How Frank Sinatra Lost His Nevada Gaming License

Dec 20, 2018

Nevada’s casino industry is one of the most tightly regulated in the world, but it takes a lot of legislation and enforcement to keep it that way. In this segment of Time & Place, historian Alicia Barber describes one of the earliest challenges to the state’s strict gaming laws.

The State of Nevada legalized gambling in 1931, but for a while there weren’t a lot of restrictions on who could open a casino there or play in one, which left the door open for a lot of unsavory characters. Finally, in 1955, the state created a gaming control board, and a few years later, passed the Gaming Control Act, which set up the current framework for regulating the industry.

That system was pretty new in the summer of 1963 when state officials got word that Sam Giancana had been spotted at the Cal-Neva Lodge at the north end of Lake Tahoe. The resort had become a popular getaway for celebrities like Marilyn Monroe, the Kennedys, and Frank Sinatra, who liked it so much he had bought it in 1960.

But a visit from Giancana was a serious problem. In a 2001 interview, Guy Farmer, who worked in gaming control at the time, explained why:

"Giancana just wasn’t a Chicago mobster; he was the Chicago godfather," Farmer said. "He was one of the top organized crime figures in the United States, and, as I recall, the FBI had lost his trail. They usually followed him around Chicago, but somehow he made it out here to Nevada, and we found him up there. At that time, Giancana was probably the most notorious member of the Black Book."

The Black Book was shorthand for the state’s List of Excluded Persons, criminals or suspected criminals who are permanently banned from setting foot in Nevada casinos. Giancana was one of the original mobsters on the list, and by rolling out the red carpet for him, Sinatra was essentially breaking the law.

"You couldn’t have had a more clear violation of the rules and regulations we had put into place to try to clean up the gambling business," Farmer said. "You know, Frank was just real used to getting his own way and playing by his own rules, and we just had to move on his license; we couldn’t allow that challenge to go unmet."

In what became a notorious phone call, Sinatra berated Ed Olsen, the head of the Gaming Control Board, for threatening to subpoena him and his friends about the incident, and basically for making him look bad. The board then filed a formal complaint against him.

"Sinatra’s response was to basically say he was bigger than the State of Nevada," Farmer said. "And after all he had done, 'Why were we so ungrateful?' In the end, Sinatra threw in the towel, and realized that he wasn’t going to win. When you are accused of cheating or hosting a hoodlum, you have to prove that you didn’t do it. And there was no way that he could have proven that Giancana wasn’t his guest at the Cal-Neva; he was."

Sinatra surrendered his gaming licenses for the Cal-Neva and for the Sands on the Las Vegas Strip, where he also held an interest. That fall, he announced his longstanding decision to divest himself of his casino investments in order to devote more of his time to the entertainment industry, which turned out pretty well for him.

Alicia Barber is a professional historian and writer living in Reno who runs Reno Historical. Oral history clips for this segment were provided by the Special Collections Department of the University of Nevada, Reno Libraries. You can hear of the 2001 interview with Guy Farmer on gaming regulation here.