During the 1920s and 1930s , the city re @-@ emerged as a major tourist destination . Under the influence of Sam Maceo and Rosario Maceo , the city exploited the prohibition of liquor and gambling in clubs like the Balinese Room , which offered entertainment to wealthy Houstonians and other out @-@ of @-@ towners . Combined with prostitution , which had existed in the city since the Civil War , Galveston became known as the " sin city " of the Gulf . Galvestonians accepted and supported the illegal activities , often referring to their island as the " Free State of Galveston " . The island had entered what would later become known as the " open era " .