Two events subsequently occurred that would dramatically affect
Nevada gambling. The first to occur was the stock market crash of October
29, 1929, which was appropriately called “Black Tuesday.” The second
event was the funding of the Hoover Dam project by the U.S. Congress
only three months following the crash. These two events provided the impetus
for the introduction and subsequent passage of Assembly Bill 98,
which is better known as the Wide Open Gambling Bill.
The subsequent depression proved to be very hard on the state and,
as a result, in 1931 Assemblyman Phil Tobin from the tiny town of Winnemuca,
Nevada, introduced Assembly Bill 98 in an attempt to provide
economic relief. Phil Tobin and the supporters of his bill felt that passage
of the bill would accomplish three things:
1. Legalized gambling would provide the state with much-needed
revenue through gaming taxes.
2. Legalized gambling would enhance business in general.
3. With the impending construction of the Hoover Dam and the
thousands of federal workers who would be required for the
project, there was concern that the U.S. government would move
to shut down the many illegal casinos that were flourishing in
Las Vegas less than 40 miles away. Supporters of the bill believed
the only way to prevent federal intervention in these illegal activities
was to legalize gambling. How could the federal government
intervene if gambling was legal? Interestingly, this tactic
was to prove successful (Roske, 1977).
On March 19, 1931, Governor Fred Balzar signed historic Assembly Bill 98
into law. During the same legislative session, the legislators passed a bill
lowering the residency requirements for divorce from three months to six
Assembly Bill 98 legalized the following games:
• Big Injun
• Stud Poker
• Draw Poker
Legalized gambling provided a welcome new source of state revenue.
Each gambling establishment (casino) was charged $25 monthly for each
card game, $10 monthly for each slot, and $50 monthly for each table
game. The tax was determined by the number of devices and not the
amount of the casino win.
The tax revenues were to be split, with 75% going to the county
where the casino was located and the remaining portion going to the
state. Since the county received most of the tax revenue, the responsibility
for collection of the taxes and enforcement of gambling laws was placed
with the county sheriff.
The original version of the bill failed to provide for any means of regulation.
Cheating and operating a casino without a license were forbidden.
Any operator found guilty of cheating was forced to forfeit his license for
one year; however, no agency was assigned the power of enforcement.
This omission was rectified eight days later when the legislature empowered
local authorities to regulate gaming or prohibit it entirely (Vallen,