There might be a long-standing cooperation with the state: bring construction money in, hold ultimate control, but do it all through respectable third parties so that regulators aren't constantly nagged about connections between the casinos and underworld figures.
Interesting point, Pete. After gambling was legalized in 1931, the Nevada Legislature put oversight into the Tax Commission. Oversight was lax--they didn't look too closely at gaming license applicants as long as they were going to bring taxable income into the state. But, as you imply, the gangsters may have had a
quid pro quo with the state to use front men for licensing purposes in order not to call attention to the cozy relationship. That changed in '58, when, after embarrassing revelations about OC involvement in Nevada gambling, the Legislature took control out of the Tax Commission and put it into a new Gaming Commission, which had real regulatory teeth. Harry Reid, former US Senate Majority Leader, was an early chief of the Gaming Commission.
