Mafia impact on Las Vegas in early years
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Mafia impact on Las Vegas in early years

Categories: gambling history, offline casinos 20 May 2020 607 0

In 1829, an 18 year-old Mexican scout for the Antonio Armijo Trading Caravan was tasked with finding a new trade route to Los Angeles from Santa Fe, New Mexico. He came onto an oasis in the desert in his search. Brigham Young ordered 30 missionaries to construct a fort in Las Vegas Valley in 1855, and to teach the agricultural techniques of the Paiutes. The Paiutes dismissed the Mormon offerings, and in 1858 the fort was abandoned. The area remained sparsely settled until railroad arrival. Work on first grade railroad into Las Vegas began in the summer of 1904. Because of the water gracefully, a town grew, comprising of cantinas, stores, and lodgings to oblige the railroad laborers.

Las Vegas 1910

In 1910, Nevada passed an anti-gambling law so stringent that even practicing the western practice of flip-ping a coin at the price of a drink was illegal. Underground gaming however started to flourish within weeks. Las Vegas incorporated on March 16, 1911, occupying an area of around twenty square miles. The population of the town was about 800. At the same time, there were 3321 residents in Clark County. By 1930 Las Vegas population had reached 5,165. Shortly afterwards, three events took place that permanently changed the face of Las Vegas, Clark County and Nevada. They also led, as a side effect, to the initiation of Las Vegas Valley as a cash cow for organized crime families across the country. First, gambling was legalised in Nevada on March 19, 1931. Six gaming licenses were issued in Las Vegas a month later, the first going to the Northern Club on Fremont Street in Stocker. Second, it liberalized state divorce laws. The "quickie" divorces could be completed in just six weeks with simpler residency requirements. The residents flocked to Nevada for the short term. Many of them stayed at dude ranches in Las Vegas, the precursors of today 's sprawling Strip Hotels. And third, construction started on Hoover Dam, generating a population boom and boosting the economy of the Valley that was in the grip of the Great Depression. Small-town Las Vegas will soon be on the way to being the world's casino and entertainment hub.

Benjamin Siegel

Benjamin Siegel
El Rancho

After ten years, the primary Strip gambling club showed up when the El Rancho Vegas opened on April 3, 1941. The Last Frontier followed on October 30, 1942. The following Strip property to show up on the scene, in 1946, was the one that is recognized as the first of those upheld considerably by mob cash: Bugsy Siegel's Flamingo. Benjamin Siegel was conceived in Brooklyn in 1905. While growing up he built up a notoriety for having a horrible temper, which earned him the nickname of "Bugsy." As an teenager in New York, Siegel become friends with Meyer Lansky and, with a gathering of other youthful extreme folks, worked the Bug and Meyer Mob.

Meyer Lansky

In the end, they collaborated with future New York City wrongdoing manager Charlie "Lucky" Luciano. Despite supposed contribution in violations extending from bootlegging to kill, Siegel had the option to abstain from being sentenced for any genuine accusations. His captivation by Hollywood drove him to move west to help set up the mob controlled Trans-America wire administration to contend with the Continental Press Service, which gave bookmakers the results of horse races from the nation over. In quest for this goal, Siegel showed up in Las Vegas in 1942. His endeavor was lawful in Nevada, where every single potential customer held region licenses. He joined various endorsers of the administration, each paying a robust charge.

Charlie "Lucky" Luciano

It's estimated that Siegel's income from the Las Vegas bookies was about $25,000 per month. During this brief visit, Siegel came to appreciate the tremendous earning potential of the Las Vegas casinos. In early 1946 Siegel saw an opportunity to establish himself in the Las Vegas gambling business. A Hollywood nightclub owner named Billy Wilkerson had attempted to build a casino in Vegas called the flamingo. The effort faltered and the partially completed resort was sitting idle. Bugsy packed his clothes and money and headed back to Vegas to take over the flamingo project. He was confident that if his personal finances weren't enough to finish the job, his hoodlum friends could be convinced to invest in his dream: building the first truly posh hotel and casino in the Las Vegas desert. Bugsy hired the Del Webb Construction Company of Phoenix to complete the Flamingo. According to the book The Green Felt Jungle, the cost, initially estimated at $1.5 million, ballooned to $6 million. The many reasons cited for the huge cost overrun included Siegel's insistence that the Flamingo be built like a fortress, constructed of steel and concrete where less expensive materials would have sufficed. He also wanted the best in furnishings, importing wood and marble at exorbitant costs. Each guest room even had its own sewer line, adding $1 million to the bill. So soon after the end of World War II, not all of the supplies Siegel ordered Webb to use were readily available; such circumstances proved to be only minor annoyances to Bugsy, who simply turned to the black market for his needs.  

Rapidly running out of his own estimated $1 million, he made numerous return trips to the Midwest and East Coast in search of extra funding. He was able to get his gang-land associates to invest 83 million over time but that still left him in the hole a couple million.

