Elliot Paul Price

1970-1973

When federal agents arrested Elliot Paul Price, 51, during a massive multi-city raid in 1970 and charged him with illegally transmitting race wire information across state lines via telephone, two dominos fell:

• He lost his job as a casino host at Caesars Palace in Las Vegas.

• The Clark County Sheriff’s Office pulled his work card, which is required for casino employment.

In April 1971, however, the sheriff’s department issued him a temporary permit to work in a similar position at Circus Circus. Within the week, though, the Nevada Gaming Commission (NGC) voted to pull it due to his being under federal indictment and allegedly having an unsavory background. On the NGC’s orders, the sheriff’s office revoked his card, leaving Price again unemployed.

Price Won’t Take No

Unable to obtain a casino job, he filed a lawsuit, but it went nowhere because, according to the judge, he hadn’t pursued all possible avenues for re-obtaining his employment permit.

Price asked the NGC and the Nevada Gaming Control Board (NGCB) to reinstate it, but they didn’t. This was because, in a hearing on the issue, he refused to answer questions about his suspected association with underworld individuals. Price hailed from Boston and gambling regulators believed he was entrenched in the Mafia there.

Lawsuit, Take Two

At the start of 1972, with Oscar Goodman as his attorney, Price sued Nevada Governor Mike O’Callaghan and the NGC, claiming the latter had rescinded his work card arbitrarily. The suit purported the agency’s decision hadn’t been based on established guidelines but, rather, on unrelated “charts of the Mafia, ancient newspaper articles, dime store novels, and secret and confidential information” (Nevada State Journal, June 13, 1972). It also asserted the NGCB hearings had violated his freedom of association right and forced him to be a witness against himself.

Goodman requested the withdrawal of Price’s work card be deemed unconstitutional and a temporary restraining order (TRO) be placed against the gambling regulating agencies, preventing them from interfering with his obtaining a new one.

The state, on the other hand, argued that were the court to afford the TRO until the issue got resolved legally, it would be substituting its judgment for that of Nevada in a state administrative matter. Also, were Price to prevail, it “could well emasculate the total regulatory concept of gaming” (Reno Evening Gazette, June 13, 1972).

District Court Judge Howard Babcock granted Price the TRO.

Nevada Fights Back

The NGCB responded with a suit of its own to overturn Babcock’s action on the grounds that the local court lacked jurisdiction in the matter. The NGC and NGCB conceded Price could work in a non-casino job at Las Vegas’ Riviera hotel.

District Court Judge Carl Christensen denied the State of Nevada’s motion to dissolve the TRO. This meant Price could return to his casino host post at Circus Circus until the high court weighed in.

Off To Higher Court Land

Next, Goodman took the case to the Nevada Supreme Court, asking it to allow Price to regain his work card, thereby protecting his constitutional right to due process.

Deputy Attorney General David Polley, for the state, argued that upholding Babcock’s ruling would “set a dangerous precedent which would be detrimental to the inhabitants of Nevada and their major industry” (Nevada State Journal, June 13, 1972).

Resolution Three Years Later

In 1973 the Nevada Supreme Court delivered the opinion that, yes, the lower, or district, court had jurisdiction to rule upon the validity of Price’s right to work in gaming.

In other words, Goodman and Price* won the legal fight. Their doing so established that Nevada couldn’t deprive someone of their work card without due process. Subsequently, Clark County instituted processes for suspending or revoking a work identification card and for an appeal by the card holder.

—————————–

* In 1979, Price would be indicted for multistate race fixing along with other members of Boston’s Winter Hill Gang, James “Whitey” Bulger’s associates, for which he would serve two months. Subsequently, he would disappear, never to be heard from again.

Sources

Japanese police emblem

1974-1975

For many Japan-based businessmen, gambling trips to Caesars Palace in Las Vegas, Nevada turned nightmarish.

Kikumaru Okuda, 46, also a resident of the Land of the Rising Sun, and a film producer with Toho Film Company, organized numerous trips on behalf of the Nevada hotel-casino, at the request of its president, Harry Wald. Caesars Palace paid Okuda, who’d met all of Nevada’s requirements for junketeers, $3,000 ($15,000 today) a month for his services.

