Why Las Vegas Surpassed Reno

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Nevada has one of the most unique urban histories in the country, especially considering that its largest city could have ended up in another state. The name Nevada comes from a Spanish term for “snowy place”. You might think that’s odd for a state with a large city in a desert, but when Congress cut Nevada out of Utah, the territory’s southern border ran along the 37th parallel right up to the California border, well north of where Las Vegas now sits.

What would become Las Vegas was part of the New Mexico Territory, and then the Arizona territory after that. But Arizona had annoyed Congress with its Confederate sympathies, and Congress transferred the land west of the Colorado and west of the 114th meridian to Nevada. And much of Pah-Ute County, Arizona ultimately became Clark County, Nevada.

Arizona fought to get the land back, but it was not a powerful territory following the Civil War. It was essentially unpopulated at the time, with fewer than 10,000 people, while Nevada reached 42,000 by 1870, and featured a growing Reno/Tahoe region in its north.

Early Nevada urbanism was centered on Reno, which would remain larger than Las Vegas until the 1950s. Reno was a Silver Rush city, located on a Truckee River crossing near the silver mining town of Virginia City. It was also a stop on the transcontinental railroad, which helped sustain the city after the speculators left.

The Truckee River flows out of Lake Tahoe, and provided water for Reno, which allowed the city to grow without a major dam project like Las Vegas and Phoenix ultimately needed. But lacking a large flat valley, Reno didn’t develop into an agricultural center the way Phoenix did after the Roosevelt Dam was built.

Reno plodded along, and while it was still the largest city in the state in 1930, it also had fewer than 20,000 people. Nevada was also lightly populated with fewer than 100,000 people, and by far the smallest population of any state at that time. While neighboring Arizona and California had soared in the decades leading up to the Great Depression, Nevada bucked all national trends, and actually became less urbanized between 1880 and 1920.

Gambling had been common throughout the West until the 1900s, even San Francisco was a hub for the activity during its Gold Rush. But Nevada made it illegal in the 1900s, as many other states did at the time. Still, with a soft economy even in the roaring 1920s, the state was in exceptionally desperate shape in the Great Depression, and in 1931 it became the first state to make gambling legal again.

Reno took advantage of the new laws, and quickly became a gaming hub, as well as a divorce hub as the state legislature loosened those laws in order to give people a reason to come to the state. But at the same time that gaming and divorce were saving the Nevada economy from complete collapse, Hoover Dam helped transform Las Vegas from a rail stop on the way to Los Angeles to a destination in its own right.

Las Vegas grew over 60% in the 1930s. Just as Nevada’s cities were slow to grow while those in nearby states boomed, the opposite happened in the 30s. But even then, Las Vegas still had only 8,000 people in 1940, and was less than half the size of Reno.

Building an economy on gambling and divorce, Nevada was primed to be taken over by organized crime after World War 2. But William Harrah, the leader of Reno’s gambling scene was a generally above board businessman who got his start running a family bingo business. He fought corruption and helped create the Nevada Gaming Commission. Las Vegas, still smaller than Reno after the war, was less established and had no one like Harrah to compete against. The warmer weather of the former Arizona Territory land and proximity to Hollywood also helped, and it was a far easier place for dirty money to earn a return than the more established Reno market.

By the 70s and 80s, casinos became corporate, and California became more expensive. And as Los Angeles pushed closer to the desert, Las Vegas was in a much better position to pull in displaced Angelenos than Reno. And as it attracted more consumers, it offered more jobs in the residential service economy, and could attract Southern Californians without attracting the defense and electronics jobs that Southern California had lost. This trend went on overdrive in the 90s when Clark County nearly doubled in population, and Las Vegas became the fastest growing metro over 1 million people in the country.

Reno is still growing at a healthy pace, with a metro population approaching half a million people. But it never embraced out of town money the way Las Vegas did, and has been content to stay true to its marketing slogan as the “biggest little city in the world”.

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