As Bugsy's hoodlum friends see the Flamingo project as a bottomless trap, they cut off their largesse. Some even started to wonder whether Siegel was just an incompetent businessman, or whether something more sinister was behind the Flamingo 's burgeoning cost. Was it possible that Bugsy had sticky fingers, and had his friends stealing? Coming under such scrutiny from his investment partners did not bode well for the gambling tycoon would be, either financially or physically. An event that persuaded Siegel's New York pals that his ego was rising as fast as the Flamingo's debt took place in June of that year. Continental Press Service director James Ragan was gunned down in an attempted attack in Chicago. Surprisingly, the man survived the attack and was recovering when he unexpectedly died in a hospital six weeks later. An autopsy revealed that Ragan had enough mercury in his body to kill him twice over. In spite of an around-the clock police guard, the Chicago Outfit had apparently found a way to spike the dead man's soft drinks with the poison. The Chicago people quickly took over Continental Press, eliminating the need for the mob-owned Trans-America. Still, Bugsy needed his income from the wire service and figured his colleagues liked the extra cash, too. He also needed more money for the Flamingo. He flew to New York to discuss the situation with the board of directors of the Combination. In a stunning presentation, Siegel told some of the most dangerous men in America that if they wanted Trans-America to stay in business, they'd have to give him $2 million, which happened to be the amount he owed Del Webb. That was the deal, take it or leave it. With that he walked out, leaving a room full of gangsters looking at each other in open-mouthed amazement. Back in Las Vegas, Siegel was like a man possessed in trying to get the Flamingo ready for opening. He ordered everyone on twelve-hour shifts and seven-day work weeks. With the population of the Vegas Valley at about a meager 40,000, additional craftsmen from Los Angeles, Denver, San Francisco and Salt Lake City were flown in to supplement the local labor pool. Design defects and poor workmanship continued to haunt construction. Trouble was brewing in Los Angeles too, where the book-invitees were. A snub like that often bodes ill in Siegel 's world for the one excluded.

The Hotel Nacional in Havana

Sensing he might be in trouble, Bugsy flew by himself to Havana to see Luciano. Meeting in the hotel suite of the headman, the conversation finally turned towards the Flamingo. Siegel sang its praises, but Lucky was unimpressed with his underling's descriptive phrases of glitz and glamour. He was more interested in where his partner's $3 million investment stood. Siegel pleaded for more time, a year, to get the Flamingo open again and turn it into the revenue producer lie was sure it could be. Luciano dismissed Siegel with the admonishment that he should go back to Vegas and behave himself. The boss also ordered him to give up the wire service and let the Chicago Mob have the operation to itself. With that, the famous Siegel temper kicked into high gear. In no uncertain terms, Bugsy told Lucky what he could do with his orders, then stormed out of the meeting. Few if any men talked to Lucky Luciano the way Siegel had and lived very long to tell about it. Bugsy would be no exception.  

On March 27, 1947, The Flamingo reopened. It continued operating in the red for the first three weeks and then things started turning around. In May it was in the black for $300,000. After his return from Havana, Bugsy had been apprehensive but the positive financial reports calmed him down. In the end his vision was realized. The Flamingo was on its way to becoming the gold mine which he had foretold. He was sure Lucky would be pleased and the others would have listened to him. Yet the success of the Flamingo was a case of Siegel being too little, too late. On the night of June 20, in the living room of Virginia Hill 's mansion in Beverly Hills, a now confident Siegel was relaxing. She was away on holiday in Paris, conveniently for her, but with him was his trusted friend Al Smiley. Suddenly, from outside the living-room window, rifle shots rang out. Segel was hit in the chest by two slugs. One of them ejected his left eye, which had been found some 15 feet from his body on the floor. Benjamin Siegel was assassinated at age 41. Bugsy was dead but Las Vegas just returned to life.

Morris Dalitz

Morris "Moe" Dalitz

Not long after Bugsy had left the Las Vegas scene permanently, another key player arrived in town. Morris "Moe" Dalitz was born in 1899, in Boston. His father, Barney, operated a laundry, teaching Moe the busi-ness as he grew up. The family moved to Michigan, where Barney opened Varsity Laundry at Ann Arbor, catering to students from the University of Michigan. As time passed, Moe opened a series of his own laundries in Michigan, before moving out in the 1930s to Cleveland. Once there, by getting involved in the bootlegging business and becoming associated with the Mayfield Road Gang he expanded his earning potential. Dalitz had opened many illegal gambling joints by the time prohibition ended. His two careers - legitimate business owner and convicted bootlegger, as well as casino operator - would converge to carry him to Las Vegas. First, Moe's laundry business led him to develop a close relationship with a very important man: Jimmy Hoffa. This happened in 1949, when local Detroit Teamsters

