In 1957, the Nevada Gaming Control Board filed an eight-count complaint against the resort, alleging issues such as inadequate finances and card cheating by one of its dealers.

Fishman owned hotels in California and Texas, and the Nevada Tax Commission approved him for a gaming license in September 1953.

Fishman denied these concerns when the tax commission brought them up,[5] saying that he did not use his gaming license to attract partners.

[14] The Royal Nevada was designed by Paul Revere Williams, while John Replogle of Las Vegas served as the structural engineer.

[26] An investment man, Leon Stoller, had arranged for Fishman and Sam Miller to form a partnership in the new resort.

[27][28] A few months later, the Feuz-Page Construction Company also filed a suit against Fishman, seeking the remainder of money that was due for its services.

[15] However, following an investigation, the tax commission determined in February 1955 that Fishman, Miller, and a third partner were not suitable for a gaming license.

[48][49] In August 1955, three competing Las Vegas groups, including the Desert Inn resort, were in negotiations to take over operations at the Royal Nevada.

[50][51] A new group, led by Arnold L. Kimmes, eventually agreed to take over 50 percent of the lessee corporation, after discussions with the Desert Inn failed to produce an agreement.

In December 1955, stockholders invested more money into the resort and employees agreed to delay their payroll, with the hope that business would pick up during the upcoming Christmas and New Year's Eve holidays.

[46][58][59][60] General manager Bill Miller later claimed that the Culinary Workers Union had instructed these employees to steal the money, in an effort to get the resort shut down.

[58][62] There were plans to refinance the Royal Nevada and get it reopened, although creditors filed a request to have the resort placed into bankruptcy.

[22] A few days after its closing, the Royal Nevada was the target of an arson attempt, as two men placed a home-made fire bomb in a rear stairwell.

[62] The hotel portion reopened on February 23, 1956, after Fishman leased it to casino investor Jake Kozloff and orchestra leader Phil Spitalny.

[80] A few months later, approximately 400 employees received checks for unpaid salary, dating back to the final weeks of December 1955.

[90][89] The resort admitted partial guilt to four of the board's eight charges, including a lack of adequate funds;[91] it owed $170,000 in debt.

[95][96] Creditors supervised the reopening period, during which the resort attracted record crowds, convincing them to keep the casino open in 1958.

[79][102] The tax commission mandated that the casino have at least $300,000 to pay off potential winnings, and gambler Sam Baker agreed to provide a portion of the money in exchange for an 11-percent interest in the Royal Nevada.

[103] The tax commission was expected to approve the reopening in February 1958, but Baker pulled out of the deal at the last minute, for unspecified reasons.

[105] On March 5, 1958, agents of the Bureau of Internal Revenue closed the hotel portion for not paying its 1957 income taxes.

The agency placed a $50,000 lien against the resort and planned to sell the furniture and fixtures to pay off the money owed.

[107] The hotel reopened a couple weeks later, after the agency sold off alcohol and other items to partially satisfy the lien.

Simultaneously, Richardson and other shareholders had the Royal Nevada placed into bankruptcy reorganization, with Friedman named as temporary receiver.

[113] The casino, showroom, and restaurant were converted into convention space and eventually operated under the name Stardust Auditorium.

However, Spitalny and his group were fired in December 1955, after the hotel's president determined that the orchestra was responsible for declining attendance in the Crown Room.

The Las Vegas Musicians Union filed a lawsuit against the Royal Nevada, seeking $17,000 in salary for Spitalny.