The hotel-casino resort in 1970

1970s

Caesars Palace in Las Vegas extended $160 million in credit to players in 1977. This was more than the then-considered staggering $106 million cost of the original MGM Grand (early ’70s), also in Sin City, and equals roughly $641 million today.

Offering credit to players who were deemed able to repay it was a common practice among Nevada casinos, and these IOUs, or markers, collectively could add up to great sums. In the 1970s the major casinos on the Las Vegas Strip had as much as $30 million in outstanding credit on their books ($135.5 million today) at any given time; for smaller off-Strip casinos, the figure was closer to $1 million ($4.5 million today).

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.

Louis Tom Dragna

1960-1967

Los Angeles mobsters, Louis Tom Dragna and John “The Bat” Battaglia, conversed in a hotel-casino cocktail lounge on the Las Vegas Strip one day in February 1960. But their visit was cut short when Nevada Gaming Control Board (NGCB) agents appeared with local police who arrested the two.

They charged them with vagrancy and threatened to arrest them the next time they appeared in Sin City (they soon after dropped the vagrancy charge).

Gaming authorities didn’t want either man in any Nevada casino, which they formalized via the “Black Book” two months after the undesirables’ arrest. The black book, whose creation had been in progress prior to the Dragna/Battaglia incident, contained the names of individuals casino operators had to keep out of their facilities or lose their gambling license.

The NGCB strictly enforced it, having those on the list kicked out of gambling clubs. Repeat offender Johnny Marshall (aka Marshall Caifano), triggerman for the Chicago syndicate with 18 arrests on his record between 1929 and 1951, found himself booted out several times.

“I agree with any measures necessary to keep the hoodlums out of Nevada,” said Nevada Governor Grant Sawyer. “The operators have a great responsibility to cooperate. We might as well serve notice on underworld characters right now that they are not welcome in Nevada and we aren’t going to have them here” (Nevada State Journal, Nov. 2, 1960).

Hashed Out In The Courts

That year, Dragna tested the constitutionality of the black book in the courts. He sought a federal court injunction against it and the members of both state gaming agencies. He claimed they caused Las Vegas hotels to refuse him entry, depriving him of his rights as a U.S. citizen.

Marshall also sued each gaming regulator along with Governor Sawyer for ($100 apiece) and the Desert Inn (for $150,000), whose staff had kicked him out.

In 1961, a U.S. District Court judge dismissed Dragna and Marshall’s suits on the grounds that gambling isn’t a protected federal civil right and the matter was a state one.

Marshall Pursues The Cause

Within the following year, Dragna dropped his appeal upon being sentenced to five years in prison for extorting the manager of a boxing champion.

As for Marshall’s case, the appellate judges remanded it to federal district court for trial. One justice suggested that “Nevada has as much right to keep suspect persons out of its casinos as Texas ranchers have to ban cattle with hoof and mouth disease” (Nevada State Journal, May 13, 1962).

Subsequently, Marshall lost in federal court and again appealed. In 1966, six years after gaming authorities distributed the black book, the U.S. Court of Appeals upheld its use. It noted that neither being put on the list nor being denied entry to casinos was unconstitutional.

The U.S. Supreme Court, in 1967, refused to hear the case, finally answering the civil rights question.

Sources

1967

New York publisher, Lyle Stuart, applied to the Nevada Gaming Commission for a gambling license to purchase 1 percent of the Aladdin Resort & Casino on the Las Vegas Strip for $25,000 ($178,000 today).

Regulators, though, denied him one due to his “unsuitable background” because a subsidiary of his company sold books that contained material they believed to be pornographic.

1931-1965

Nevada’s early gambling industry was “wrapped in a segregated White Curtain” (Reno Gazette-Journal, Feb. 27, 2008).

Between 1931, when Nevada legalized gambling, and 1965, African Americans were banned from gambling or even being present in the Silver State’s Caucasian-owned casinos, for fear their presence would scare away white patrons. Typically, any black person who entered a casino would be asked to leave. The only exception was African American men in military uniform, who, in rare cases, were allowed to stay and play.

These hospitality businesses, however, employed blacks as restroom attendants, maids, shoe shiners, cooks, janitors and porters. Owners required African American entertainers who performed on the premises to come and go via the rear or side doors and use the service elevators to not be seen.

In contrast, Asian- and African American-owned casinos permitted blacks entry and gambling privileges. For instance, blacks made up about 90 percent of guests at Bill H. Fong’s New China Club, in Reno. The Asian-American-owned Cosmo Club and the black-owned Harlem Club were two other integrated gambling places in Northern Nevada.

