The History of the Mafia in Las Vegas, Sin City

The History of the Mafia in Las Vegas, Sin City

Although gambling was around in Las Vegas way before the mob, and had even been legal since the 1930s, it took the greedy imagination and chutzpah of the mafia to turn the podunk little town destined to be known as Sin city into the gambling mecca that it is today.

Las Vegas and the Mafia: Enter the Mafia

A guy by the name of Meyer Lansky gets the credit for being the first mobster to get that greedy little twinkle in his eye for Vegas who actually did something about it. (Al Capone is said to have been interested, but never acted upon the idea.) Meyer was Lucky Luciano’s partner and confidant, and he didn’t feel like getting the blame if Sin City didn’t work out. So he enlisted Bugsy Siegel to get mob excitement and investment moving.

Siegel built the Flamingo with mob money, but he completed work prematurely, before traffic could be built up. When he got nabbed skimming lots off the top of the construction funds, the mafia gave him an ultimatum: give it back, or face the music. The eventual success of the Flamingo was Siegel’s only hope of meeting their deadline, but it didn’t happen in time. So Bugsy faced the music – a nasty execution in a hail of bullets photographed in all its goriness.

Despite its rocky, mafia-prompted start, Las Vegas did grow. Lansky took over at the Flamingo and made it profitable, getting all the glory. Through the use of various fronts, the mafia, with representation from a number of U.S. cities in which they had a foothold, bypassed new government regulations trying to keep them out. Hotels with casinos were erected. Big-name entertainment was brought in, like Frank Sinatra, who was sold a 9% stake in the Sands in an effort to get him to bless the place with his magnetic presence every so often. Lansky’s vision of Vegas as a money machine became a reality.

The idea that Las Vegas could work wasn’t really a stretch. The marvelously profitable Cuban experience the mafia generously partook of before Castro kicked them all out essentially proved it could work, and work well. In fact, it was all that money made from years of success in Cuban gambling that funded the fledgling enterprise of building Sin City.

One might wonder, however, how Vegas avoided implosion, given the potential for squabbles between mafia factions. The answer was a web of contractual agreements giving each casino and its owners a stake in the other places. This had the added advantage of making it very difficult to determine just exactly who was behind what when the law came snooping around.

It was known, however, that Jimmy Hoffa, the famed leader of the Teamsters Union whose grave no one can seem to find, was one of the biggest investors in Ceasar’s Palace. This investment, by the way, came at the expense of the Teamsters’ pension fund.

Las Vegas Without the Mafia: Howard Hughes

During the 1960s, eccentric billionaire Howard Hughes had a hankering for some of those fabulous Vegas profits. He proceeded to get a change in Nevada state law adopted which permitted him to buy up hotels and casinos, which he furiously did. When the dust settled, he owned 17 in all, essentially ending mob control of Vegas for a time. It is important to note, however, that while the big boys left town, their minions remained, maintaining involvement, likely engaging in shadiness, and perhaps, waiting for the day when the mafia would return to power.

Hughes essentially cleaned up Vegas by buying out the mafia big boys while providing the legitimacy of a highly-successful businessman such as himself. Previously, many corporate figures hadn’t wanted to dirty themselves with mafia-controlled Vegas and its sordid history. His whirlwind involvement changed all that.

Hughes dominance in Las Vegas, however, was destined to be short lived. He never made the profit margins he had hoped for because it seems he was never willing to approve capital investments of more than $10,000 at a time, hamstringing his own prospects for success. Eventually, a mere four years after his initial involvement, Hughes left Vegas and sold off his holdings. The mafia then reacquired their grip on Sin City, and some, like Robert Maheu, former government agent and long-time Hughes employee, have even suggested that the mafia engineered Hughes’ exit to that end in coup-like fashion.

Las Vegas and the Mafia: The Mob Returns

By the 1970s, the mob was back in Vegas, but this time, their dominance was short lived. The 80s saw an intense focus by the FBI on disrupting and eliminating mafia interests in Las Vegas. Legitimate owners took over, and then proceeded to make more money than Lansky or any other mobster had ever imagined.

The winning formula was to concentrate on the ‘non-sinful’ aspects of Sin City. Making Las Vegas family friendly greatly improved the bottom line – mega-resorts with thrilling rides, huge replicas of world landmarks, luxurious spas, and world-class dining and entertainment.

Today, Las Vegas is actually a relatively family-friendly travel destination, although of course plenty of opportunities to “sin” remain firmly in place. Casinos are now not just gambling havens, but mega-resorts, complete with fun-filled attractions for the kids and luxuries such as spas and world-class dining for the adults. However, the colorful history of mafia involvement remains. There’s even a museum there dedicated to it.

Oh, and by the way, the mafia aren’t gone from Vegas just because they don’t own the casinos anymore. Prostitution, as well as businesses upon which the hotel industry depends, are still fair game.

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