter contained six names. The payout for the top name getting 64 people to buy each of his two letters was $256 ($4,400 today). That amount was $320 minus the per-letter 20 percent broker fee of $32. One name moving to the top of a letter would put $12,288 in the company’s coffers.

While it sounded enticing for the public, it wasn’t. The deal depended on an individual getting 128 (64 per letter) people to pay the $5 apiece at the broker’s office. That would move him up one spot on each letter. The payout also required 128 people for each of the other five names on the letter, or 640 individuals, also paid $5 apiece in person Further, an individual couldn’t get the reward until he advanced to the top of two letters.

The Weak Link

When District Attorney Ernest Brown learned of the racket, he demanded the Opportunity Club cease operations immediately and threatened its manager, Ralph C. Perrin, and other principals with prosecution if they didn’t comply. Brown declared such a business fraudulent because it involved an element of chance and, therefore, violated Nevada’s anti-lottery law, in which it defined:

“A lottery is any scheme for the disposal or distribution of property, by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property, or a portion of it, or for any share or any interest in such property upon any agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance, whether called a lottery, raffle or gift enterprise, or by whatever name may be known.”

The following morning, Perrin applied for a gambling license. That night, the sheriff noted a sign on the club’s door, “Operating with Permission of the Sheriff” — a false statement. On the D.A.’s orders, the sheriff closed the club and arrested Perrin and three others. All were arraigned and released on their own recognizance pending an upcoming jury trial.

A second chain letter brokerage — the Golden Chain Letter Club — was about to open but given the heat on Opportunity never did.

Perrin asserted the chain letter business:

• Wasn’t a lottery as chance didn’t play a role
• Didn’t have the chance of any investor losing (ha!)
• Didn’t involve a drawing

If the business were a lottery, they argued, then so were other types of currently licensed games, such as roulette, keno, 21, horse racing, etc.

They gathered petition signatures of people who believed similarly. Perrin claimed to have received 1,500 signatures from less than one day’s effort. In the meantime, many who’d bought letters asked the D.A.’s office what would happen. Would officials ensure the investors got what the broker promised them? Would they lose their money? At that point, it totaled about $25,000, which Perrin said was being held for investors in a trust.

Taken To A Jury

Five days after Brown ordered the club closed and with chain letter activities finally halted, the Opportunity Club trial began. Two days in, Justice of the Peace James Sullivan declared Brown’s complaint against the defendants defective, thus ending the case. Brown said he’d issue a new complaint against the men only if they restarted the business. Opportunity’s lawyer said the men intended to operate if the city granted them a gambling license — a long shot.

Three days later, the city council, also believing the chain letter gig was a lottery, denied Perrin a gambling license. He then tried to obtain one from the neighboring city and his hometown, Sparks. It, too, for the same reason, refused to grant it. That was the final break in Northern Nevada’s chain of chain letter enterprises. It’s unknown what happened to the money investors already had paid to Opportunity.

Photo from pond5.com: “JOIN Chain Links” by 5@iqoncep

Sources

Mexico’s Monte Carlo and Sunset Inn

1913-1929

With various state bans on gambling and, later, a nationwide prohibition against liquor, many Americans, particularly wealthy Southern Californians, traveled to casinos in Mexican border cities to play and imbibe.

“The great hegira* is in, and already these towns are filled to the limit with throngs of the thirsty, willing to pay big sums for the pleasures banned by law on American soil,” reported the Reno Evening Gazette (March 30, 1920).

Here are some casinos that lured U.S. citizens across the border to do what they legally couldn’t at home:

In Calexico

• Owl (Tecolote) Café and Theatre: Large but unadorned, “an immense barn-like structure,” the Owl boasted nearly 40 tables for keno, faro and poker along with many roulette wheels (The Bakersfield Californian, Feb. 10, 1920). Advertisements for the gaming resort touted: “Both night and day, across the way, you will never find closed, the Owl Café.” Three Bakersfield, California, saloon and brothel owners — Marvin Allen, Frank Beyer and Carl Withington — or ABC Corp., opened the Owl around 1913. Seven years later, a fire that raged for three hours burned it down.

“The destruction of the Owl leaves one large gambling house in Mexicali, a Chinese establishment where many of the games are beyond the ken** of the average American,” reported The Bakersfield Californian (Feb. 10, 1920).

In Mexicali

• Casino de Mexicali: Following the conflagration of the Owl, Governor Esteban Cantu of Baja, California, built and oversaw in his capital city the upscale Casino de Mexicali, which also was open 24/7. Luxuriously appointed, the entire top floor was divided into suites equipped with games for wagering. Cantu charged customers an initial $250 membership tax (about $2,950 today) and a $20 monthly fee. In the first month alone, 2,000 people had joined. In its early days, the Casino de Mexicali drew about 25,000 to 30,000 Americans per day.

“The project stood Cantu an even million dollars before a wheel turned,” noted the Reno Evening Gazette (March 30, 1920).

