The Mafia in Las Vegas
by Krysta CardinaleWhile gambling has been legal in Nevada since the 1930s, the mob didn’t catch onto the moneymaking potential of Las Vegas until after World War II. Al Capone eyed the empty desert in the mid-’30s, but never forged ahead with his plans of turning it into a hotel and gambling haven.
Las Vegas remained mob free until Lucky Luciano’s partner and confidant, Meyer Lansky. He decided to capitalize on the “cash cow” that Sin City could become. Before that, Las Vegas was nothing more that a decrepit desert town inhabited by cowboys and a few pitiable slot machines.
Lansky’s timing couldn’t have been better. Before Vegas, American tourists looking for a hedonistic good time had to travel all the way to Cuba. In Cuba gangsters were welcomed by the corrupt Batista regime, casinos were plentiful, and the profits rolled in. A little over a decade after the first casino opened in Las Vegas, Fidel Castro’s Revolution swept Cuba and kicked everyone out of the party.
Thanks to the money that had been made in Cuba, modern Vegas was essentially built on the mob’s dime. Lansky, not wanting to be the one blamed if the Vegas plan didn’t pan out, enlisted Bugsy Siegel. Siegel’s job was to drum up cash and enthusiasm among gangsters over the glitzy venture. Of course, Vegas boomed and Lansky took all the credit while Siegel got five bullets to the head for skimming on casino funds.
The Flamingo was the first hotel to go up in 1946. Things got off to a shaky start when it opened ahead of schedule. This was because it opened before word could spread and tourists could get excited about the place. And of course, there was the Siegel fiasco.
Lansky took over operations at the Flamingo and turned its fortunes around. This set the stage for more for more of the mob in Las Vegas. Mobsters from Chicago and Cleveland moved in with other hotels. Within a few years, the Thunderbird, Desert Inn, Sahara, Riviera, Dunes, Stardust, Caesar’s Palace and Sands were all open and drawing huge crowds with their lures of gambling and A-list performers. Frank Sinatra even had a small stake in the Sands on the condition that he performed there every so often. Caesar’s Palace was built from the mafia in Las Vegas. It was constructed from millions of dollars that Teamsters Union president, Jimmy Hoffa, skimmed off his workers’ pension funds.
As more mobsters were building more hotels, concerns arose about how the increased competition would affect their profits. The various owners from outfits around the country eventually agreed on a deal that would give each an interlocking share in the other’s hotel. By the time the ink was dry and the lawyers had hammered out the deal, it was nearly impossible to tell who owned what, just that everyone got a piece.
The 1960s there was a time of change and upheaval for the mob in Las Vegas. A reclusive and eccentric billionaire, Howard Hughes, managed to finagle a change in Nevada law that forbade corporations to buy interests in casinos. He bought up 17 hotels, forcing the ruling mob owners out. The next decade, Hughes got out of the casino business when his ventures were not performing the way he had hoped. The mob jumped all over this, and the Mafia involvement in Las Vegas casinos returned. The Mafia in Las Vegas was short-lived this time.
In the ’80s there was a wide-scale attack on Mafia interests in Las Vegas by the FBI. Mob-owned casinos were cleaned up and sold to legitimate owners. These new owners changed the face of the city and turned it into a family-themed vacation hotspot. They began bringing in more money than the old-school mobsters could have ever dreamed of.
