It was political:

Three men: Ruby Kolod, William ("Ice Pick Willie") Alderman and Felix (Milwaukee Phil) Alderisio. were convicted in 1965 of extorting a Denver lawyer in a shady oil deal. Nevada was experiencing a state budget crisis, and the Legislature was considering raising the tax on gaming revenues from 5.5% to 15.5%. Governor Grant Sawyer and the Gaming Board thought the tax hike would harm the gaming industry. The trio were placed in the Black Book, allegedly because the Governor wanted to "communicate" that they were keeping "unsavory elements" out of the gaming industry. But, Kolod was a major shareholder in several hotels and a member of the Dalitz Desert Inn Group; Alderman also owned stock in several Vegas hotels. Dalitz, the most respected and powerful gaming figure in Vegas, used his influence to get Kolod and Alderman out of the Black Book only three weeks after they were put in. Alderisio stayed in the Black Book. (See my earlier post on bigotry and stereotypes.)

Governor Sawyer was defeated for re-election; the Dalitz Group was the biggest contributor to his foe, Paul Laxalt, who did not put anyone in the Black Book during his term. Incredibly, Sawyer said, after Dalitz died, “Moe Dalitz was probably as responsible for the successful gaming economy in southern Nevada as any one person. In my opinion, he was a good citizen in every way.”