On January 1920, the Eighteenth Amendment and the Volstead Act took effect, and Nevada, like the rest of the nation, was thrown into Prohibition.
Prohibition did not engender respect for law enforcement anywhere, but in Nevada, where the laws against the consumption of liquor and gambling existed side by side, the effect was even more pronounced.
Knowledge of the speakeasy password entitled a person to enjoy both vices— liquor and gambling— and disrespect for the law was rampant.
By 1930, anti-gambling fervor was substantially exhausted. The only residents who strongly opposed gambling were apparently the same upper-and-middle-class women who supported Prohibition, and their support among the citizenry was fading after two decades of experimentation.
Talk of gambling legalization became widespread.
Growth was slow during the 10 years following the Depression, and by 1841 growth had increased only 49% over the 1931-1932 level. However, between 1941 and 1944, gaming had increased 55 percent. The period 1942-1944 became the dividing point between Nevada’s early gaming history and its modern era.
Through the mining camp days into the twentieth century, Nevada’s casinos for the most part catered to the local gamblers. There was no effort to lure big-time gamblers from out of state. Reno and Washoe County were the leading areas, both in population and in the amount of gambling that took place.
The construction of Hoover Dam caused some growth in Southern Nevada, but prior to World War II, Las Vegas had been little more than a water stop on the Union Pacific Railroad and respite for those traveling across the desert to southern California.
In 1946, the Fabulous Flamingo, the first of the posh strip luxury casino hotels, burst on the scene. The many casinos on the strip shifted the dominant gaming from Reno and Washoe County to Las Vegas and Clark County.
Also, new concepts of licensing and fees based on a percentage of gross win came into being. These fees were in addition to the earlier county and state fees.
A major legislative change took place when the Nevada Gaming control Board was formed within the Nevada Tax Commission. The primary reason of this new agency was to inaugurate a policy that would eliminate the undesirable element in Nevada gaming and provide regulations for the licensing and operation of gaming.
In 1959, the current Nevada Gaming Control Act was enacted, creating the five-member Nevada Gaming Commission with absolute power to grant or deny any application for a gaming license.
The commission also had the power to enact regulations and to act as the collection agency of all gaming taxes. The Gaming Control Board was removed from the Tax Commission and became the investigative and enforcement arm of the Gaming Commission.