The Mafia in Las Vegas
Gambling has always been a very important business in the Mafia. From card games to betting on horses and other sports, the Mafia has earned cash from all of them. They operated many illegal and luxurious gambling operations throughout the United States. Police officers and law enforcement agencies were in the payroll of the Mafia Bosses and ignored the gambling operations. However, a major event occurred which forever changed the history of gambling and casinos in the United States. The state of Nevada legalized gambling in 1931.
Even though gambling had been legalized, no one paid much attention except the local cowboys and some men from nearby military bases. Las Vegas was a dirty town in the middle of the desert with a few gas stations, greasy junk food diners and a few slot machine emporiums. Las Vegas in the early 1940s was not an attractive place to do business or live. The Mafia didn’t catch onto the huge moneymaking potential of Las Vegas until after World War II ended. Al Capone had eyed the town with great interest but never got onto completing his plans of turning it into a hotel and casino haven for tourists and travelers.
Las Vegas remained Mafia free until the Mafioso Meyer Lansky and Bugsy Siegel realized the potential for Las Vegas. The timing could not have been better. Before the formation of Las Vegas, American tourists looking for a great time had to go all the way to Cuba. In Cuba gangsters were welcomed by the corrupt Batista regime, casinos were plentiful, and the profits were huge. Around a decade after the opening of the first casino in Las Vegas, Fidel Castro’s Revolution swept Cuba. So, the people were left with no other alternative for legal gambling than going to Las Vegas.
With Siegel's imagination and great organizational skills and the money of the Mafia, the first gambling resort of Las Vegas - The Flamingo - opened on December 26, 1946. It was the first of many Mafia-financed resorts. Las Vegas proved to be a very profitable and legal business for the Mafia. Once a dull desert town, it now became the glitzy Las Vegas "Strip."
Lansky, who did not wanting to be the one blamed if the Las Vegas plan didn’t go well, had enlisted Bugsy Siegel. Siegel’s job had been to raise cash and enthusiasm from the Mafia Families. Things got off to a shaky start when the Flamingo was forced to open ahead of schedule due to the pressuring of the Mafia. Las Vegas wasn't so famous at the time and there wasn't much tourist interest. Siegel had other troubles too. He had skimmed off huge sums of money from the construction money and the pension funds of the Mafia-controlled Unions. After this discovery, the Mafia demanded the money back and gave a deadline. Bugsy's hopes were pinned on the success of the Flamingo. Due to the bad start, the Mafia Families believed he couldn't return the cash and so in retaliation got his assassinated.
Lansky took over the Flamingo and turned its fortunes around. Within the year, the Flamingo was very successful and had already earned a profit of many times the investment. Lansky obviously took all the credit for this. This success the stage for more for more of the Mafia to arrive in Las Vegas. By this time, more than 50 million dollars had been taken from the pension funds of the Union, this time with the Mafia's approval.
By the 1950s the Chicago Outfit had also joined the New York City Mafia Families in Las Vegas. The Outfit ran three major casinos—the Stardust, the Desert Inn, and the Riviera. The Hacienda, Golden Nugget, Sahara, and Fremont casinos were added by them in the 1960s. Tourists from all over America and later the world, flooded into Las Vegas for the excellent gambling, entertainment, and nightlife.
As more and more Mafia Families were building resorts, concerns arose about how the increased competition would affect the profits. The various Mafia Families from all over the country eventually agreed on a deal that would give each an interlocking share in the other’s resort. By the time the lawyers legalized the deal, it was nearly impossible to tell who owned what. Whatever happened everyone got a piece and this piece was huge.
The 1960s was a time of fall for the Mafia 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 hotels, casinos and resorts. He bought 17 resorts and forced the Mafia out from them. By the next decade, Hughes got out of the casino business after his ventures were not performing as the way he had expected. He had been hoping hoping on huge profits but he actually lost money overall and was a few millions in the red. The Mafia involvement in Las Vegas casinos returned but was short-lived this time.
In the 1980s there was a wide-scale attack on Mafia interests in Las Vegas by the FBI. Mafia-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 hot spot. Most of the Mafioso involved were arrested and faced long prison sentences, probably for the rest of their lives.