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An Analysis of Gaming News and Trends by Ken Adams
First Quarter 2026
| | Ninety-five years ago, a door opened | | |
On March 19, 1931, Nevada lawmakers voted to legalize casino gambling. That year was not the best of times for the economy. The world was in the midst of the Great Depression and America had a prohibition on the sale of alcohol. Unemployment was at an all-time high, the middle of the country was in a severe drought, and the land was blowing away in a dust cloud. Farmers packed up their families and headed for California. In Nevada, the two major industries, ranching and mining, were in decline.
Though geographically large, Nevada’s population was tiny, with less than 100,000 inhabitants; the prospects for the citizens and for the state were not bright. The people needed jobs and the state needed taxes. Nevada had to attract visitors and cash from out of state and the predominately desert landscape was not much help.
In what might have been termed an act of desperation, the state legislature passed laws allowing for quick divorces and the legalization of gambling. In 1931, divorce was difficult to obtain in this country. In general, one party had to prove the other committed adultery or some other egregious crime, murder, for example. Nevada expanded the grounds for divorce, including mental cruelty, with a very low burden of proof, and lowered the residency requirement to a scandalous six weeks. The new law attracted the well-to-do, those who could afford to stay in Nevada for a month and a half to obtain their freedom. The law created an entire industry catering to those wishing to break the bonds of matrimony.
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The divorce trade took off immediately. Hotels, guest houses, motels, dude ranches, attorneys, and courts sprung up to handle the divorcees. Reno, a city with less than 20,000 people, had 100 divorce attorneys. The industry flourished in both Reno and Las Vegas, but Reno was king of the hill. In the 1930s, it is estimated that over 30,000 divorces were granted in the courthouse near the Truckee River. Reno was the divorce capital of Nevada, the nation, and the world; the city’s economy thrived.
Stories of rich and famous women going to Reno for the “cure” were common. Any time the likes of Tallulah Bankhead, Pearl Buck, Princess Oblonesky, Clare Boothe Luce, Marguerit Sykes Chrysler, Dorthea Lange, Mary Rockefeller, and Carole Lombard visited Reno to dissolve a marriage, the national press was on hand to cover the story. The tales became books and movies. As many as 20 movies about getting a divorce in Reno were made between 1935 and 1946. The notoriety established Reno as a national destination. The industry peaked before World War II. After the war, people still went to Nevada to get a divorce, just fewer of them. And getting a divorce in Reno was no longer headline material.
While Reno was basking in the warm sunshine of divorce, Las Vegas got help from the federal government. In 1931, the government began construction on Hoover Dam. It took five years to complete and required 5,000 workers to build. Construction of Hoover Dam pumped $50 million into the local economy, the equivalent of $800 million today. The workers lived in Boulder City, but partied in Las Vegas. They were glad to make the 28-mile trip and Las Vegas was glad to receive them. Between the economic boost of Hoover Dam and the divorce industry, Nevada limped through the Great Depression better off than most states. The Second World War was a game changer for the economy.
The post-war time was completely unlike the Depression era. The early 20th century was characterized by rural life, horse driven and without electricity, and urban life crowded with tenements and long unemployment lines; both were gone. By the 1950s it seemed that everyone had a job, a house, new electric appliances, and a white picket fence. In the driveway, a car stood ready to take the family to the retail malls popping up everywhere and on family vacations. Cars created new industries serving the traveling public. Tourism grew year after year, driving local economies.
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Nevada was one of the places that benefited from tourism. Tourists crossing the country passed through Reno, stopping for a night, a meal, and possibly a wager or two. Los Angeles and San Diego residents easily visited Las Vegas. The casino industry was in its infancy and gambling had a different trajectory than divorce. It could not really be called an industry until after the Second World War. Although casino gaming had grown consistently since 1931, it was still just a local affair. Of course, the casinos welcomed divorcees and travelers on the transcontinental highway taking a break, but nothing special was built for either.
After the war, that changed. The Flamingo, Desert Inn, Sahara, Sands Showboat, Riviera, and Royal Nevada opened on the Strip; the Fremont and Horseshoe downtown opened in the 1950s. In Reno, Harold’s Club and Harrah’s expanded to meet the demand. To take advantage of legal gambling and a growing travel industry, operators flocked to Nevada, abandoning former hubs of illegal gambling. Tired of being hassled by local police, the gamblers found a safe haven in Nevada.
Bill Harrah left California during the Depression and took his bingo game to Reno. After the war, Harrah saw not just a way to ply his gambling trade, but an environment to build a resort. He wanted something much more than a place to gamble. And the post-war economy demanded more. Like Harrah, other gamblers came from Arkansas, Texas, Idaho, Montana, and Ohio. In another wave, mobsters came from New York City, Chicago, Kansas City, and Detroit. With few exceptions, the mob settled on Las Vegas as a base of operations.