The agreement with junket guests, which was typical, was that the resort would pay their airfare and hotel bills in exchange for them gambling a certain number of games while in Sin City. If they won, the casino would pay them in U.S. dollars on site. If they lost, the guests would pay in yen what they owed after returning to Japan.

Illegal Collections

In the case of a 32-year-old, Yokohama dry goods dealer, upon his return home, Okuda told him he owed $93,000 (about $455,000 today) and demanded payment. (It’s likely the man hadn’t known the size of his marker or how fast it had grown when he was in Vegas.) He refused to pay.

Soon after, Okuda’s partners —Yoshihisa Kuroda, 45, and Manabu Nakajima, 40, both corporate executives — told the debtor they had Mafia and Yakuza (Japanese organized crime members) associates who’d “liquidate” him if he didn’t pay immediately (Las Vegas Sun, July 17, 1975). He gave them $18,000 (probably all he could at the time) then reported the incident to police. (Such extortion by junketeers is why the state of Nevada, in 1972, had augmented its regulations concerning junkets.)

Consequently, in 1975, members of the Tokyo Metropolitan Police Department (MPD) investigated possible links between organized crime and gambling junkets to Las Vegas.

“In general, the situation occurred at about the same time as the movie, The Godfather, was being run in Japan, and from the point of view of the Japanese the entire affair appeared to have been engineered by organized crime interests,” wrote Jerome Skolnick in House of Cards.

Police discovered other victims, including:

• A golf course proprietor who was forced to repay $670,000 ($3.3 million today)
• A nightclub owner who had to come up with $100,000 ($490,000)
• A Tokyo jeweler who’d lost $50,000 and paid about $10,000 ($49,000)

They learned Okuda had begun the junket enterprise in January of 1974 and since then, had taken to Las Vegas 85 men, whose gambling losses had totaled $83 million ($407 million today)! Okuda had collected about $600,000 ($3 million today), two-thirds of which he’d sent to the casino through a U.S. attorney living in Japan.

The MPD arrested Okuda, Kuroda and Nakajima on charges of extorting millions of yen from Japanese citizens.

Nothing Doing

Nevada Gaming Control Board (NGCB) agents also looked into the allegation, in the United States and in Japan. When they questioned Wald, he said he was clueless as to the intimidation tactics Okuda had been using. Further, he claimed Okuda had offered to take over junket debt collection, but Okuda asserted Wald had asked him to do it. (Caesars Palace already had been in the NGCB’s crosshairs over junkets in 1969.)

When overseas, Japanese police prevented NGCB agents from reviewing any and all related documents, saying they were being held as evidence for the trio’s upcoming trial.

Back home, Nevada gambling regulators noted that opposition to and a major media campaign against gambling and junkets was growing in Japan and said the climate there toward the U.S. industry was “economically and emotionally bad” (Reno Evening Gazette, Aug. 19, 1975). Silver State officials were displeased with the circumstances surrounding the junkets from Japan and the resulting strained relations with the country.

As for Okuda, the Tokyo MPD arrested him a second-time in 1975 on different junket-related charges, but what ultimately happened to him, his henchmen and Caesars Palace — if anything — is unknown.

Sources

Art from Wikimedia Commons: by Mononomic

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.

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

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

New Star (restaurant, casino, bar), Winnemucca, Nevada, 1960s

1958

Casino workers at the New Star allegedly were caught in flagrante delicto.

In April, a gambling detective — Michael MacDougall from New York — conducted a statewide, in-person survey of various gambling entities upon the request of Robbins Cahill, head of the Nevada Tax Commission, the state’s gambling regulatory agency at the time.

MacDougall spotted dealers cheating during games of 21 (blackjack) on two different days at the Winnemucca gambling house. In May, Fred Galster, an agent for the Nevada Gaming Control Board (NGCB), which investigated all cheating complaints, played the game at New Star for hours, and he, too, noticed the same deceitful activity.  

Array Of Infractions

The two witnesses observed the dealers employing the following cheating methods

• dealing seconds = dealing the second card in the deck

• turning the deck = turning a card over and dealing from the deck bottom

• one hand bottom = taking a card from the deck bottom to give the dealer 21

• copping the cut = picking up the cards in the same way they’re cut

• hi-low stack = picking up discards in such an order that the dealer gets two high cards and the player gets one high and one low card

• dealer’s stack = picking up discards in such an order that the dealer gets 21

• bubble peeking = bending the top card slightly to glance at it

• bridge = bending a card so players unconsciously cut at that card

• false shuffle = passing cards through a shuffle without rearranging their position

During the 1950s, Nevada gaming authorities cracked down on cheaters, typically revoking the gambling licenses of the casino operators, thereby closing their establishments for a year.

