Gambling had flourished in the state despite the prohibition, remaining as popular on the Comstock Lode as it was elsewhere in the Far West.
By legalizing the practice, the state legislature recognized the prevalence of gambling in Nevada at the same time that it began to regulate and tax betting games.
As a source of private income and public revenue, gambling no doubt gained importance during the late nineteenth century when the mining economy of Nevada collapsed.
As an adjunct to betting, and as another source of money, the state legalized prizefighting in 1897, shortly after California and a host of other states outlawed it.
With boxing, betting, and the first few illustrious divorces, Nevada earned a reputation for permissiveness in the first decade of the twentieth century.
The return of prosperity in mining after 1905, however, enabled the state to afford to follow the nation's progressive impulse.
Seeking greater respectability in the eyes of other states, Nevada outlawed gambling in 1910 and extended its required length of residency for divorces in 1913.
The longer residency minimum lasted only two years, but the prohibition n casino gambling lasted some twenty years.
In open violation of the law, Nevadans continued to gamble after 1910. Then, upon the decline of mining in the 1920s and 1930s, residents of the state set out to find new sources of income.
Unlike Las Vegas, most of Nevada suffered along with the other forty-seven states during the Great Depression and searched for any new source of money.
Gambling was one of the most obvious options, and in 1931 the legislature reversed its stand on the activity.
Six other western states also legalized betting in the decade, establishing pari-mutuel wagering on horse races. Nevadans went even further, however.
Over the strident objections of the state's leftover progressives, the legislature legalized wide-open casino gaming, returning to the permissive policy of the late nineteenth century.
Moreover, in the later 1930s, the Silver State authorized betting on other states' horse racing, and for a time even considered a state lottery.
Advertising itself as 'One Sound State' in the midst of nationwide economic collapse, Nevada disregarded some of the welfare burdens that other state governments has assumed and strove to maintain a balanced budget and to prohibit taxes on income, corporations, inheritance, gifts, and 'intangibles'.
When Nevada embraced easy divorce, open gambling, and low taxes, it was merely 'exploiting the federal commodity'.
Throughout American history, different states, particularly those small in population or size, have profited from each state's sovereign right to set its own guidelines for licensing corporations and regulating morals.
Nevada had merely followed the examples of New Jersey and Delaware in making itself more attractive to businesses by promising low taxes and lenient regulations. Similarly, Nevada had several predecessors as divorce center of the nation.