After fierce debates and political maneuvering, the Nevada State Legislature passed a bill legalizing gambling operations on Native American reservations. The bill was promptly sent to the governor for signature.
Governor Gene gave an interview to the media, delivering a high-minded and righteous speech. He declared that he would strictly vet the qualifications of gambling industry participants and tightly regulate the flow of gambling funds. Most importantly, he would cooperate with the IRS to ensure that no money ended up in the hands of organized crime.
It all sounded very upright and principled, but the real key was dragging the IRS into the equation. As long as the IRS could collect a few million dollars in taxes from Nevada casinos each year, Washington might grumble, but it wouldn't actually take any meaningful action.
After all, Gene had made it to the position of a state governor — a few well-placed words were enough to cover his own tracks. Who knows, maybe starting next year his official spending budget would double, or even more.
All that speechifying served one purpose: getting national exposure (to the voters). With the desired effect achieved, the law was signed into effect the next day, and the IRS promptly stepped in to help Nevada draft comprehensive tax guidelines for the gambling industry.
All those loud opposing groups — religious organizations, women's associations, environmental foundations, anti-mafia mutual aid groups, and so on — were all conveniently invited into the Gambling Industry Development Committee. Everyone became a review board member, and the more influential ones even became executive members.
Running a social organization was a good business — being a committee member meant you got funding, had to attend endless meetings, stay in hotels, go on "site visits," and enjoy countless receptions and banquets...
Naturally, the chairman of the Gambling Industry Development Committee was Senator Harry Heller. Under his recommendation — or rather, under the actual planning of Nair and his two partners — a comprehensive operational guide for Nevada's gambling industry was quickly released.
First, and most importantly: how many licenses would be issued? After the committee's so-called in-depth discussion and extensive investigation, they arrived at a number that satisfied all parties.
Six.
Each license would be valid indefinitely, but every three years, operators had to pay certain fees for legal and administrative purposes. These fees were not fixed — the first round would be determined through auction, and later adjustments could be made. Future fees could be calculated as a percentage of actual casino revenue or determined via competitive bidding every three years.
This was uncharted territory — the first large-scale legalization of commercial gambling. Everyone wanted to see how the first three years would play out. If the federal government suddenly decided to intervene, the mobsters like Charlie Luciano would have time to cut their losses or pass the licenses on to others.
Given the auction format, all Native American bidders had to obtain a guarantee from a state senator or representative and pay a $300,000 deposit in advance. This was perfectly reasonable — gambling licenses were no small matter.
(Side note: remember that one judicial auction where an item up for sale was a commemorative Yu-Gi-Oh! gold card? It was valued at 80 yuan, and the deposit was only 100 yuan, with no further requirements. The result? Some absolute fool drove the bid all the way up to 80 million. Was this an auction or a circus act? A national judicial auction turned into a complete joke.)
So, setting a deposit relative to the item's value and requiring full payment beforehand really does help reduce the number of clown bidders.
As for the requirement to get backing from a state official, it served two purposes: first, to show this was a serious process — not just anyone could participate. Second, it was a convenient way for those politicians who helped pass the gambling legislation to earn a little on the side.
If you want a senator's endorsement, you'd better offer a "tea money" token of appreciation. At the very least, you'd be expected to contribute tens of thousands to their next campaign.
Hahahahaha...
Everyone understood the game — no need to spell it out. And the $300,000 deposit conveniently weeded out the weak players. Backing from major organizations meant it was easier for the state to collect its share.
To put it even more bluntly: after Charlie Luciano got Senator Heller to raise the bar, only the biggest national crime syndicates could afford to bid. They were all Luciano's brothers in the underworld — they could avoid cutthroat competition and agree on a price that made everyone happy.
Next came another key issue: casinos could only be built on Native American reservations. That limited the options significantly. Initially, Nevada's power players favored Reno — a well-developed city whose name sounded a lot like a French car brand, but was spelled differently.
Why Reno? The logic was simple. It was a key rail junction between Nevada and California on the Pacific Railroad. From there, a train to San Francisco took only six hours — perfect for attracting rich West Coasters looking for fun.
There was even talk of teaming up with the railroad company to launch a luxury "casino express": board at night, sleep on the train, arrive at the casino in the morning — let the good times roll.
What's not to love?
A second reason was even more obvious: being on the rail line meant they could cheaply transport building materials and labor from the East Coast. America's oversupply of steel and concrete could be brought in via rail at minimal cost. It was a flawless plan.
But Nair vetoed the proposal outright. Charlie Luciano and Meyer Lansky were a bit puzzled. Reno seemed like a solid option.
"A developed city comes with pre-existing regulations," Nair explained. "If we're going to build a massive casino, why not build an entire city around it?"
He pulled out a map, used a magnifying glass, and pointed to a village so tiny it was practically invisible. Originally a miner's camp during the gold rush, the area was abandoned after the silver ran dry.
Later, it became a military outpost when the U.S. fought with Mexico nearby. To solidify control over the land seized from Mexico, a military station was set up.
Today, it was just a small village with a few Native American residents.
"What is this place?" Lansky asked, adjusting his monocle.
"Las Vegas."