This was to portray to outsiders, federal lawmakers in particular, that the industry in The Silver State was honest and clean. One might argue they were extra vigilant during 1958 because Robert F. Kennedy was working diligently and blatantly to eradicate racketeering throughout the U.S., and gaming was an obvious place to root out such underworld activity.

Defense Offered

The NGCB ordered New Star casino’s operators — Brent Mackie and Kenneth Henton — to appear at a hearing to show cause why their gambling license should be maintained.

At the proceeding — during which MacDougall, Galster and numerous other people testified — New Star’s defense attorney, Thomas Foley of Las Vegas, denied his clients were guilty and asserted the NGCB had failed to prove the cheating charges. The primary defense was that MacDougall’s findings weren’t credible and, therefore, he wasn’t either. Foley argued MacDougall  had:

• Identified one of the allegedly cheating dealers by physical description but that man hadn’t worked then

• Testified that a certain allegedly cheating dealer was right-handed when in fact the dealer at the time was left-handed

Despite the discrepancies, though, the tax commission pulled Mackie and Henton’s gambling license in July, closing New Star’s casino.

But this isn’t the story’s end. Check back next Wednesday for the finale.

Sources

Cactus Pete’s casino in Jackpot, Nevada in 1960

1960

When one rural Nevada town grew into a gambling hot spot in the mid-1900s, the gamblers in another loudly grumbled.

Soon after Idaho outlawed slot machines, its last vestige of legal gambling, the sagebrush- and broomgrass-covered land 47 miles south of Twin Falls, just across the border, began to evolve into a small community — Jackpot. It grew to consist of about 125 trailers (no houses), two motels, a grocery store and a beauty shop.

Development started in 1954 with the debut of the Horshu Club. The 93, Cactus Pete’s, Tex’s Gateway and Diamond Jim’s then followed. Together, these casinos offered 320 slot machines, four pits of 21, roulette and dice tables, keno and wheels of fortune along with free meals and stage entertainment.

By 1960, the town’s five gambling houses drew thousands of players per year,* many from nearby Idaho Falls. To capitalize on that city’s pool of players, Jackpot’s gamblers provided free nightly, round-trip transportation by bus.

Gamblers Protest About, Well, Other Gamblers

Rival casino owners in Elko, which officially became a city in 1917, claimed the Jackpot clubs were exploiting Twin Falls’ economy. They predicted law enforcement and public service problems would arise in Jackpot and warned the end result would be Twin Falls business owners lobbying for a federal gambling ban.

“Frankly, the Elko gamblers don’t like the competition — they are 115 miles farther from the Idaho line,” wrote the Oakland Tribune (Nov. 13, 1960).

The state’s gaming regulators noted the complaints and thought they might be valid in part. They wondered if casinos in the rural border regions might harm the industry overall, particularly because those places were difficult for them to oversee and because of the payoff scandal involving a gambling watchdog in the rural town of Wells that had occurred earlier in the decade.

The Nevada Gaming Control Board launched an investigation, and in November 1960, conducted a survey of Twin Falls residents about their attitude toward gambling in Jackpot. It revealed that 18 percent favored it, 30 percent opposed it and 53 percent were neutral.

Were Nevada’s gaming agencies to forbid gambling in Jackpot, it would set a dangerous precedent, said the attorney for the community, Leo Puccinelli.

“Nevada gambling was built by competition and it will be in trouble if the established clubs can win monopolies with legislation,” he added. “After all, the major part of Nevada gambling is on a border basis. Only Elko is in central Nevada, while Reno and Lake Tahoe cater to Northern California and Las Vegas to Southern California” (Oakland Tribune, Sept. 16, 1960).

Jackpot’s gamblers remained mum on the issue, hoping it would go away … which eventually it did, leaving them to continue running their casinos without impediment by the state.

*Total gaming revenue from Elko County, including Elko and Jackpot, then was between $4 and $5 million ($32.5 and $40.7 million today) per year.

Sources

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

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.

Sources

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