The first men to gamble in Las Vegas were the Paiute Indians who peopled the area before the town existed. When the Mormons ventured down from Utah in the 19th century to try to convert these Indians to Christianity, they were ignored by the Paiutes who had far more interest in playing a kind of roulette in the sand with bones and colored sticks. The Paiutes and the mobsters of organized crime were to enjoy a similar association with Las Vegas. Conceived as a gambling mecca, modern Las Vegas was built almost exclusively by mob money.
During World War II Las Vegas was little more than a dusty jerkwater town in the middle of the desert, with a few gas stations, greasy-spoon diners and some slot machine emporiums. It was popularly said that Bugsy Siegel was the first to visualize the town as a glittering gambling mecca, but the fact is he was pushed at first by Meyer Lansky who in 1941 ordered Bugsy to send a trusted aide, Moe Sedway, to work in Las Vegas. For a time Bugsy thought it was a zany idea that he had little time for—he was far happier being a Hollywood playboy—but Lansky kept pushing, realizing that an area with legalized gambling offered far more profits and less crooked overhead than illegal casinos elsewhere.
When World War II ended, Bugsy warmed to the idea of Las Vegas with glitter. His enthusiasm convinced mob figures to invest big money to develop the town. Lansky now was able to hang back. If the idea fell through Siegel could take the rap; if it succeeded, Lansky would step forward to take credit.
With a bankroll of something like $6 million in mob funds, Siegel built the Flamingo, which turned out to be a monumental bust because he was forced to open early, before public interest could be built up. Bugsy had other woes. He had skimmed off huge sums of construction money, and when the mob discovered this, they gave him a deadline for its return. Siegel’s only hope was to get the Flamingo to succeed. When it didn’t, he was summarily murdered.
Nevertheless, Las Vegas grew. With Lansky now overseeing the Flamingo it turned profitable by the end of its first year. Now the mob really piled in. State officials set up strict rules aimed at keeping the Mafia out, but to little avail. With appropriate fronts, the syndicate simply took over. The Thunderbird became Lansky’s baby although he had slices of many other places. The Desert Inn was largely owned by Moe Dalitz and others of the Cleveland mob.
The Sands was controlled behind the scenes by Lansky, Joe Adonis, Frank Costello and Doc Stacher. Actor George Raft was brought into the deal, and singer Frank Sinatra was sold a 9 percent stake. Sinatra was said to have been extremely flattered, but as Stacher later stated, “The object was to get him to perform there, because there’s no bigger draw in Las Vegas. When Frankie was performing, the hotel really filled up.”
The Sahara and the Riviera were controlled mainly by the Fischetti brothers, Tony Accardo and Sam Giancana, the rulers of the Chicago Outfit. The Dunes was a goldmine for Raymond Patriarca, the top mafioso in New England.
When the Stardust was being built, Dalitz started complaining that it would drain funds away from his Desert Inn. Dalitz looked like he was ready to solve the problem the way a problem was handled during the bootleg wars of Prohibition, but Lansky suggested a meeting to try to iron out the problems. Representing the Stardust interest was mobster Tony Cornero, one of California’s pre-war gambling-boat operators, while Dalitz and his right-hand man, Morris Kleinman, were present for the D.I. Winging in from New Jersey was Longy Zwillman. A deal was hammered out so that each group ended up with an interlocking interest in each other’s hotels, and when the lawyers got through with it, nobody could really tell who owned what where.
When Frank Costello was shot in 1957, police found a tally in his coat pocket that matched the revenues of the Tropicana for a 24-day period. It was apparently a revelation to the Nevada Gaming Control Board that Costello and his longtime partner, Dandy Phil Kastel, were the chief owners of the Trop.
Caesar’s Palace was a case unto itself. Its décor and architecture certainly evoked images of ancient Rome, or as comedian Alan King put it: “I wouldn’t say it was exactly Roman—more kind of early Sicilian.” In any event it had a Roman legion of Mafiainvestors, among them Accardo, Giancana, Patriarca, Jerry Catena (one of Vito Genovese’s top aides), and Vincent “Jimmy Blue Eyes” Alo (a longtime buddy of Lansky’s). The biggest investor of all may well have been Jimmy Hoffa and the Teamsters Union’s pension fund, with at least $10 million sunk into the Palace (and another $40 million sprinkled around town). The money was in the form of “permanent” loans and undoubtedly contributed to the retirement of more aging mafiosi than over-the-highway truckers.
In the 1960s billionaire Howard Hughes started buying up hotels, collecting 17 Nevada casinos in all. The big mobsters got out, but most of their underlings remained in place; it was a matter of maintaining required “expertise.” Things however went wrong for Hughes. He had expected to make more than 20 percent on investments from the lavish joints but never did better than 6 percent, and by 1970 his holdings were several million dollars in the red. After Hughes bailed out of Vegas, the mobsters returned to the scene.
Although the boys suffered some convictions in the late 1970s, the FBI launched the real assault on the Mafia’s hold on Las Vegas casinos in the following decade. As a result numerous casinos that had previously been “mobbed up” were sanitized and taken over by legitimate owners. Among those establishments were the Tropicana, the Stardust, Desert Inn, Circus-Circus, Caesar’s Palace, the Fremont, the Aladdin, the Sands, the Riviera and the Sundance. Two others, the Dunes and the Marina, were torn down.
The biggest loss of all to the mob was the Stardust, which was a gold mine to the Chicago Outfit, the skim being absolutely fabulous. It was taken over by the reputable Boyd family, who were surprised by its huge profits, with every penny of income recorded. Ex-FBI agent William F. Roemer Jr., longtime senior agent of the FBI’s organized-crime squad in Chicago and an expert in Las Vegas doings, said, “The amount of skim had been so heavy that the profit and loss statement did not present a true picture of the gold mine that the Stardust was.”The FBI investigations into Las Vegas skimming took a decimating toll on the mob. Organized crime control of the Tropicana Hotel was broken with the convictions of several Kansas City mob chiefs. A second more sweeping probe uncovered control of a number of casinos by Chicago, Kansas City, Milwaukee and Cleveland mobs. Among those netted in the investigation were Joey Aiuppa, the top boss in Chicago; John Cerone, the Chicago underboss; two other Chicago capos; Frank Balistrieri, the boss in Milwaukee, and the top leaders in Kansas City, along with a top figure in Cleveland. All drew huge sentences and probably faced the rest of their lives behind bars.
In 1994 Roemer declared organized crime presence in Vegas was nowhere what it had been, although he said “concerns remain” regarding three other hotels.