A Brief History of Casinos and the Mob

A Brief History of Casinos and the Mob

02 May 2013 | 06:42 Author: Seth Shafer

The recent FBI indictment of 34 people tied to an underground poker and sportsbetting ring that hosted such stars as Leonardo Di Caprio, Alex Rodriguez and Tobey Maguire naturally drew a lot of attention in the media.

Add in a connection to high-level Russian mobsters and it's the perfect story for a splashy headline.

The truth, though, is that the Cosa Nostra -- or, more simply, the Mob or Mafia -- has gone hand-in-hand with gambling, casinos and Las Vegas for, well, centuries.

Much of the foundation of Las Vegas was built on Mafia ties, from loans to build many of the casinos to the muscle and influence to ensure profits kept rolling in.

Las Vegas is famous for its past mob ties but even modern casinos in Macau are plagued with rumors and hints of ties to "triads" -- organized gangs that are the Chinese equivalent to the Mafia.

Those triads continue to battle it out for turf rights to some of the enormous profits generated by Macau’s casinos.

But the real history of the Mafia and casinos revolves around Las Vegas with dozens of notable American Mafia namesakes - and a few celebrities including Frank Sinatra - playing a starring role in the emergence of Vegas as the gambling center of the universe.

Prohibition Opens the Door

The American Mafia were active as early as the 1800s but really came into power in the early 1900s with Prohibition playing a key role.

The mob was able to essentially print money by making and selling illegal alcohol during Prohibition and used their growing wealth and influence to expand into other lucrative areas.

Those areas? Prostitution, loan sharking, drug trafficking, numbers rings and sportsbetting operations.

Mafia kingpins such as Meyer Lansky and Bugsy Siegel moved into full-fledged casino operations in the 1930s and 1940s.

The moves included opening up legal casinos in Cuba until Castro came to power after the Cuban Revolution and banned all American investments.

Their attention then shifted to Las Vegas, which offered a chance to legally take a crack at the casino business once again.

Siegel Murdered, Lansky Takes Over

Siegel convinced assorted crime bosses to invest in the Flamingo in Vegas but never reaped much fruit from the labor.

Siegel lost massive amounts of money on the project with rumors that it eventually led to a hit being placed on him that saw him murdered in Beverly Hills in 1947.

Lansky and other mobsters would take over the project, which quickly turned profitable and helped attract other mobsters to the growing gambling Mecca in the desert.

Lansky would go on to own an interest in the Flamingo casino for the next 20 years and played a key role in the transfer of mob power in Vegas.

Essentially power went from the original New York families that set up shop in Vegas to many of the mafia members from the Midwest (especially Chicago), who would go on to play a larger role in the development of Vegas in the 1950s and 1960s when the Mafia was at the height of its power in Sin City.

Perfect Laundromat for Money

Casinos not only offered potential profits from their operations but were a perfect way to launder money from other illegal activities.

Mob ties to labor unions and constructions firms let them profit from nearly every facet of business in the Las Vegas casino industry including collecting protection money and skimming off money whenever possible.

Vegas casinos with mob ties during the era included the Flamingo, the Aladdin, Circus Circus, the Desert Inn, the Dunes, the Riveria, the Sands and Tropicana.

Virtually every casino in Las Vegas had some sort of tie to the Mafia well into the late 1970s when efforts by law enforcement to finally root out the mob began to take hold.

Today's Vegas Unrecognizable

Today’s Las Vegas would be virtually unrecognizable to the mobsters of the 1940s and 1950s that helped put Las Vegas on the map.

The majority of casinos in Las Vegas today are owned by large, publicly-traded companies that deal more in pleasing investors with attractive price-to-earnings ratios and free cash flow -- a far cry from the anything goes atmosphere that prevailed when the mob ruled Vegas.

About the closest you can get to the Mob in Vegas today? A $53 tour through the Las Vegas Mob Museum.

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