Headline, Nevada State Journal, January 26, 1939

1937-1939

A ticket would cost $1 (about $17 today). A drawing would be held at least every 90 days, maybe monthly if demand was great enough, on the last Saturday night of the month. It would alternate between all Nevada towns, starting with Reno, then Las Vegas.

This was the proposal for a Nevada lottery made by Senator William A. Marsh (D-Nye County) and Assemblyman Patrick Cline (D-Clark County) in 1937, at a time when the state constitution prohibited this game of chance but allowed numerous others. The first such attempt to institute this gambling type, which had failed, had been in 1888 when “state finances were in a parlous* condition” (Reno Evening Gazette, Nov. 22, 1928).

“We are living in a liberal state where we do not presume to be our brother’s keeper, and that is as it should be. We believe that if anyone wants to gamble a dollar on a lottery ticket and stand a chance of winning from $150,000 ($2.5 million today) down to $1,000 (about $17,000 today), he should be able to buy that ticket from the state of Nevada,” Marsh and Cline said in a joint statement.

They added that Americans spend $250 million ($4.2 billion today) each year on lottery/ sweepstakes tickets, and that money was going to Ireland, Mexico and Canada rather than staying at home.

Big, Big Picture

The duo estimated with the new scheme that ultimately $1 million worth of Nevada tickets ($16.8 million today) would be purchased per month, 90 percent of them by out-of-staters despite sales being limited to within The Silver State’s borders. After expenses, the net monthly profit would be $450,000 ($7.5 million today), which would be distributed as follows with the ultimate goal of eliminating property taxes:

• To reducing property taxes, $325,000 ($5.5 million today)
• To the state’s school fund, $50,000 ($838,000 today)
• To a pension plan for seniors, $50,000
• To building and maintaining a hospital for children with disabilities, $50,000
• To the University of Nevada, $25,000 ($419,000 today)

Winnings would be dispersed this way:

• First prize, $150,000 ($2.5 million today)
• Second prize, $75,000 ($1.3 million today)
• Third prize, $60,000 ($1 million today)
• Ten prizes, each $10,000 ($168,000 today)
• Ten prizes, each $5,000 ($83,000 today)
• Twenty-five prizes, each $1,000 ($17,000 today)

The proposal also included the establishment of a lottery commission comprised of three legislature-appointed, nonpartisan men who’d administer the game according to the law, answering to the state controller and treasurer only.

Opposing Views

Several individuals publicly criticized the idea and vowed to fight it. Here are their arguments:

• Slippery Slope: If petitions are circulated to legalize a state lottery by an amendment to the constitution, a similar move will be started against all forms of gambling, Rev. Brewster Adams of the Baptist Church said.

• Goes Too Far: “While this state is liberal, there is a limit to liberality and nothing destroys tolerance as much as abuse, which this proposal certainly is,” said Mrs. Clara Angell, president of the Reno chapter of the Women’s Christian Temperance Union (Nevada State Journal, Jan. 7, 1937).

• Negative Publicity: “It would be a sad reflection on the state of Nevada if we were not able to raise enough money to run the state,” said Robert M. Price, Reno attorney. “The government of Nevada is doing very well with the present taxes and it would be poor advertising to let other states think that we need to resort to gambling.”

• Morally Wrong: Gambling is the hardest vice to eliminate, said Reverend William Moll Case. “The proposal is foolish.”

Looking Good

The Assembly voted against the resolution to amend the constitution to permit operation of a state lottery. The Senate, however, did the opposite and then returned the bill to its counterpart for reconsideration. On its subsequent vote, the lower house passed it by a single aye.

This, however, was only the first step. To create a lottery, state lawmakers would have to pass the bill in the next legislative session (1939), and then Nevadans would have to vote to approve it.

Final Curtain

When 1939 rolled around, Cline no longer was in office, and Marsh had passed away the year before.

Again, the Nevada Senate passed the bill. The Assembly returned it to the Senate in error, but the latter again voted in favor of it. Then the Assembly refused to consider it, thereby killing it during the last week the lawmakers convened.

The local media outlets offered little explanation for the Assembly’s non-action other than reporting the lottery plan had been called “immoral and illegal” (Nevada State Journal, March 19, 1939).

The question of legality was a legitimate one, on both federal, state and public policy levels, according to then U.S. District Attorney William S. Boyle. Boyle believed tickets would have to be sold in other states for it to produce significant revenue for Nevada. Because U.S. government law forbade all interstate transportation of lottery materials and because most states at the time had their own anti-lottery laws, tickets couldn’t be sold outside of The Silver State without conflicting with those.