Detroit Teamsters

demanded laundry drivers to have a five-day work week. Laundry owners, Dalitz included, strongly opposed the stance of the union. Negotiations reached an impasse, with each side unwilling to budge. Dalitz, the shrewd businessman, saw a way around the issue. He had the owner representatives bypass the local's negotiator, Isaac Litwak, and reach out directly to its former busi-ness agent and current leader of the Detroit Teamsters, Jimmy Hoffa. Agents of the laundry owners asked what it would take for Hoffa to intervene on behalf of the owners. Hoffa's man said 325,000 would do the trick. The owners agreed. Neither side bothered to inform Litwak of the developments. During a subsequent bargaining session, Litwak was confident he had the owners on the ropes. Late in that meeting the door opened and in walked Jimmy Hoffa. He told the group there would be no strike and he wanted the contract signed on the owners' terms, with no five-day work-week provision. The stunned Litwak had no choice but to comply. In the great scheme of things, this transaction wasn't a particularly big deal. But it did open the door for something much bigger ten years later: multi-million-dollar loans from the Teamster Pension Fund to finance the mob-controlled casinos of Las Vegas. Also in 1949, Moe Dalitz found a business opportunity in Vegas similar to Bugsy Siegel's Flamingo experience. Another proposal for the construction of a Strip hotel and casino was abandoned, and was open to anyone who could get the right money. Dalitz, casino-savvy from running his own criminal business, and three of his Cleveland cronies raised the funds and bought the Desert Inn.

The fourth resort of the Strip opened on 24 April 1950. The 1950s saw the addition of seven more casinos to the Strip, all supposedly backed by Midwest and East Coast mob money. The Sands and Sahara debuted in 1952, the 1955 Riviera and Dunes, the 1956 Hacienda, the 1957 Tropicana, and the 1958 Stardust, respectively.

Last Frontier

One existing property changed names when the Last Frontier became the New Frontier in 1955. During that same time period the population of the Valley grew from 45,000 to 124,000. The '50s also saw an increase in the number of celebrity weddings held in Las Vegas. Among the more notable, Rita Hayworth and Dick Haymes were wed in 1953, Kirk Douglas and Ann Buydens in 1954, Joan Crawford and Alfred Steele in 1955, Carol Channing and Charles Lowe in 1956, Steve Lawrence and Eydie Gorme in 1957, Paul Newman and Joanne Woodward, and David Janssen and Ellie Graham exchanged vows in 1958. 

Moe Dalitz and JimmFy Hoffa combined to bring the first installment of money from the Teamster Pension Fund to Las Vegas in 1959. But the $1 million loan was not beneficial in constructing a hotel and a casino. It financed the Sunrise Hospital which was owned by the Dalitz.

Jimmy Hoffa

To help ensure the new medical facility will have some business, Hoffa worked out a agreement for the provision of medical care between his union members, their employers and Sunrise. Employers agreed to pay $6.50 a month for each union employee to find the medical service provider, Sunrise Hospital, was paid. In turn, the hospital promised to provide basic medical care and set aside five beds specifically for union members. After that successful start, in the 1960s and beyond, more Teamster money found its way to Vegas. Millions of dollars in loans were used to build or expand casinos, shopping malls, and golf courses. This was at a time when most lending institutions wanted nothing to do with the businessmen of the notorious Sin City. In 1966, the Aladdin and Caesars Palace joined the growing number of Strip resorts. Circus Circus, which was financed by the Teamster, opened in 1968.

Circus Circus

In the 1960s more big-name celebrity weddings were held in Vegas. In 1962 Mary Tyler Moore and Grant Tinker were married in the Dunes and in 1963 Betty White and Allen Ludden said their vows in the Sands.


The Dunes hosted its second big marriage of the decade when Jane Fonda and Roger Vadim tied the knot in 1965. The next year, Xavier Cugat and Charo were hitched at Caesars Palace. Two huge weddings occurred in 1967, between Elvis Presley and Priscilla Beaulieu at the Aladdin, and Ann Margret and Roger Smith at the Riviera.


Wayne Newton and Elaine Okamura were wed at the Flamingo in 1968. By the end of the decade, the valley's population had reached 273,000, more than doubling in ten years. As the years passed, Moe Dalitz continued to use his friendship with Jimmy Hoffa to facilitate loans sought by Las Vegas businesses. In spite of his power, Dalitz kept a low profile, remaining an intensely private man. He became heavily involved in charity work, and the American Cancer Research Center and Hospital named him Humanitarian of the Year in 1976. In 1982 the Anti-Defamation League awarded him with the Torch of Liberty Award. Moe Dalitz died of natural causes in the year 1989. As the 1960s wrapped up, Las Vegas was booming. It was a national "open place" for organized-crime groups, many of whom had already established their presence. Yet one of them held a dominant position - Chicago.


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