In Tijuana

• Feria Típica: This traditional fair, the brainchild of Antonio Elosúa, offered gambling in the forms of cockfighting, bullfighting, bull baiting and horse racing along with folk dancing and Mexican food and drink. It debuted in 1915 with the slogan: “Where Everything Goes and Where Everyone Goes.”
• Monte Carlo: Elosúa opened this casino the following year. Adjacent to the Feria Típica’s open-air arena, it offered cards and dice table games, slot machines and roulette wheels. By 1917, ABC Corp. had bought out all of Elosúa’s holdings.
• Sunset Inn: ABC Corp. and Jim Coffroth built in 1920 this new $1 million casino with a balcony that overlooked the racetrack. The proprietors added to the casino’s events schedule many of the feria’s most popular exhibitions, like bullfighting.

“To lure and keep gamblers on the property, the new Monte Carlo served decent enough 75-cent meals and the dance hall stayed open all night,” wrote Lawrence D. Taylor (San Diego Historical Society Quarterly, Summer 2002).

• Agua Caliente Casino and Hotel: Another trio of Americans — Wirt G. Bowman, Baron Long and James N. Crofton — built this ornate, $10 million, Spanish-style resort that boasted a casino offering faro, roulette and baccarat, horse and greyhound racing among other recreational amenities. Four-person bungalows allowed for gambling in private. Located six miles south of the border near the hot spring, the property opened in two phases, in 1928 and 1929. During its heyday, Agua Caliente attracted a slew of tourists, among them famous Hollywood stars.

“American cupidity has enriched the gamblers of Augua [sic] Caliente more than $4 million in the past 10 months. The Old West in its heyday never saw such gambling as is being done at Augua Caliente these days,” reported The Kokomo Tribune (June 7, 1929).

The end of Prohibition curtailed the throngs of U.S. citizens visiting Mexico for pleasures.

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*A flight or journey to a more desirable or congenial place
**Understanding or knowledge

Sources

1861-present

Since becoming a U.S. territory, Nevada has undergone periods of full, partial and no legalization of gambling. Here’s a timeline of what types of games of chance legislators allowed or disallowed and when:

1861: GAMBLING ABOLISHED: The initial Nevada Territorial Legislature banned the dealing, running, opening, conducting or playing of any game of faro, monte, roulette, lansquenet or rouge et noir or any banking game (where the player bets against the house) played with cards, dice or any other device for anything of value.

1865: Anti-gaming law reiterated: In the first legislative session after Nevada joined the Union in 1864, lawmakers replaced the territorial law with a state statute outlining a similar ban.

1869: Gaming partially legalized: Nevada legalized only the games outlawed in 1861 and mandated operators be licensed.

1873: Lotteries prohibited: Lawmakers banned lotteries, which were defined as any scheme for the disposal or distribution of property, by chance, among paying players.

1875: Additional games legalized: The legislature approved keno, fantan, 21, Diana, and red white and blue.

1885: Legal/illegal games changed: An amendment allowed stud-horse poker, or percentage, with a license. It outlawed roulette.

1901: Slots deemed illegal: The state prohibited the playing or offering of nickel-in-the-slot machines or similar devices.

1903: Bookmaking allowed with license: A new act made it legal, with appropriate licensure, to engage in, conduct or carry on any bookmaking on horse races, prize fights or any games conducted outside of the state.

1905: Slots deemed legal: The state repealed the anti-slots law, thereby legalizing them with required licensure.

1910: GAMBLING ABOLISHED: The anti-gambling act went into effect at midnight Sept. 30, 1910. It disallowed all gambling mentioned in prior acts and amendments along with tan, fantan, seven and a half, hokey pokey, craps, klondike, whist, bridge whist, five hundred, solo and frog.  It also forbade any gambling games in which the operator, for making the game available, received compensation or reward or a share of the money or property wagered. It banned offering or playing slot machines along with all kinds of bookmaking.

1915: Some gambling excepted: The legislature legalized poker; stud-horse poker; five hundred; solo; whist; parimutuel betting on horse races; slot machines for the sales of cigars and drinks; and social games only played for drinks and cigars served individually or prizes up to $2 in value.

“Gambling on casino or old maid is a serious crime, a felony,” noted the Nevada State Journal (Sept. 28, 1930). “But on poker or solo or whist it is all right. Betting on a dog race is felonious, but the same bet on a horse race is clothed with the sanctity of the law.”

1931: WIDE-OPEN GAMBLING LEGALIZED: Lawmakers passed a liberal gaming law that remains in effect today, which legalized all forms of gambling except lotteries and which required licensing of operators. Along with slot machines, the law listed the approved games: faro, monte, roulette, keno, fantan, twenty-one (blackjack), seven and a half, big injun, klondike, craps, stud poker and draw poker. The law permitted slot machines; any banking or percentage game played with cards, dice or any mechanical device or machine; and any game in which the operator receives compensation or reward. It also removed the rules surrounding social games.

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