Oct 27, 20238 min read

From Desert to Sin City: How The Mafia Shaped Las Vegas

The City Of Lights And Its Sordid, Neon-Soaked Past

A rendition of Las Vegas in the 1950s. (Photo made with Freepik. Courtesy of: Peter Deleuran).

Las Vegas, often referred to as “Sin City,” is a place known for its glitz, glamour, and round-the-clock entertainment. But beneath the shimmering lights of the Las Vegas Strip lies a dark and intriguing history, one that traces its roots to the influence of organized crime.

This is the fascinating and controversial story of how The Mafia played a pivotal role in the development of Las Vegas.

The Birth of Sin City Las Vegas, a desolate patch of desert in the American West, was an unlikely candidate for a bustling metropolis. Before the 20th century, it was nothing more than a stopover for travelers on their way to Los Angeles or Salt Lake City.

It was the construction of the Hoover Dam during the Great Depression that first brought attention to this remote corner of Nevada. As workers flocked to the area for employment, Las Vegas began its transformation from a sleepy desert town into an oasis of opportunity.

Photograph of the Hoover Dam (formerly Boulder Dam) from Across the Colorado River; From the series Ansel Adams Photographs of National Parks and Monuments, compiled 1941–1942, documenting the period ca. 1933–1942. Photo taken 1941. (Image source: Public Domain).

The Hoover Dam: A Catalyst for Growth The construction of the Hoover Dam, which began in 1931, had a profound impact on the future of Las Vegas. The dam (originally named the Boulder Dam) was a massive public works project undertaken by the U.S. government to control the Colorado River’s flow and generate hydroelectric power. It was a vital undertaking during the Great Depression, providing much-needed jobs in a time of economic hardship.

Las Vegas was ideally situated to benefit from the dam’s construction. The town was just a short drive from the dam site, making it a convenient place for workers and their families to settle. This influx of people provided the initial boost to the local economy and set the stage for the city’s growth.

Legalized Gambling and Divorce In the early 1930s, Nevada’s legislature made two important decisions that would have far-reaching consequences for Las Vegas:

In 1931, they legalized gambling, becoming the first state in the U.S. to do so.

Nevada also passed more lenient divorce laws in 1931, reducing the residency requirement for divorce from six months to six weeks.

These changes created a unique combination of attractions for visitors — gambling and quickie divorces. Legalized gambling offered a much-needed escape from the dreary realities of the Great Depression. People from all over the country flocked to Nevada, and in particular, Las Vegas, to try their luck at the tables and slot machines. The city’s first legal casino, the Northern Club, opened in 1931, and others soon followed.

A rendition of the inside of a casino in Las Vegas in the 1930s. (Photo made with Freepik. Courtesy of: Peter Deleuran).

The divorce industry, on the other hand, offered a different kind of opportunity. In an era when divorce was stigmatized in many parts of the United States, Nevada’s liberal divorce laws allowed individuals to dissolve their marriages with relative ease. This made Las Vegas an attractive destination for people seeking to end their unions quickly and discreetly.

Enter the Mob The 1930s and 1940s saw the emergence of organized crime families in the United States, and the Mafia began to take a keen interest in Las Vegas. The potential for immense profits from gambling and related enterprises was too tempting to ignore. As a result, the mob set its sights on the burgeoning city.

“What happens in Vegas, stays in Vegas”

slogan and advertising campaign for the city of Las Vegas, Nevada.

One of the key figures in this transformation was Benjamin “Bugsy” Siegel, a charismatic and ruthless mobster who had been involved in various criminal activities, including bootlegging during Prohibition.

Mugshot of Jewish-American mobster Benjamin “Bugsy” Siegel, April 12, 1928. New York Police Department. (Image source: Public Domain).

Siegel recognized the potential for enormous wealth in Las Vegas and decided to invest heavily in the city. In 1946, he opened the Flamingo Hotel and Casino, a luxury resort that was the first of its kind on the Las Vegas Strip.

Las Vegas turns women into men and men into idiots.

