Nevada became “the” gambling state by a series of historical accidents as well as by deliberate policies. As late as the 1840s, Nevada was basically an unexplored region of barren desert and mountains. Paiute, Washoe, and Shoshone Indian tribes had traversed parts of the state and established some communities, but their numbers were small, and their lifestyle was often nomadic, as they would live in the climatically comfortable mountains during the summer and then descend to the desert floor in winter months. The climate and terrain made the area one that most people moving westward sought to avoid or to cross in great haste. Mark Twain described the journey with humorous detail in Roughing It (Twain 1872).
One critical aspect of Nevada’s geography that is pertinent to its economic development is its proximity to California. The two states have the longest land border of any two states in the United States. People rushed to California in the late 1840s as gold was discovered. The new state of California was populated by all sorts of prospectors and other independent get-rich-quick entrepreneurs during the 1850s. The area that became Nevada was made part of Utah Territory in 1850. The volume of gold strikes in California began to wane in the late 1850s just as the great Comstock Lode was discovered near Virginia City, Nevada, in 1859. A mad silver rush paralleled the earlier California gold rush, except this time the fortune hunters came to Nevada from California. The first waves of population left an indelible mark upon the character and outlook of politics in the state. The influx of the new population was accompanied by desires to cut off political relationships with Utah Territory and its religiously oriented government. President Buchanan signed a bill on 2 March 1861, just two days before he left office, which established Nevada Territory out of the western one-third of Utah Territory. Buchanan had been rather hostile to the nature of Utah society throughout his presidency, and the new status for Nevada was his parting shot against a community that seemed almost diametrically opposite to that found in Nevada.
Slot machines are found throughout the state in bars, taverns, restaurants, convenience stores, and grocery stores.
The issue of gambling was quickly placed on the public agenda of the new state. President Lincoln appointed New Yorker James Nye to be territorial governor. Nye was not a prospector, and Nye did not care for gambling. He recoiled at the prevalence of sin institutions when he settled down in Nevada and persuaded the new legislature to prohibit gambling. A person who operated a game could be charged with a felony; a person who played at a game could be charged with a misdemeanor. In spite of the law, the games continued.
After statehood was achieved in 1864, the legislature reversed its thinking. In the 1867 session a law was passed legalizing casino games. It was vetoed by the first elected governor, H. G. Blasdel. Two years later, the legislature repeated its action, and when the bill was vetoed again, they overrode the veto. The new law barred local governments from passing ordinances against gambling. Any person was able to get a license to operate a game from the county sheriff for a fee ranging from $1,000 to $1,600 (depending upon the population of the county). The fee was split equally between the state and county treasuries.
By the turn of the twentieth century, the Populist movement was gaining strength across the United States and in the Silver State. In concert with temperance organizations, civil leaders attacked the local sin industries. A ballot initiative sponsored by such groups sought to make both gaming and prostitution illegal in Reno. When the voters turned down the measure in 1909, the sponsors approached the state legislature. There they were successful, and gaming ceased to be legal on 30 September 1910. Another way of saying the same thing was that illegal gambling began on 1 October 1910.
By 1911, the legislature had second (and third) thoughts. Certain card games were legalized, only to be made illegal again in 1913. In 1915 limited gaming was permitted again. Enforcement of the gaming limits was sporadic at best and nonexistent as a rule. In lieu of fees when gaming was legal, operators now paid bribes to local officials, who pretended that gaming did not take place.
A move to legalize gambling was revived in 1931 when state assemblyman Phil Tobin of Humboldt County introduced the legislative measure. Although opposition was voiced by religious groups, Tobin’s bill passed the assembly on a 24–11 vote, and the state senate on a 13–3 vote. On 19 March 1931, Governor Balzar signed both the six-week divorce law and the measure to legalize casino gambling. A second law passed later in 1931 permitted local governments to regulate gambling and fixed fees for gaming statewide. The fees were shared, with 75 percent going to local governments and 25 percent to the state. Licenses were granted by county commissions, and all regulations were enforced by the sheriffs.
In 1945, the state legislature decided that state control was necessary, as several outside operators were planning larger and larger casino projects. The state Tax Commission was given the authority to license casinos, which had previously received licenses from county boards. Subsequently the process became one of dual licensing. The state also imposed a 1 percent tax on the gross gaming wins of the casinos. The Tax Commission was empowered to collect the tax. Two years later the state attorney general ruled that the Tax Commission could deny a license based upon its assessment of the character of the applicant. In 1949 the requirement that applicants must be of good character was written into the law. The Tax Commission was given a staff for casino regulation for the first time.
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