In Sin City

In Las Vegas, prior to the debut in 1955 of the first desegregated hotel-casino, the Moulin Rouge, African Americans weren’t thrown out of gambling clubs on The Strip but were made “to feel unwelcome,” wrote Wallace Turner in Gamblers’ Money. The Moulin Rouge was owned by one black man — boxing champion Joe Louis  —and two white men — Alexander Bisno and Louis Rubin. Although wildly successful at first, the enterprise only lasted a few months, closing and going bankrupt later in the same year.

Frank Sinatra, using his influence, advanced the idea that African Americans should and must be afforded equal rights. He forced the issue when he refused to perform at Las Vegas places where a mixed audience wasn’t allowed and when, on behalf of the Rat Pack, he wouldn’t accept gigs at venues that prohibited Sammy Davis, Jr. from staying in its hotel.

Five years later, NAACP president, Dr. James McMillan, and Nevada’s first black dentist, Charles West, asked to meet with civic leaders and, if refused, threatened a march down the Las Vegas Strip in protest of racial discrimination.

Subsequently, Nevada Governor Grant Sawyer, city officials, local law enforcement and hotel owners convened at the Moulin Rouge’s coffee shop to discuss blacks’ exclusion from the Strip. Out of that tète-a-tète came a pact — the Moulin Rouge Agreement — to end segregation immediately, but only at hotel-casinos on the Strip.

Full Inclusion

It would be another five years before African Americans could gamble freely in any Nevada casino. That came with the 1965 passage of a revised state Civil Rights Act. The amended law expanded anti-discrimination to specifically encompass casinos and bars.

Sources

1955

It’s hard to believe this ever happened in Nevada.

As an emergency measure, the state government approved a temporary moratorium on issuing gambling licenses. It was to last five months, until 30 days after the 1955 legislative session adjourned.

The freeze applied only to applications submitted to the tax commission after the legislation went into effect, not those already filed and pending. Naturally, immediately preceding enactment of Assembly Bill 104, a slew of new applications entered the system.

The moratorium was to fend off public attacks on Nevada’s $89 million ($791 million today) a year gambling industry for being dominated by mobsters and to show the public the state was tackling the problem. Nevada’s legislators were to use the moratorium period to consider revising the state’s few gambling laws.

The licensing suspension was badly received, particularly in Southern Nevada where certain parties believed it was the legislators’ way of curbing growth on the Las Vegas Strip. Even tax commission members publicly criticized it.

“Many of the legitimate honest people who live in Nevada and have lived here a long time are being held up by this moratorium, and they are not the people who are causing all this trouble,” said Paul McDermitt, tax commissioner of Las Vegas. “I feel that some of the larger licenses are the crux of the thing” (Nevada State Journal, Feb. 3, 1955).

Gov. Charles Russell, the commission chairman, complained that when the moratorium had first been run by him, it was to encompass all applications, with which he agreed. Yet, the law the legislature passed exempted those that were pending. The chances are pretty good shady characters were linked to at least one of those.

Step Toward Greater Control

During that legislative session, the state Assembly and Senate both introduced bills requiring creation of a three-member gambling control board—Assembly Bill 236 and Senate Bill 170, respectively.

AB236 would transfer all gambling control from the tax commission to the new agency whereas SB170 would allow the board to make recommendations on licensing actions to the tax commission, which would have the ultimate say. Under AB236, the governor would appoint the members from a list of candidates compiled by a legislative committee while SB170 would allow the governor to appoint those of his own choosing who then would have to meet tax commission approval. 

SB170 prevailed, establishing the Nevada Gaming Control Board (NGCB). It afforded the NGCB the power to determine which applicants were suitable for gambling licenses.

After passing that bill in March, legislators quickly repealed the moratorium, which had been in effect for only two months.

Sources

Clip art: by Dosnerd90

Las Vegas Strip (in red) runs through Winchester, Paradise

1950-Today

When people are on the Las Vegas Strip, they’re really in Paradise — the town, that is.

In 1950, a rumor surfaced that the City of Las Vegas’ boundaries would be expanded to include the then multimillion-dollar luxury resort area on South Las Vegas Boulevard. Disliking the idea, the proprietors of the hotel-casinos there collectively strategized to get the area in which their properties sat deemed an unincorporated town. That status would prevent the city from annexing it without the owners’ unanimous approval.

