Some saloon names were openly borrowed from other locations either due to owners moving or to people wanting to communicate clearly what they had to offer. In using a name previously branded with memories of certain entertainments, atmosphere, or scope, they hoped to quickly stand out from the numerous other establishments offered to the traveler.
The 'Red Light Saloon' apparently was first located in Caldwell, Kansas. This was a town that was a queen of the cattle trails during the time when Dodge City and Ft. Worth were first booming (1870's and early 1880's). The saloon was part of a hotel and offered baths, booze, and broads.
Such a reputation could not go begging so others popped up in Helena, Montana and in Dallas and Ft. Worth in Texas. Additionally, there was one Rawlins, Wyoming and in Oklahoma City.
A song, ribald and raw, also emerged and is found today in two versions. One is an edited version and the other not so much.
At its heart it can be seen as a cautionary tale of what can happen if a man visits such establishments and keeps the intimate company of the women there.
LOC - http://www.loc.gov/item/afc9999005.34976
Two versions on one page - http://www.traditionalmusic.co.uk/bawdy-songs/008576.HTM