Bugsy Siegel

The Flamingo - A Mobster’s Dream The Flamingo was more than just a hotel and casino; it symbolized the mob’s ambition to control Las Vegas. Siegel and his associates invested over $6 million in the project, a massive sum at the time.

Original copy of one of a limited number of invitations to the opening of the Flamingo Hotel and Casino, 25 December 1946. (Image source: Wikimedia Commons). Creative Commons license: CC BY-SA 3.0 DEED.

The Flamingo was luxurious, offering top-notch accommodations, fine dining, and entertainment. It set a new standard for the casinos and resorts that would follow.

Front entrance Flamingo Hotel & Casino 1945. (Image source: Wikimedia Commons). Creative Commons license: CC BY-SA 3.0 DEED.

However, Bugsy Siegel’s venture was plagued with problems. The initial construction costs far exceeded the budget, and the resort struggled to turn a profit. Siegel’s management style was erratic, and his handling of the casino’s finances drew suspicion. Additionally, his penchant for violence and a string of unsolved murders further complicated matters.

As the Flamingo faced financial challenges, the mob saw the need for a more organized and disciplined approach to running their Las Vegas operations. Siegel’s extravagant lifestyle and volatile behavior did not align with the mafia’s preference for discretion and control.

Everybody deserves a fresh start — every once in a while.

Bugsy Siegel

The Skim: A Lucrative Racket As the mob’s influence in Las Vegas grew, so did their ambition to generate colossal profits from the city’s casinos. The key to their financial success lay in a practice known as “the skim”. This was a clever scheme where a portion of the casino’s earnings was discreetly removed from the official accounting books before being reported to tax authorities and regulators.

The skim was achieved through various means. It involved collusion between casino management and organized crime figures, including the mobsters who owned or controlled these establishments.

Rendition of a payoff in a casino in Las Vegas during the 1940s. (Photo made with Freepik. Courtesy of: Peter Deleuran).

Employees, often intimidated or bribed, played pivotal roles in executing the scheme. Cashiers, dealers, and other staff members were instrumental in manipulating the casino’s revenue numbers. This concealed income would then be funneled directly into the mob’s coffers.

The impact of the skim was twofold. First, it allowed the mob to avoid paying taxes on a significant portion of the casinos’ earnings. Second, it enabled the mob to fund their criminal enterprises, which included not only expanding their control of Las Vegas but also operations across the United States.

The Changing Landscape of Las Vegas As more mobsters and their associates arrived in Las Vegas, the city underwent a radical transformation. The Las Vegas Strip, initially a modest collection of casinos, began to resemble the extravagant and luxurious entertainment mecca that it is today. Iconic casinos and resorts such as The Sands, The Riviera, and The Desert Inn emerged, each under the indirect or direct control of organized crime.

Photo of girls at the Desert Inn pool in 1955 from a postcard. Desert Souvenir Supply, Boulder, Nevada. (Image source: Public Domain).

These casinos hosted A-list entertainers and attracted the glitterati of the era. Celebrities like Frank Sinatra, Dean Martin, and Sammy Davis Jr. not only performed in Las Vegas but also became closely associated with the mob figures who ran the casinos. The city became synonymous with both glamour and underworld influence.

Photo of the Sands Hotel marquee in 1959 featuring Frank Sinatra and Joey Bishop. (Image source: Public Domain).

The Establishment of the Nevada Gaming Control Board With the expansion of the casino industry and the rise of the mob’s influence, it was only a matter of time before the federal government and Nevada authorities took notice. The Nevada Gaming Control Board (NGCB) was established in 1955 to regulate and oversee the state’s gaming industry, aiming to bring legitimacy and transparency to the casinos.

The NGCB faced significant challenges in its early years, as it had to confront the deeply entrenched interests of the mob. Many casino operators and employees were hesitant to cooperate with the board, fearing retribution from organized crime figures.

