Nevada Rolls the Dice, Part I

Roulette in Rawhide saloon in Nevada, circa 1908. | Courtesy Nevada Historical Society

The Gold Rush opened the American West to multitudes of young, reckless men flocking to California, later followed by the draw of Nevada mining districts. Playing cards and throwing dice in saloons were often the only recreation lonely men had in a primitive and nearly lawless society. Due to an unprecedented population growth, in 1850 California was admitted to the Union as the 31st state and the state militia was replaced by a civilian police force. Nevada’s census count, however, lagged far behind the Golden State’s; the Silver State wouldn’t be admitted until 1864.

“And if I had my way in this Prohibition year, I as mayor of Reno would place a barrel of whiskey on every corner, with a dipper and a sign saying: ‘Help yourself, but don’t be a hog.’ ” — Reno Mayor Edwin E. Roberts

Miners working the dangerous Comstock Lode were risk takers, both in occupation and sport. They gambled in Virginia City, Nev., every night, playing poker, faro or other games of chance. They were joined by stagecoach drivers, teamsters and freighters. In 1861, Territorial Governor James Nye arrived by stage from Washington, D.C. He was far from impressed with what he observed happening in the saloons, saying, “Of all the seductive vices extant, I regard gambling as the worst.”

Read about William Sharon, King of the Comstock: Part I

Nye ordered a prohibition, but it had virtually no effect and business continued on as usual. Nevada first legalized gaming in 1869, when taxes and restrictions were placed on the popular activity. The new law permitted gambling, but banned it on the ground floor or front rooms of any licensed establishment. When the Silver State started earning revenue from legalized gaming, it became the first state to do so. Despite an undercurrent of uneasiness with the legislation, the much-needed money earned by taxes protected the industry.

By 1875, Nevada’s population was less than 53,000, with nearly 20,000 residents living in Virginia City. Further regulation in 1877 deemed it a crime for anyone “to win money from persons who have no right to gamble it away.” This naïve law was passed to prevent those legally in debt, married or with dependent children from gambling away the mortgage, but the legislation was unenforceable and no arrests were ever made.

When the Comstock silver ore ran out in the early 1880s, the collapse of the mining industry led to a 20-year financial depression: from 1881 to 1900. For two decades the economy stagnated, barely sustained by diversification into ranching and farming. But tenacious residents refused to let their home state die. Central Pacific Railroad towns such as Reno, Winnemucca and Elko built agricultural-based economies while small-time Las Vegas, also a railroad town, developed a cattle ranching industry. Despite hardscrabble efforts to hold together, the 1900 census revealed that Nevada’s total population had fallen to about 42,000 residents with only 3,673 stragglers left living in Virginia City.

Nevada’s natural wealth is not found in its desiccated landscape; greater resources are found in primordial geologic provinces buried deep below the surface. In 1900, prospector Jim Butler discovered a rock outcropping flecked with silver and Tonopah was born. His fortuitous find established the fabulously rich Goldfield Mining District, which revived the Silver State’s moribund economy.

From 1879 until 1909, licensed gambling was permitted in Nevada, although regulations governing the vice were “local, few and far between, and where they did exist were loosely enforced.” Under increasing political pressure from a growing and more diverse population, in 1910 the state legislature banned gaming of any sort. Gambling didn’t stop, but it did go underground. Two years later, the state liberalized the law to allow social games such as poker, whist and other card games, as long as bets were paid in cigars, drinks or items of nominal value. Although state law allowed limited betting on certain games, due to other restrictions these state-approved options enjoyed limited appeal and illegal gambling continued.

In 1919, Congress passed the 18th Amendment, which banned the production, sale or transport of alcohol. Drinking and possession of it was still legal, however, which inspired a national underground lifestyle centered around illicit speakeasies. The following year American women gained the right to vote, forcing previously taboo social issues such as abortion and divorce into the national spotlight. It was a time of rapid social change for all Americans.

By the 1920s, Nevada had gained a shady reputation for its liberal divorce policy and lax enforcement of state gaming and federal drinking laws. The Silver State already suffered accusations of non-conformity from prior legislation legalizing prize fighting and prostitution. Many Nevada residents came to believe that rather than turn a blind eye to the state’s non-enforcement of gaming infractions, it was time change the law.

A return to legal gambling made economic sense, but the new legislation ran into resistance from religious leaders, women’s organizations and other groups. However, the general public and businessmen intent on controlling and regulating an industry that already existed openly supported it. After 21 years when gaming was officially outlawed, on March 19, 1931, the Nevada Legislature passed the so-called “Wide Open Gambling Law.” Two months later, the state’s residence requirement for legal divorce was shortened to six weeks, the most liberal in the country, thus confirming the state’s national reputation for making money off of “sin taxes.”

The 1929 stock-market crash launched the Great Depression that crushed the life out of the American economy. Nevada was arguably better off than most states due to lucrative, federally funded dam projects on the Colorado River, as well as a mini-mining boom sustained by new refining technology that encouraged reworking the Comstock mines. The state’s liberal divorce and gambling legislation encouraged more out-of-state dollars. In the first week after passage of the 1931 open gambling law, about 5,000 Californians swarmed into Reno to place their bets. Legal gambling was well received by most Nevada communities, but businessmen and investors worried that if it exploded out of control the legislature would prohibit it again.

In 1933, statewide gambling revenues were only about $69,000, but Reno’s share from the gaming tax approached $50,000. When asked about the city’s reputation as a purveyor of immorality, Reno mayor Edwin E. Roberts stated, “You cannot legislate morals into people, any more than you can legislate love into the hearts of some professed Christians. You can’t stop gambling, so let’s put it out in the open. Divorce is the only solution when marriages are unhappy. And if I had my way in this Prohibition year, I as mayor of Reno would place a barrel of whiskey on every corner, with a dipper and a sign saying: ‘Help yourself, but don’t be a hog.’ ”

Stay tuned for Part II in the next edition or at TheTahoeWeekly.com; click on Explore Tahoe: History.