Sunday, Oct. 4, 2015 | 2 a.m.
Nevada owes a debt of gratitude to Frank Schreck. And Frank owes some thanks to Howard Hughes.
For reasons that will become apparent in a few weeks, I have been thinking about the man who made Las Vegas home from 1966 to 1970 and who, when he died under some questionable circumstances in 1976, was one of the wealthiest men in the world. Books have been written and movies have been made about the man who made Jane Russell famous for more than her on-screen talent and who was a billionaire at a time when being a millionaire was a rarity.
I thought about Hughes as I listened to my friend Frank recount his incredible legal career as perhaps the premier gaming attorney in Nevada and everywhere else. He had just been named the International Association of Gaming Advisors 2015 honoree. It was a special recognition, one he was happy and humbled to share with past honorees and his dear friends, Bill Boyd and the late Bob Faiss.
Since Frank was asked to share some of the highlights of his still-growing and legendary career, he embarked on a virtual history of Nevada’s modern-day gaming evolution.
It started with former Gov. Mike O’Callaghan’s decision in 1971 to appoint a 27-year-old Schreck to the Nevada Gaming Commission. He remains the youngest commissioner ever appointed to the regulatory body that oversees Nevada’s predominant and singularly impactful industry.
I remember Gov. Mike telling me — I was also young way back then — that Frank was not only a Yale graduate, he was smart as a whip and would one day be a major contributor to the proper growth of Nevada’s gaming industry. I thought of Mike’s prediction when IAGA President Katie Lever called Frank to the podium in front of a room packed full of his colleagues to give him that well-deserved recognition. As was always the case, Mike O’Callaghan knew how to predict!
Two things Frank said stuck out in my mind as he rattled off the many accomplishments he was able to achieve, both as a commission regulator and, afterward, as the gaming lawyer’s lawyer.
The first was his leadership in writing the rules and regulations that allowed public companies, banks and Wall Street investment firms to become owners of Nevada’s regulated casinos. Before Hughes moved to Las Vegas, each gaming hotel and casino was licensed to individuals only. Corporations were not allowed and, of course, in those days Wall Street and the insurance companies wanted no part of “gambling” (said with a sneer)!
All this was happening toward the end of the 1960s, when Las Vegas was in a slump and its potentially rosy and exciting future was, well, questionable. That is when Hughes, a recent Nevada transplant, decided he wanted in the gambling business and swept up six casino-hotels in practically the blink of an eye.
That brought two challenges to the fore: how to license Hughes, who refused to go out in public, and how to license corporations (which Hughes used to hold his assets), which violated the Nevada mindset of holding individuals accountable and not the legal fiction of a corporation for their conduct in the industry.
That’s about when Frank was appointed to the commission and handed the job of writing the rules that govern — to this day — the entrance of public companies, Wall Street and every other form of financial involvement into Nevada’s primary industry. It is those rules that have proved invaluable in the growth of gaming in Nevada over the past 40 years.
So, while we have Frank to thank for applying his considerable legal skills to finding the solutions to more and more complicated financial involvement in the gaming industry, the real impetus came from Hughes and his desire to own some of those “toys on the Strip,” as he called the hotels.
Hughes made it safe for the big boys to look at and consider investing in Las Vegas. If Las Vegas was good enough for the richest man in the country, they figured it was good enough for them. It was as simple as that!
What wasn’t as simple was figuring out why it took the gaming authorities so long to call Frank “Lefty” Rosenthal forward for licensing when everyone knew he was running the Stardust Hotel for his Chicago-based owners (I think you get the picture). If not, try to remember the 1995 film “Casino” with Robert De Niro and Sharon Stone. De Niro played the Lefty character.
Schreck answered that long-lingering question this past week in front of his hanging-on-every-word colleagues who may have also wondered why. It was common for the gaming authorities not to call some casino people forward, but we all knew why. Their pasts couldn’t stand up to modern-day scrutiny, but their present-day activities were exemplary. Hence, they got passes.
But Lefty? No one could understand why gaming authorities refused to act. Neither could Frank, who tried to bring Rosenthal forward but found only deaf ears attached to responsible and honest men.
Finally, according to Schreck, as he was leaving the commission to enter private practice, he got his wish. The commission would call Lefty Rosenthal forward for suitability — the drama that was played out near the end of “Casino.” Ask me one day what the real fight was about at the end of the movie between Rosenthal and the commission chairman, Harry Reid.
And later Frank got his answer to why it took so long. It was an answer some of us believed was the case but couldn’t prove. Call it professional courtesy.
Lefty Rosenthal was a government informant!
Frank confirmed it. Now that was worth going to the lunch.
Just kidding, Mr. Schreck. Seeing you honored by your colleagues for an outstanding legal career was worth the price of admission. Nevada’s gaming industry owes you a huge debt of gratitude, one I suspect it has been paying off regularly and will continue to do so for the rest of your stellar career. Congratulations.
Brian Greenspun is owner, publisher and editor of the Sun.