Death and rebirth

EDITOR’S NOTE: This is the last in a series of columns looking at corruption and illegal activities in Hot Springs from 1927 to 1967. This installment looks at the explosive growth of illegal casino gambling in Hot Springs from the mid-1950s to the spring of 1964.

“One night in late 1967 after gambling was closed down, the new Velda Rose Towers Hotel rented only 10 of its over 200 rooms.”

— A local hotel owner

In 1961, new federal anti-gaming laws were passed by Congress to rein in illegal gambling around the country. While gambling was a violation of the laws of most states, but not federal law, the new

1961 federal legislation had made it a crime to bring equipment or people across state lines for gambling purposes.

Throughout the early

1960s, the FBI and U.S. Justice Department increased its investigations about the gambling operations in Hot

Springs. In 1962, a federal grand jury was convened to investigate illegal gambling but declined to issue criminal indictments by only one vote.

In February 1964, two senior attorneys with the Department of Justice traveled to Hot Springs and toured the wide-open local casinos. The next morning these federal officials held a news conference and stated that Hot Springs had the largest illegal gambling operation anywhere in the United States.

These threats of federal prosecution finally motivated Gov. Faubus to order the shutdown of the gambling clubs. On Saturday night, March 28, 1964, the casinos voluntarily closed down their operations after one last profitable night of catering to hundreds of customers. Despite the 1964 shutdown, gambling operations did continue on in an erratic fashion from 1964 until 1967. Noted historian Roy Reed described the death of gambling between 1964 and its final demise in 1967 “like a copperhead with its tail cut off, gambling took a long time to die.” Despite occasional raids by the Arkansas State Police, the casinos would reopen again and again.

In 1964, a proposed amendment to the Arkansas Constitution that would have allowed gambling was voted down by Arkansas voters. However, this amendment did receive over 70 percent of the popular vote in Garland County where there was substantial public support for the lucrative gambling industry. In 1967, the Arkansas Legislature enacted legislation authorizing gambling in Hot Springs, but Gov. Rockefeller vetoed the bill.

So just when exactly did illegal gambling finally end in Hot Springs? Throughout 1967, newly elected Gov. Winthrop Rockefeller increased the state police raids on the gambling establishments. In October 1967, state police finally succeeded in confiscating and destroying most of the gambling equipment and the local gambling industry came to an end.

The final death of casino gambling in 1967 was traumatic for the Hot Springs economy. The new large downtown hotels suffered from very low occupancy. Thermal bathing had declined from over

1 million baths in 1947 to less than 200,000 baths in 1967, and the bathing industry was in rapid decline. The town had lost its two major attractions — gambling and thermal bathing. Community leaders knew that they had to reinvent the town.

Then, in 1969, the town benefited from two major economic events.

First, Cooper Communities began the construction of Hot Springs Village in northeast Garland County. This would be the largest (in land area) gated private community in America and was a huge economic shot in the arm for Garland County. Hundreds of jobs were created in the construction of homes, roads and several golf courses at the Village. The second big event was the 1969 sale of the privately owned Dierks Lumber Co. to Weyerhaeuser Corp. Weyerhaeuser located its southern regional offices in Hot Springs and invested tens of millions of dollars in new plants and equipment in Arkansas.

In the 1970s, Hot Springs begin to develop new tourist attractions, including Mid-America Museum and Magic Springs. The bad sewage pollution problems affecting Lake Hamilton were resolved, and the lake became popular with both local families and tourists. The crystal-clear waters of Lake Ouachita attracted tens of thousands of tourists. Attendance at Oaklawn Jockey Club dramatically increased.

People of integrity began to run for local government offices and judgeships because they could finally serve in public office without being complicit with the illegal gambling industry. In 1973, local voters approved a bond issue for the construction of Garland County Community College. The days of Hot Springs being known as “Sin City” were finally over.

If you wish to learn more about the gambling industry in Hot Springs, you might want to visit the History of Hot Springs Gambling Museum, which displays a large collection of antique gambling equipment. The museum is located at 3339 Central Ave., Suite C.