In the 1930s, corruption infected Santa Monica (along with neighboring Los Angeles). This aspect of the city is depicted in various Raymond Chandler novels thinly disguised as Bay City. Chandler's Farewell, My Lovely was inspired by the true story of the S.S. Rex. Beginning in 1928, gambling ships started anchoring in Santa Monica Bay just beyond the 3-mile (5.6 km) limit. Water taxis ferried patrons from Santa Monica and Venice. The largest such ship was the S.S. Rex, launched in 1938 and capable of holding up to 3,000 gamblers at a time. The Rex was a red flag to anti-gambling interests. State Attorney General Earl Warren got a court order to shut the ships down as a nuisance. On August 1, 1939, police boarded several U.S. Coast Guard craft and sailed out to Cornero's ships to close them down and arrest Cornero. The crew of the Rex initially fought off police by using water cannons and brandishing sub-machine guns. The engine-less ship surrendered after nine days in what newspapers called The Battle of Santa Monica Bay. Its owner, Anthony Cornero, went on to build the Stardust casino in Las Vegas, Nevada.
In 1938, Cornero decided to open a shipboard gaming operation off the Southern California coast. Sailing in international waters, Cornero would be able to run his gambling dens without interference from U.S. authorities.
Cornero purchased two large ships and converted them into luxury casinos at a cost of $300,000. He named the ships the SS Rex (above) and the SS Tango (below). Cornero's premier cruise ship was the SS Rex, which could accommodate over 2,000 gamblers. It carried a crew of 350, including waiters and waitresses, gourmet chefs, a full orchestra, and a squad of gunmen. Its first class dining room served French cuisine exclusively.
The two ships were anchored outside the 'three mile limit' off Santa Monica and Long Beach. The wealthy of Los Angeles would take water taxis out to the ships to enjoy the gambling, shows, and restaurants.
In October 1939, the Los Angeles Zoo was facing a financial crisis. Always the good citizen, Cornero offered the zoo a day's proceeds from the SS Rex. Considering that his ships were earning $300,000 a cruise, this was no idle gesture. Although zoo officials seriously considered the offer, pressure from state politicians forced them to decline it.
The end of the fleet
The success of Cornero's floating casinos brought outrage from California officials. State Attorney General Earl Warren ordered a series of raids against his gambling ships.
On May 4, 1946, after Warren became governor of California, he issued a public statement declaring his intentions to shut down gambling ships outside California waters; Warren said he intended, "to call the Navy and Coast Guard if necessary." During his address, Warren specifically denounced the newly-built gambling ship owned by "Admiral" Tony Cornero. Warren stated "It's an outrage that lumber should be used for such a gambling ship, when veterans can't get lumber with which to build their homes."
Despite battles with authorities over the legality of their entering international waters, the State of California found a way to circumvent the 'three mile limit.' The state refigured the starting point of the 'three mile limit' off the coastline and determined the ships were indeed in California waters.
On August 1, 1939, police boarded several U.S. Coast Guard craft and sailed out to Cornero's ships to close them down and arrest Cornero. However, when the police reached the ships, Cornero would not let them board. Reportedly, Cornero turned the ship's fire hoses on the police when they attempted to board and declared they were committing "piracy on the high seas." A standoff ensued for three days before Cornero finally surrendered.
Cornero eventually closed his floating casinos. He later tried to reopen land-based illegal casinos in Los Angeles; however, he was thwarted by mobster Mickey Cohen. Instead, Cornero returned to Las Vegas.