This led to confrontations and battles that played out both publicly and behind the scenes. In 1957, the Kefauver Committee, led by Senator Estes Kefauver, conducted hearings across the United States to investigate organized crime’s influence on various industries, including gambling. The hearings brought to light the extent of the mob’s involvement in Las Vegas and its skimming operations.

Frank Costello, American mobster, testifying before the Kefauver Committee investigating organized crime. (Image source: Public Domain).

Changing Public Perception Despite the efforts of the mob to maintain control and secrecy, the public was increasingly aware of the criminal presence in Las Vegas. The Kefauver Committee hearings and investigative reports by journalists like Hank Greenspun shed light on the city’s dark underbelly.

Public perception of Las Vegas became a growing concern for both the state and federal authorities. The image of the city was inextricably linked to the mafia, a connection that posed a threat to the region’s economic development and tourism.

In response to this challenge, Nevada began to implement measures to clean up its image and distance itself from organized crime. The 1960s saw increased pressure on casino owners to cut ties with the mob and eliminate the skim.

The End of an Era: The Decline of the Mob The 1960s marked a turning point in the history of Las Vegas. Law enforcement agencies and state authorities intensified their efforts to clean up the city and rid it of the mob’s influence. As more information about organized crime’s control over the casinos came to light, public sentiment increasingly turned against the mafia.

In response to growing pressure, the mob began to divest from their casino holdings. Several high-profile mob figures, such as Moe Dalitz and Tony Cornero, sold their interests in Las Vegas properties. This shift marked the beginning of the end for the mob’s control over the city’s casinos.

Howard Hughes and the Corporate Takeover Another pivotal figure in the transformation of Las Vegas was the reclusive billionaire businessman Howard Hughes. Hughes arrived in Las Vegas in the late 1960s, bringing with him a vision that would reshape the city and its image.

From left: Carline Stovall, Howard Hughes, Roscoe Turner and Greta Nissen standing next to a plane. (Image source: Wikimedia Commons). Creative Commons license: CC BY 4.0 DEED.

He began purchasing casinos and resorts, including the Desert Inn, Frontier, and the Sands, and quickly expanded his influence. Hughes’s arrival in Las Vegas marked a significant shift from the mob-controlled era. As a legitimate businessman, Hughes was able to infuse much-needed capital into the city’s struggling casino industry. Moreover, his reputable standing helped to improve the city’s image and attract legitimate investors and tourists.

The Rise of Corporate Casinos With Howard Hughes leading the way, Las Vegas began to transition into a city characterized by corporate ownership of its casinos. The idea of legitimacy and transparency became central to the city’s operations. Major corporations like Caesars Entertainment and MGM Resorts International began to invest in and manage casinos on the Strip.

The 1970s and 1980s marked a period of significant growth for Las Vegas. The city evolved from a hub for gambling and entertainment to a multifaceted destination. Lavish resorts, world-class dining, and top-tier entertainment options were introduced to attract tourists from around the world.

The Transformation of the Las Vegas Strip The Las Vegas Strip, once dominated by mob-controlled casinos, experienced a radical transformation. Iconic mega-resorts such as The Mirage, Excalibur, and The Bellagio began to redefine the city’s skyline. These properties offered a new level of opulence, featuring themed architecture, expansive casinos, and extravagant entertainment.

Front of the Bellagio Hotel & Casino at night from the Las Vegas Strip. 2021. (Image source: Wikimedia Commons). Creative Commons license: CC BY 4.0 DEED.

The Las Vegas Strip also became known for hosting world-class shows and performers. Artists such as Elvis Presley, Celine Dion, and Siegfried and Roy graced the city’s stages, drawing visitors from all over the world. The city’s reputation as a hub for entertainment and luxury only continued to grow.

Las Vegas Today Today, Las Vegas is a city unlike any other. It remains a global leader in the gaming industry, but its appeal extends far beyond casinos. The city boasts an array of world-class restaurants, high-end shopping, and a vibrant nightlife scene. It is a symbol of excess and luxury, attracting millions of visitors from all over the world and it is a testament to the enduring power of reinvention and the ability of a city to rise above its shady past to become an internationally acclaimed destination.