Money was the primary reason the Strip businesses opposed incorporation into Vegas. Costs — gambling and liquor license fees and taxes, for instance — within the city were higher than outside, specifically a tax rate of $5 per hundred dollars’ valuation versus $3.48.

In December the Clark County commissioners approved designation of a one-mile wide and four-mile long stretch as the unincorporated town of Paradise, said to be named after the Pair-O-Dice, a club whose property eventually became the Last Frontier.

These men comprised the newly formed, required town board:

• Gus Greenbaum / Flamingo: manager and associate of Meyer Lansky and Benjamin “Bugsy” Siegel (Greenbaum was Paradise’s board chairman)

• William J. Moore, Jr. / Last Frontier: developer, executive director and vice president

• Wilbur Clark / Desert Inn: front man for Cleveland mobster Moe Dalitz, the principal owner

• Marion Hicks / Thunderbird: architect and manager

• Beldon Katleman / El Rancho Vegas: owner

A major change for the properties in the new township was the lack of access to city services, including sewage disposal and fire protection services. Also, half of all gambling fees collected in Paradise had to be spent on public improvements within the town as opposed to throughout the county, as was the case before.

“What is good for the valley is good for the Strip. We hope this move will bring you better roads, better schools and better everything,” Greenbaum said at a town meeting.

In early 1951, property owners in Paradise Valley, the southern part of the Las Vegas Valley, sought and received approval to annex their unattached land to the newly established Paradise. This expanded the area to 54 square miles.

Paradise Divided

Later, out of the northern portion of Paradise, a second township was created, 7.5 square miles, that became known as Town A. The larger, remaining portion of the original unincorporated Paradise became Town B.

Eventually Towns A and B received official names.

In 1953, Town A was named Winchester. At the time, it encompassed the Sahara, El Rancho Vegas and Thunderbird hotel-casinos on the Strip’s northern end, as well as Last Frontier Village, the Las Vegas Park Race Track, numerous motels and some private homes. The Town A residents liked the name Winchester for its Western flavor and chose it over other suggested monikers, including McCarran, Sunset Heights, Empire, Silverado, Tiffany and Valhalla.

“In addition to getting a new name, the town figures to be one of the richest per capita in the world, since it covers practically all of the multi-million-dollar resort hotel industry, plus several costly motels and the expectation that another $20 million in new hotels will be erected in the near future,” reported the Reno Evening Gazette (Oct. 8, 1953).

Town B recaptured the original name, Paradise. Much larger in land size, it included the Desert Inn, Sands and Flamingo hotel-casinos on the Strip’s southern end and the Paradise Valley ranch area.

Attempt At Unification

In 1975, Governor Mike O’Callaghan signed Senate Bill 601, which would’ve doubled the size of Las Vegas by expanding its boundaries to include the Strip (Winchester and Paradise), Sunrise Manor and East Las Vegas — all unincorporated towns. The goal was to consolidate the various city and county governments and services.

However, before the change could be carried out, the Nevada Supreme Court, in June 1976, ruled that the legislation was unconstitutional for various reasons. One was because the law was passed during a special session, which is illegal per the Nevada Revised Statutes.

“I think that ends it for good,” said Senator James Gibson (D-Henderson), who’d introduced the bill. “It will probably kill [a] merger for quite a while in the future” (Las Vegas Sun, June 8, 1976).

Though relatively unknown except to locals, Paradise and Winchester still exist today, independent of Las Vegas.

Sources

El Rancho in Las Vegas, Nevada in the 1950s

1956

When auditors for Nevada reviewed its books, they discovered the El Rancho casino on the Las Vegas Strip had underpaid the requisite gambling taxes over nine quarters by $39,000 ($350,500 today).

Despite the claims of owners Beldon Katleman, et. al. that they believed they’d paid the proper amount, tax commissioners assessed a 100% penalty, the largest ever in Silver State history up to that date.

Rather than fight the issue, the El Rancho forked over the tax and the fine, $78,000 ($701,000 today).

The article, “Las Vegas Gamblers Arming in Control Battle,” ran on the front page of a Los Angeles newspaper in the third week of December, to the chagrin of Nevada gambling regulators, casino owners, officers of the law and other industry representatives.

