It wasn’t until the Great Depression sapped Nevada’s economic vitality that relegalizing commercial gambling became politically viable. In early 1931, Southern Nevada was getting flush with the construction of Hoover Dam, while Northern Nevada, at the time the state’s richest and most populous section had a dying economy. The bill to legalize commercial gaming, along with a parallel measure that lowered the residency requirement for no-fault divorces to six weeks, were seen as boons primarily to Reno.

Of course, we now know that legalizing gaming benefited Las Vegas, although initially the center of gravity remained in Reno. Not until the growth of casino resorts on the Las Vegas Strip — in the 1950s — did the south pull ahead.
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.

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.
Nevada’s ban on gambling was never truly effective; social gambling remained legal and those who wished to run higher-stakes games reached understandings with the local authorities. Still, keeping commercial games under wraps benefited the state’s leaders, who could take pride in having abandoned an element of Nevada’s “barbaric” past and, presumably, the local authorities, who found that looking the other way could be lucrative.

When Governor Fred Balzar signed Assembly Bill 98 into law on March 19, 1931, he inaugurated the second regime of legal commercial gambling in the Nevada. “Wide-open” commercial gambling had first been legalized in 1869. At that time, the legal status of gambling in much of the American West was ambiguous — it wasn’t outlawed in Arizona or New Mexico territories, while California was in the process of enacting progressively more stringent anti-gaming laws. Gambling held on for longer in Nevada than in California, Arizona, or New Mexico, but in 1909, the state legislature criminalized commercial (although not social) gaming.
Liberal divorce laws lure cash and fame - The 1920s saw several states vying for the lucrative business of divorce. By 1927, Nevada, trying to keep up, reduced its residency requirement to three months and business flourished.

Then Idaho and Arkansas matched Nevada, and by 1931, state lawmakers pushed the limit even farther: six weeks. The legislation was signed into law on the same day as the legalization of gambling. While gambling would go on to singlehandedly drive the state's economic prosperity into the 21st century, the divorce bill had a much more immediate impact, especially in Reno.

The business of divorce was nothing new. As far back as 1906, Reno gained nationwide attention when an Eastern steel industrialist and his wife were divorced in a high-profile case.

Then, in 1920, silent-movie star Mary Pickford obtained a divorce from film star husband Owen Moore in nearby Minden.

With the 1931 law minimizing the inconvenience of sticking around in Nevada for six weeks in order to get a divorce, business soon boomed, brining in an estimated $1 million to $5 million in the 1930s alone.
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.