Under the authoritarian leadership of City Manager Sims Ely (1931–1941), Boulder City operated as a federal reservation distinct from Nevada state jurisdiction. Despite the 1931 legalization of gambling in Nevada, Ely strictly enforced a federal ban on gaming and alcohol within Boulder City.

The Federal Reservation

Boulder City was built to house the workers constructing Hoover Dam. Unlike every other town in Nevada, it operated under federal law, which prohibited gambling and alcohol. This created a unique legal geography that would profoundly shape Las Vegas's development.

Gate and Permit System

Ely utilized a gate and permit system to control residency and access, evicting workers who violated moral codes. He ran Boulder City like a company town, with strict rules about behavior, curfews, and associations.

The Economic Pressure System

This exclusionary policy forced the lucrative dam workforce to seek entertainment outside the federal zone, directly fueling the growth of the Railroad Pass Casino (at the reservation border) and the gambling halls of Las Vegas. Consequently, Sims Ely's "moral enclave" acted as the primary economic pressure system that channeled capital into the nascent Las Vegas gaming industry.

Ironic Legacy

In trying to create a moral oasis, Ely inadvertently supercharged Las Vegas's vice economy. Every dollar that couldn't be spent in Boulder City found its way to Fremont Street.