A second problem was within Nevada. Although the state had legalized gambling in 1931, public policy remained opposed to it, as evidenced by the courts’ refusal to hear any case involving gambling debts. Thus, no lawsuit involving a lottery payout would be allowed in The Silver State. The federal courts wouldn’t be an option either due to the above-mentioned regulations, Title 18, Sections 1301 and 1302 of the U.S. Code.

The idea of a Nevada lottery remained dead for 36 years, until lawmakers introduced two new bills in 1975 that revived the idea, which, again, didn’t pass. The state still doesn’t have a lottery today.

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* Parlous = perilous, dangerous

Sources

1937

The Great American Football Pool (GAFP) of 1937 was to be of massive scale and the first of its kind in the U.S.

The organizers aimed to sell 3 million tickets at $1 apiece and award sizable prizes: $100,000 to the first place winner, $50,000 to the second and $25,000 to the third in addition to 2,100 other weekly awards totaling $424,500.

And similar to the popular Irish Sweepstakes, which many Americans participated in, a percentage of the proceeds — 10 percent, or $300,000 in this case — would go toward building a children’s hospital in Reno, Nevada.

“Americans generally, however, associate the Irish Sweeps with charity, never with rackets, and until recently the great lottery has run without a single sharp glance being cast in its direction,” wrote Fred J. Cook in A Two-Dollar Bet Means Murder. “It is made to appear that the huge Irish Sweepstakes pot is divided 75 percent in cash prizes returned to the winners, 25 percent to the hospitals in Ireland.”

For the GAFP, San Francisco, California resident, Charles Warren, formed a Nevada corporation, obtained the requisite gaming license and opened a Reno office, where all operations had to be carried out to be legal.

“We will not have any solicitors in any other city and positively will not use the federal mails in any way. We believe, and so do leading lawyers in Reno, San Francisco and Los Angeles, that there is nothing illegal about the pool,” Warren told the Nevada State Journal (June 17, 1937), emphasizing that it was not a lottery or sweepstakes, which are illegal under state and national laws.

In terms of how the pool was to work, participants would select a number with each ticket they purchased. That figure was their guesstimate of this: the total points to be scored by 40 specified U.S. college football teams throughout the upcoming season multiplied by the total number of games all teams cumulatively would play.

The first place prize would go to the ticket holder who guessed the correct number. Second, third and subsequent awards would go to the individuals with the next closest guesses.

Not In The Business Plan

GAFP ticket sales started in September. Within two weeks, bunco squad police in San Francisco, California arrested Warren, two employees and three promoters of the pool, one of whom, Jack Ferdinand Van, police said was the operation’s mastermind. They were charged with theft conspiracy for selling tickets outside of Nevada. Officers said the football pool was being operated as a lottery and was arranged such that it would be impossible for anyone to win the first prize.

These arrests led to an investigation in Reno, in which it was discovered GAFP Inc. had sent tickets via car to sales representatives in San Francisco, Chicago, Atlanta and Van Horn (Texas) and tickets had been sold in nearly every state. Also, GAFP Inc. hadn’t secured any property for the hospital.

In early October, sheriff’s deputies raided the GAFP’s Reno office, seizing ticket books and pool promotional literature and advertisements. They arrested the three employees present — the Reno manager/secretary-treasurer, the publicity agent and the accountant — for violating Nevada’s anti-lottery law. Authorities closed the office and revoked the corporation’s gaming license.

During the trial for the three men arrested in Reno, the state contended that the football pool was a lottery scheme. The defense claimed it wasn’t and had been approved by the city and county authorities when they granted licenses. The jury acquitted the three defendants.

Meanwhile, a San Francisco grand jury indicted six men on two charges each: conspiracy to violate the California lottery law and conspiracy to commit grand theft in operating the GAFP. These individuals included Van, three promoters and two employees. Interestingly, Warren, the president, wasn’t among them. All six pleaded innocent when indicted.

Their trial took place in March of 1938. One witness testified ticket sales proceeds were to be split this way: 10 percent ($300,000) for the hospital, 23 1/3 percent ($699,900) for prizes, 33 1/3 ($999,900) percent for ticket sales commissions and the other third ($999,000) for GAFP Inc.

The jury found the two employees not guilty but convicted the remaining four. Of them, the judge sentenced Van, the pool leader, to a two-year prison term in San Quentin State Prison in light of his previous record. The three promoters were placed on probation.

The Great American Football pool turned out to be not so great.

Sources