VEGAS MYTHS BUSTED: Vegas Has Been America’s Casino Capital Since the 1930s

Posted on: April 21, 2025, 08:02h. 

Last updated on: April 23, 2025, 05:18h.

Corey Levitan Read More

Expertise: Commercial Gaming, Entertainment, Expert Insight, Las Vegas, Restaurants, Las Vegas Myths.

Of those who even know that Las Vegas didn’t officially legalize gambling until 1931, most assume that it almost immediately became the gambling capital of the US. Not true. That year, Reno had 21 casinos to Las Vegas’ eight.

But at least one other US city had them both beat until the late 1940s.

By 1941, there were only 24 casinos in Las Vegas, a number that would surge to 90 by 1955. Reno had 15. But Northern Kentucky had 40 or more — most in and around the tiny city of Newport. All were illegal, of course, since casino gambling has never been legal in Kentucky.

And though owners of illegal businesses never file for business licenses or advertise in the newspaper, we know because, in 2010, Matthew DeMichele and Gary Potter, from the Department of Justice and Police Studies at Eastern Kentucky University, researched and compiled the following list of gambling dens in the region from the 1920s through the ’60s…

The most popular were the Beverly Hills Club, the Primrose Club, the Yorkshire Club, the Lookout House, and the Flamingo. (In the ’50s and ’60s, Newport would also have its own Tropicana, Stardust, and Silver Slipper. Hey, when you’re illegal anyway, how much does a copyright violation really matter?)

What Else is Newport?

By the 1940s, Newport housed 30K people — and more than triple that every weekend.

According to some reports, its visitors included Frank Sinatra, Dean Martin, Sammy Davis Jr., and Marilyn Monroe. But none of these reports seem particularly reliable. Some even claimed that the Rat Pack performed in Newport, which definitely did not occur, though Martin was reliably reported to have entertained guests at house parties thrown by Frank “Screw” Andrews, owner of the Sportsman’s and Alibi clubs. In 2015, the Cincinnati Enquirer claimed that Martin was once employed at the Beverly Hills Club as a blackjack dealer, but that’s a claim never repeated anywhere else.

The biggest entertainers we could verify ever performing in Newport were Liberace, Milton Berle, and Steve Lawrence and Eydie Gormé, who all headlined the Beverly Hills Club.

There was even a line in the movie “Godfather II” paying homage to the city’s gambling connection. Hyman Roth, played by Lee Strasberg, said, “Eddie Levine of Newport will bring in the Pennino Brothers, Dino and Eddie. They’ll handle actual casino operations.”

Why the Hub, Bub?

Prohibition, which went into effect in 1920, set Newport on its course toward becoming the “Sin City of the Midwest.” To meet their customers’ continuing demand for liquor, restaurateurs turned to George Remus. A Chicago attorney and pharmacist turned rumrunner — under the loophole that alcohol could be manufactured for medicinal purposes — Remus made Newport a hotbed for bootlegging.

Most of the liquor moved through nearby Cincinnati — in operations run by Al Capone and Meyer Lansky — came from Newport.

And, since almost all local police and government officials were already paid off by the mob to look the other way from the liquor, casinos and brothels sprouted in almost every back room.

After Prohibition ended in 1933, nothing much changed until 1936. That’s when the Cleveland Four (Cleveland syndicate members Moe Dalitz, Morris Kleinman, Louis Rothkopf, and Sam Tucker) entered Newport in a very physical way.

When they made an offer to Peter Schmidt — an associate of Remus’ —  to either buy the Beverly Hills Club or take him in as a partner, Schmidt thought he could refuse it.

So his club was burned to the ground and the niece of its caretaker murdered.

Schmidt, a badass, rebuilt and reopened his gambling den a year later as the Beverly Hills Country Club. And a group of armed men promptly robbed it. Next, Schmidt approached another syndicate from Toledo to provide him protection, but they wanted no beef with the Cleveland Four.

By this point, Dalitz and his crew had already taken over the Coney Island Parkway racetrack nine miles outside Newport by having its owner assassinated in a New Jersey restaurant. (It still operates, as Belterra Park, today.)

In 1940, the Beverly Hills Country Club was sold to a front for the Cleveland Syndicate, and at least seven (but probably more) of Newport’s remaining independent illegal casino entrepreneurs saw the wisdom in following suit.

The mobsters either bought and rebuilt established Newport clubs into carpet joints — upscale places to gamble, dine, and be entertained that became blueprints for the Vegas Strip’s first casino resorts — or they built new ones from scratch.

What’s Old is Newport

Starting with the Kefauver Hearings in 1950-51, the mob loosened its grip on Newport as the county, state, and federal governments tightened theirs on illegal gambling.

Lansky, Dalitz, and other key mafia figures moved the base of their operations to Las Vegas, where casino gambling was legal. Though skimming unreported income from their revenue was not, this was not easy to detect since the businesses were cash only and local authorities were easily corruptible.

The arrest made national headlines that caught the attention of US Attorney General Robert F. Kennedy, whose eyes were trained on the city ever since the Kefauver hearings.

RFK sent 39 FBI agents to Newport, which became his primary target for the war against organized crime. Reluctantly, the mob left town — and so did about half of its population.

Today, Newport, Ky. is an upstanding city with about the same population it had in 1870 (15K) and the same number of annual celebrity visits as well (0).

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