The story reported that in the new iteration of Sin City:

• Casino owners (gamblers) were readying to fight for control of gambling there
• Many gamblers were carrying weapons and had armed bodyguards
• Men (presumably hired by the gamblers) were cruising competing casinos’ parking lots, trying to persuade guests to play at their clubs instead
• Ladies planted in cocktail lounges were directing visitors to specific casinos
• Although unreported, several physical beatings took place in gamblers’ inner circles
• One casino owner left the state because his life had been threatened*
• Fixers, dispatched by East Coast Mafia heads, were en route to negotiate a truce

Landscape At The Time

In the ’40s, downtown Las Vegas transformed when a handful of its gambling properties changed owners and names. The 1949, or post-war, Fremont Street was home to the:

Las Vegas Club (1930)
Boulder Club (1931)
Frontier Club (1935)
El Cortez Hotel (1941)
Western Club (1941)
Pioneer Club (1942)
Santa Anita Turf Bar (1943)
Monte Carlo (1945)
Golden Nugget (1946)
Club Savoy (1946)
El Dorado Club (1947)

Downtown Las Vegas in early 1950s

Also in that decade, the city saw the start of what would become the Las Vegas Strip, with the debut of this quartet of hotel-casinos:

El Rancho Vegas (1941)
Last Frontier (1942)
Flamingo (1946)
Thunderbird (1948)

Still fresh in the minds of those in the gambling world was the execution two years earlier, in 1947, of Benjamin “Bugsy” Siegel, violent mobster (Genovese crime family associate) and Meyer Lansky pal. Siegel had overseen (badly) the building of the Flamingo in Vegas, and had run the business until his murder.

In mid-December 1949, the Flamingo double-crossed Club Savoy, which was across the street, with a play that involved a cheating gambling stunt. The incident was extensively reported in the papers when Savoy’s owner refused to pay the Flamingo its winnings. It was negative publicity that gambling regulators and state officials disliked.

Also around the time, several casinos agreed to stop some of their blatant efforts to poach customers from other gambling properties. They’d used people on megaphones and “circus-type banners” to inform passersby that their slot machines had better payouts than their competitors’.

The L.A. newspaper article didn’t specify which gambling factions supposedly were fighting one another. Perhaps it was a Strip vs. downtown beef.

Similar, Widespread Reaction

The overarching response to the newspaper report from the big names in and associated with the Vegas gambling industry was denial: A turf war? What turf war? Calling the article’s contents hogwash, they deduced it merely was an attempt to hurt Nevada’s booming sector at a time it would feel it the most, the New Year’s Day weekend.

Here are some of the individuals who publicly weighed in and their comments. (All quotes are from the Nevada State Journal, Dec. 29, 1949.)

Gus Greenbaum, mobster, Meyer Lansky lieutenant and Flamingo hotel-casino president:

“The stories to that effect are fabricated entirely,” he said, specifically referring to an impending war for control. “No guns are being carried on any hotel or club property except by authorized personnel.”

Spokesman for the Nevada Tax Commission, the then gambling regulation agency:

Any impending warfare over gambling control “is news to us.”

Spokesman for the downtown casinos, who asked to remain anonymous:

“Relations between the gambling clubs and the casinos are more harmonious than ever. We think the story was carried mainly to counteract favorable publicity given our gaming recently by another Los Angeles newspaper. This whole business has been dreamed up by some eager newspaper correspondent.”

William J. Moore, Jr., Hotel Last Frontier executive vice president and tax commission member:

He wasn’t aware of any threats on the gambling scene, he said. In fact, the various gamblers have gotten along well in recent months and hold weekly meetings to hash out any issues. The story was “a deliberate attempt to keep California dollars from coming into the state, appearing as it did on the eve of the biggest weekend in the history of gambling in Las Vegas.” He added Vegas gamblers aren’t using “steerers,” or “persons corresponding roughly to ‘B’ girls in cocktail lounges who direct visitors to a certain casino,” which the state prohibits.

Archie Wells, City of Las Vegas acting police chief:

He didn’t know about any alleged beatings of certain gambling figures, he said. “We checked thoroughly and found no violence of any kind — reported or otherwise.” His department found no evidence the reports perhaps stemmed from possible attempts at revenge by Club Savoy.

Glen Jones, Clark County sheriff:

“We’ve received the utmost cooperation from all gambling operators.” He didn’t know of any gambler who was carrying a gun openly other than the special officers with deputy sheriff status in the clubs.

Informal Peace Summit

After the story appeared, the city’s casino and gambling club owners quickly convened to address its allegations.

They must’ve come to a mutually satisfactory resolution, if in fact a battle for gambling control had been underway or imminent, as no lives were taken . . . at least that we know of.

———————–

* One gambler, Beldon “Jake” Katleman, co-owner of the El Rancho Vegas, had traveled to the Middle East recently but was back in town at the time the newspaper article was published, the Nevada State Journal noted.

