Nevada gaming turns 90 By David Schwartz, CDC Gaming Reports March 18, 2021 at 9:30 pm Today marks the anniversary of what might be the most consequential event in American gambling history: the relegalization of commercial gaming in Nevada in 1931. Without Nevada rolling the dice in 1931, it’s likely that gambling in the United States — and the rest of the world — would look very different today. When Governor Fred Balzar signed Assembly Bill 98 into law on March 19, 1931, he inaugurated the second regime of legal commercial gambling in the Nevada. “Wide-open” commercial gambling had first been legalized in 1869. At that time, the legal status of gambling in much of the American West was ambiguous — it wasn’t outlawed in Arizona or New Mexico territories, while California was in the process of enacting progressively more stringent anti-gaming laws. Gambling held on for longer in Nevada than in California, Arizona, or New Mexico, but in 1909, the state legislature criminalized commercial (although not social) gaming. Nevada’s ban on gambling was never truly effective; social gambling remained legal and those who wished to run higher-stakes games reached understandings with the local authorities. Still, keeping commercial games under wraps benefited the state’s leaders, who could take pride in having abandoned an element of Nevada’s “barbaric” past and, presumably, the local authorities, who found that looking the other way could be lucrative. It wasn’t until the Great Depression sapped Nevada’s economic vitality that relegalizing commercial gambling became politically viable. In early 1931, Southern Nevada was getting flush with the construction of Hoover Dam, while Northern Nevada, at the time the state’s richest and most populous section, remained moribund. The bill to legalize commercial gaming, along with a parallel measure that lowered the residency requirement for no-fault divorces to six weeks, were seen as boons primarily to Reno. Of course, we now know that legalizing gaming benefited Las Vegas, although initially the center of gravity remained in Reno. Not until the growth of casino resorts on the Las Vegas Strip — haltingly in the 1940s, but with an atomic explosiveness in the 1950s — did the south pull ahead. Casino-resorts grew outside of Las Vegas city limits due to three main factors: proximity to Los Angeles, whose growing population, wealth, and cultural capital lifted the tide of its desert satellite; substantial investments in transportation infrastructure, from interstate highways to widespread air travel; and surrounding prohibition. Las Vegas emerged in the 1960s as the nation’s undisputed gambling capital, after its resorts had the time and nourishment to grow in their desert hothouse. Casino-resorts proved that they could draw visitors, create jobs, and generate tax revenue, which from the 1970s onward sold an increasing number of American jurisdictions on them. But what if Nevada had not re-legalized commercial gaming in 1931? We’ll assume that a similar measure didn’t pass in future legislative sessions, to avoid the inevitable “they would have legalized it in 1933” answer. The casino-resort was a unique adaptation to conditions in Southern Nevada, which privileged the sprawling, integrated resorts over urban gambling halls. So it’s reasonable to imagine that, with the Las Vegas Strip never coming into existence, integrated casino-resorts never develop, at least as we know them. American casino-style gambling remains confined to nightclub backrooms, taverns, and other semi-clandestine locales. No legal Nevada gaming industry means that Estes Kefauver and his anti-gambling Congressional allies might be successful in passing a 10 percent excise tax on all non-racetrack gambling (in our timeline, Nevada’s delegation limited the measure to sports betting only), which would effectively prevent any other states from legalizing casino gambling or lotteries, at least until they could get the excise tax repealed or diminished (as Nevada’s Howard Cannon did for sports wagering in 1974, paving the way for Las Vegas casinos to re-enter the space). Let’s say that some other senator from a state with a thriving illegal gambling scene — Arkansas, Kentucky, and New Jersey are good candidates thanks to Hot Springs, Covington, and Atlantic City —introduces a similar bill in the 1960s or 1970s, opening the door for casinos. They still won’t look anything like the casinos we know today, since the Las Vegas Strip won’t be a model. Rather than tying gambling to vacation tourism as the Strip resorts did, gambling interests would likely propose something more along the lines of Nevada’s 1931 re-legalization: legitimizing small gambling houses. Without the Strip to draw on, for example, New Jersey legislators wouldn’t mandate an attached 500-room hotel as a necessity for licensure. Instead, we can see towns like Atlantic City licensing standalone gambling operators, perhaps insisting that the clubs offer live music as a sop to the musicians’ union. Slot machines would still exist in this alternate history, although they wouldn’t be linked with casinos. Assuming they are excluded from the 10 percent excise tax, they survive as penny-ante “entertainment” devices, remaining more closely linked to pinball and later video-game arcades or as ancillary income generators in bars, drug stores, and pizzerias. Fifty years on, with entrenched interests in hospitality and gaming, there’s no reason to imagine that integrated casino resorts as we know them ever develop in the United States. We can imagine local hotel and restaurant owners being thankful for the additional traffic gambling brings, but leery of getting into the business themselves or allowing gambling clubs to build their own facilities. Without the need to build multi-million-dollar (and later multi-billion-dollar) resorts, it’s possible that the gaming industry, such as it is, never needs to court Wall Street and mainstream lenders. Possibly it remains highly local, with no national operators emerging. Tribal gaming, which began with high-stakes bingo, likely develops on schedule, but without the Strip model of destination resorts, it would look very different. Ironically, gambling operators in this non-Nevada timeline might be better suited to meet the current challenges of remote gambling than those in our timeline, where gaming is dominated by companies that have invested substantially in hospitality facilities. Whatever would have actually happened in a world where Nevada doesn’t become America’s casino model, thinking about the possibilities is a valuable exercise, as it lets us see where the industry might grow in the future. And as you can see, thinking about what might have been makes us appreciate even more what did happen in our own history.