The Impact of the Mob on Gambling in Vegas

It is an uncomfortable truth that the Las Vegas we know today would not exist without the infamous East Coast mobsters of the mid-1900s. Let’s explore the history of the Strip, and how the Las Vegas mobsters played an integral part in the development of the world’s most famous gambling destination.

Article contents:

• The Birth of Vegas – Bugsy Siegal and the Flamingo
• Vegas in the 1950s – The Mob Takes Over
• Cleaning Up The Strip – Howard Hughes and The Birth of Mega Casinos
• Las Vegas Today

The Birth of Vegas – Bugsy Siegal and the Flamingo

Benjamin Siegal, better known as Bugsy – but not to his face according to the History Channel^[1] – was an infamous New York gangster who travelled to the West Coast in 1946 to take over management of the National Crime Commission’s interests in the area.

After fraternizing with movie stars for close to a decade, Siegal headed to Las Vegas in 1946 after finding out about a casino project, the Flamingo, that had run out of cash and seeing an opportunity to capitalize on the blossoming legal gambling scene in Vegas.

Taking over management of The Flamingo’s build, Bugsy saw the casino rapidly make profit upon opening, after what many call a problematic initial launch – although the Mob Museum suggests this account may be exaggerated ^[2].

The initial cost of the project ballooned from $1 million to $6 million, and it was rumoured Siegal and his lover were skimming off the top. If one thing is known about the East Coast mob of the 1940s, it’s that it was not advisable to steal from it.

Unfortunately for Bugsy, a rumour was all it took, and Siegal was gunned down just a few months after The Flamingo’s opening. While many assume the mob was responsible for the hit, there are numerous theories, and the murder of Bugsy Siegal remains unsolved to this day.

Contrary to popular belief, Siegal did not open the first casino on the Vegas strip. In fact, he fashioned The Flamingo after the already successful El Rancho casino. However, what is for sure is that after Siegal’s death, the mob’s grip on Vegas would only grow.

Vegas in the 1950s – The Mob Takes Over

After Siegal’s death, Meyer Lansky, who financed the project, quickly put some mob-associated businessmen in charge of the Flamingo, and the casino flourished. So much so, that other established quickly followed using the Flamingo as a blueprint.

Big names like the Thunderbird and the Desert Inn had arrived by the 1950s, followed by other mob-connected casinos, including The Dunes, Riviera, The Sands, and Stardust. In just a few years, the Las Vegas Strip had a total facelift thanks to an influx of mob and Teamster investment.

It was well known that the main Vegas venues had mob ties, and as a result, no banks would consistently loan to operators on the Strip, according to Online Nevada^[3].

However, business was booming, with millions of visitors and a plethora of Hollywood A-listers frequenting Vegas by the mid-1950s. The presence of the Rat Pack and many other top-level performers ensured Vegas was known as more than just a casino town.

Cleaning Up The Strip – Howard Hughes and The Birth of Mega Casinos

As the 1960s arrived, the mob-ran casinos in Vegas were going from strength to strength, but there was opposition. As well as law enforcement, the editor of the Las Vegas Times, Hank Greenspun, began a campaign to expose the criminal underbelly of many of Vegas’ top casino venues.

Simultaneously, multi-millionaire Howard Hughes arrived in Vegas in 1966 and immediately made an impact. When asked to vacate his hotel room at the Desert Inn, Hughes instead opted to purchase the hotel outright, the first of an estimated $300 million investment he would ply into Vegas.

For the next two decades, criminal and legal investment battled it out on the Vegas strip, but by the mid to late 1980s, the era of the Las Vegas mobsters had come to an end. In 1983, the Stardust was the casino shut due to illegal activity, according to a New York Times article of the time ^[4].

Following this, the rise of the mega casino began in earnest with the arrival of the Mirage in 1989, and the Excalibur and the new location of the MGM Grand in 1990. This was followed by numerous huge casino resorts over the next decade, creating the familiar landscape of modern Vegas.

Las Vegas Today

Las Vegas has undergone many facelifts over the several decades since the Flamingo’s official launch. One thing that has maintained is the steady stream of gamblers from around the world and big-name celebrity performances occurring up and down the Strip.

Vegas today is vastly different to the Rat Pack and Mafia-dominated world of the 1950s. As the Las Vegas Advisor states^[5], you may see East Coast mobsters in Vegas, but if you do, they’re on vacation.

References:

1. [1] Andrews E. (2016) ‘9 Things You May Not Know About Bugsy Siegel’, HISTORY. Available at: https://www.history.com/news/9-things-you-may-not-know-about-bugsy-siegel (Accessed 9.12.23)
2. [2] Apoyan J. (2021) ‘Separating fact from fiction on the Flamingo Hotel’s 75th anniversary’, The Mob Museum Available at: https://themobmuseum.org/blog/separating-fact-from-fiction-on-the-flamingo-hotels-75th-anniversary/ (Accessed 9.12.23)
3. [3] Green M. (2010) ‘Las Vegas Strip: The First Boom’, Online Nevada Encyclopedia Available at https://www.onlinenevada.org/articles/las-vegas-strip-first-boom (Accessed 9.12.23)
4. [4] Turner W. (1984) ‘U.S. and Nevada Agents Crack Down on Casinos’ The New York Times Available at: https://www.nytimes.com/1984/01/28/us/us-and-nevada-agents-crack-down-on-casinos.html (Accessed 9.12.23)
5. [5] Curtis A. (2023) ‘Is the Italian Mafia Still Active in Las Vegas?’ Las Vegas Advisor Available at: https://www.lasvegasadvisor.com/question/the-mob/ (Accessed 9.12.23)