Sources

1988-1989

Tipped off by the contents of various lawsuits and complaints by employees, Nevada Gaming Control Board (NGCB) agents raided the Imperial Palace Hotel and Casino* on September 27, 1988. The 2,700-room property located on the Las Vegas Strip was owned by Ralph Engelstad, then age 58.

Shocking Cache Revealed

Inside the resort with the Asian motif, gaming investigators discovered a private space containing a multimillion-dollar horde of Nazi memorabilia. The room was 3,000 square feet in size, or about nine times the size of the average U.S. hotel room. The myriad of items in this “War Room” included:

• Murals depicting Adolph Hitler and Nazi staff members
• Daggers and swastikas
• A painting of Engelstad donning a Nazi uniform
• A life-sized portrait of Hitler signed, “To Ralphie from Adolph, 1939”

Engelstad’s classic car assortment housed elsewhere on the Imperial’s premises contained Hitler’s 1939 Großer Mercedes parade car, a six-wheeled Nazi-used car and a Heinrich Himmler-owned Mercedes-Benz.

NGCB members investigated further to determine whether or not to recommend the Nevada Gaming Commission (NGC) revoke Engelstad’s gambling license.

The agents interviewed numerous current and past employees and reviewed legal documents. They revealed that the work environment at the Imperial was one, allegedly, where discrimination against Jews took place in the form of Engelstad making anti-Semitic comments and calling people pejoratives.

Workers revealed that Engelstad had thrown two parties, one in 1986 and a second in 1988, to celebrate Hitler’s birthday (April 20). Some staff members reported having felt pressured to attend the fêtes held in the War Room, which featured a large swastika cake bearing Hitler’s name, German food and marching music, and bartenders wearing T-shirts that read, “Adolph Hitler European Tour 1939-45.” One employee of Jewish heritage recalled Engelstad allegedly egging him on to cut the cake.

The NGCB also was alerted to the existence of bumper stickers at the Imperial, bearing the words, “Hitler Was Right.” When agents searched for them in the hotel-casino on October 6, instead of locating the decals, they found a printing plate for manufacturing them along with a 1986 order for the same.

Owner’s Explanation

Two days later, Engelstad apologized publicly for having the collection, which was in “poor taste,” he said, and for throwing the “stupid and insensitive” parties (Las Vegas Strip History). He denounced Hitler, denied being a Nazi sympathizer and refuted being behind the making of the T-shirts and bumper stickers.

Various subsequent media reports noted Engelstad or his attorneys had given, at different times, these justifications for the parties:

• They were just theme parties to boost employee morale
• They were to honor the employees who helped assemble the “War Room”

They were merely “spoofs” to celebrate new purchases for his historic ensemble (Salon, March 8, 2001)

Negative Sentiment Mounts

Various Las Vegas groups and individuals expressed their displeasure with Engelstad.

Specifically, a representative from the Jewish Federation of Las Vegas responded, saying Engelstad’s mea culpa was insufficient and declared a boycott of the Imperial Palace.

From the viewpoint of the gaming authorities, Engelstad, with his blatant, seeming salute to the Nazi Regime and its anti-Semitic and racist views, at least, had disgraced the State of Nevada by embarrassing its casino industry. And that warranted punishment.

“The charge was honoring and glorifying Hitler,” said Gerald Cunningham, NGCB member. “It was an improper act” (The New York Times, April 3, 1989).

The Penal Phase

At the conclusion of the five-month inquiry, in February 1989, the NGC ordered Engelstad to pay $1.5 million (about $3 million today) — the second largest fine the agency had imposed on a casino operator as of that date** — and placed nine restrictions on his gambling license.

Nearly having been stripped of the same, the Imperial owner paid the full amount, removed the Nazi artifacts from the resort and vowed to refrain from holding further celebrations of Hitler.

Engelstad would go on to keep his gaming permit and own/operate the hotel-casino until his death in 2002.

————————–

* Before Ralph Engelstad debuted it as the Imperial Palace in 1979, the property had been the Flamingo Capri (3535 S. Las Vegas Boulevard). He’d purchased the dilapidated Flamingo Capri in 1971, spruced it up, added a casino and some buildings, and reopened it the following year. Today, a renovated version, the Linq hotel-casino and shopping promenade, stands in its place.

** The largest pre-1988 fine was $3 million levied in 1984 against the Stardust hotel-casino owners for skimming.

Sources