The presence of organized crime gave Las Vegas an advantage over Reno: money. In the 1930s and ‘40s, the largest expense for a casino was the bankroll. The location, the building, even the games were not terribly important or expensive. But in the new America, the wide roads, cars with fins, drive-in restaurants, and motor lodges, location did matter. Travelers wanted easy access from the highway and a place to park. The building and the fixtures also mattered, as everything needed to be new and attractive to the travelers. Casinos had to offer more than slot machines and blackjack tables. The new era demanded restaurants, hotel rooms, and entertainment. The bankroll became insignificant compared to the cost of the amenities. The old-time gamblers had the dice, cards, and a bankroll in their pockets. If those pockets did not contain the millions of dollars needed to build a modern entertainment center, the gangsters could borrow it.
The Strip began to expand, driven by four forces: a large population within driving distance, cheap available land, access to financing, and the preferences of the new, middle-class, traveling public. The catalyst for the Strip and the mob was the Flamingo. Others followed, but none as colorful as the legend-making Bugsy Siegel. Siegel set the tone with his flamboyant style and resort. Nearly every dreamer/developer who came after attempted what Bugsy tried. Each wanted to build the biggest, most expensive, and dazzling resort yet. Las Vegas kept growing, the Strip expanding with a stream of new properties. The Teamsters and mob funded the building boom until Howard Hughes came to town.
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Over Thanksgiving weekend in 1966, Howard Hughes’s reservation at the Desert Inn on the Strip expired. He wanted to stay longer and the hotel wanted him to leave. So he bought the joint, paying $13.2 million. Over time, he bought five more hotel-casinos. It was a turning point for Nevada and gaming regulation. Hughes brought corporate America and conventional financing to Nevada. Howard Hughes led a strange life, but his business reputation was impeccable. Getting a casino license took some extraordinary measures, but Nevada made the effort. One governor conducted an interview over the phone; another flew to London to speak to him. Nevada wanted Hughes as a licensee and it wanted the mob and Teamsters out of Las Vegas. Hughes was not a permanent solution for Nevada, but it worked for a time. Due to his presence and influence, the state passed legislation allowing for a public company to be licensed. Without public financing, the Las Vegas Strip of today would have been impossible.
Lacking the financing, customers, and attitude of its southern sister, Reno could not keep up. Reno had quaint San Franscisco to feed it, but Vegas had vast Los Angeles. In addition, people in Reno were conflicted about casinos and gambling. Local laws kept casinos in a small zone in the center of the city and land ownership was so complicated that it was impossible to assemble enough land to build a Las Vegas Style resort. Finally, getting the financing for a megaresort in Reno was next to impossible. Still, casinos in Reno did quite well — until the dam burst.
Until 1988-90, casino gambling was much like divorce in 1930. It was available only in Nevada (and New Jersey after 1978). And like divorce, gambling was morally suspect. Confining it to the deserts of Nevada kept the rest of the country clean and pure. Nevada operated on the moral edge of the country, the periphery of sin. The state gave people everywhere the moral high ground. Regardless of what crime was committed elsewhere, Nevada could be pointed to as being worse. The Silver State provided an escape hatch; one could slip off to Nevada and indulge.
But then attitudes started to change and casino gambling began to spread across the country like wildfire. Casino gambling went from generating $5 billion to $10 billion a year between Nevada and New Jersey in 1989 to over $100 billion in 2025. In 2026, 27 states have commercial casinos, 29 have Indian casinos, 39 states have legal sports wagering, and in seven it is legal to play casino games online. Gambling is a national business. People gamble openly at home in front of friends and family.
After 95 years, the catalyst for legalizing gaming in Nevada is gone. Gone too are the conditions that led to its success. For the most part, Nevada has casinos that serve the local population; the rest of the nation has its own supply. Once the number-two gambling destination in the country, the Reno market has shrunk to a small fragment of what it was in 1990, but not so Las Vegas.
Las Vegas has continued to grow and expand. In 1950, Las Vegas had 25,000 inhabitants, today, three million people live in the valley. The expansion is more than more people, new resorts, and a longer Strip; it is expanding the concept of a resort. Las Vegas is like a particle in physics. It is a thing, a particle fixed in place with definable and measurable characteristics; at the same time, it is a wave, more of an idea than a thing. The particles are the casinos, restaurants, theaters, sportsbooks, and such. The waves are the entertainment, food, spas, suites, sporting events, and music festivals, concepts in flux and without a fixed location or measurement. Las Vegas is an idea as much as a place.
By March 19, 2021, there will be world class gambling resorts in Macau, Singapore, Japan and UAE. Each is seeking to be better than Las Vegas, to be the king of the gambling hill. Besides those destinations, there are thousands of establishments of all strips in this country that are willing to take a bet; bars, restaurants, social clubs, racetracks, offtrack betting sites, lottery outlets and casinos big and small. And add to that total, the millions of people in the country who can place a bet on their phone. With all that competition, can Las Vegas survive? Yes, it has something none of the others can match. They are all particles regardless of their location and density. But Las Vegas is a field, a conglomeration of waves, ever changing, ever evolving --or at least that has been the case for the last 95 years.
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