How Organized Crime Once Ruled the Casino Industry

Part of the reason that casinos and gambling, in general, get such a bad rap is because of their ties to organized crime. At one point in time, particularly in the 1930s, the mob had their hooks very deep into a lot of different casinos and poker rooms, tarnishing their reputation and forever marrying gambling and gangsters in the imagination of a lot of people.

In this day and age, the mob’s influence is greatly diminished, especially in the more reputable and regulated casinos. Still, it’s fun to go back and look at the history of organized crime and gambling, if for no other reason than it gives you a better understanding of the history of Las Vegas and a lot of references in a number of mafia movies.

Prohibition and the Mob

You can pretty much count on organized crime, getting their hands into any type of money-making endeavor. Just because our story of the mob begins in the days of prohibition, it’s not hard to see criminals looking over the Earl of Sandwich’s shoulder as he played cards with one hand and ate with the other. Nor is it unlikely shady influences were at play in ancient China and India and wherever else gambling happened.

Still, we’re focused in on the history of organized crime in the United States and a good really place to start with that is in Prohibition. For those reading this who may not know, from 1920 to 1933, it was illegal to produce, transport, import, or sell alcohol in the US. In some places, it was even illegal to consume alcohol entirely.

Fortunately, this ended with the Twenty-First Amendment to the Constitution, but for thirteen years, the entire US was a dry place to be. Except it wasn’t. “Thanks” to some criminals, including the mafia, an entire black market was built up around bootlegging and selling liquor to folks when it was completely illegal.

By the 1920s, the mafia was already into gambling, prostitution, and theft. However, they really started to flourish during Prohibition because they were making so much money off of it (money, that, oddly enough, the US was not taxing and could have used during the Great Depression.)

Anyway, all of this is to say that as the mob stepped up their selling of illegal alcohol. The mob also used underground bars to engage in prostitution and gambling. Hence, during this time, the ties between organized crime and gambling began to strengthen.

Mob Influence in Sin City

So for thirteen years, illegal liquor is giving the mafia a license to print money. Make no mistake about it, part of where the mob was operating was in Nevada, including a city called Las Vegas, which had a thriving illegal gambling business, much of it fueled by workers from the Hoover Dam.

Despite the dangers, Hoover Dam workers were drinking banned liquor and making trips to Las Vegas to gamble. While the local legislature could do nothing about Prohibition, they realized there was money to be made by making gambling legal and passed laws to do so.

This began a seesaw battle between the Hoover Dam workers and the government, who tried to prevent people from going to Las Vegas to gamble, but it was all for not. Eventually, Las Vegas became the first city that the Hoover Dam powered.

Still, Las Vegas was not mafia territory until 1947. In 1947, Bugsy Siegel funneled money through Mormon-owned banks (for legitimacy) and built the Flamingo.

Hailed as the first of the big resort hotels along the Las Vegas Strip, it was initially unprofitable and saw a lot of pressure from local law enforcement.

Then, six months after it opened, Bugsy Siegel was killed by a hail of gunfire and left in front of his home (probably because he was stealing from the casino, but that’s somewhat beside the point…) Siegels’ boss, the famous “Lucky” Luciano, brought in more of his associates to run the Flamingo and places like the Thunderbird and Desert Inn.

Once the Flamingo was profitable, it showed the money possibility of Sin City.

More mafia interest soon followed, and not too long afterward, those with mob ties opened the Sahara, Sands, Dunes, Riviera, Tropicana, and Stardust and funneled in millions of mob-connected dollars to build and run them.

Just like that, Las Vegas became inextricably linked to the mob and their underhanded ways of making money. That didn’t stop droves of people from showing up to the jewel in the desert, enjoying the Rat Pack, and feasting on cheap eats. It also didn’t stop the likes of Robert Kennedy from trying to take the casinos down to end the mob, but it was clear he was not successful.

Where the Money Came from to Build Las Vegas

Many mob families across several cities all contributed to the building of Las Vegas.

Some sources of money are more unusual than you might think.

Because I am from Kansas City, I always found it interesting that movies like Casino mention that casino heads were reporting “the boys in Kansas City.” Most people in Kansas City know that there is some history of organized crime around the Kansas City area, but the ties to Las Vegas are interesting and somewhat deep.

Like Chicago (which also had deep ties to organized crime in Las Vegas), the organized crime in Kansas City has its root in the Italian-American mafia. These ties start with the DiGiovanni brothers, who came to Kansas City from Sicily in 1912. However, these ties to Las Vegas really enter the picture when Nicholas Civella becomes the boss in Kansas City.

Using money from the Teamsters, Civella (who was imprisoned for gambling on the Kansas City Chiefs win over the Minnesota Vikings in Super Bowl IV like any good Kansas Citian) helped to fund the Tropicana and other casinos. Because of this involvement, places like Kansas City are mentioned in the earlier days of Las Vegas’s growth.

It’s also interesting to note that Civella and his brother Carl were also indicted as recently as 1981 for illegally skimming cash from three casinos. It’s good to know that KC is known for more than BBQ.

Organized Crime and Casinos Today

Thanks to efforts of several men, starting with reclusive billionaire Howard Hughes in the late 1960s, the influence of the mob has lessened in the past few decades.

As recently as the late 1990s, organized crime could still be felt in the city, but, for the most part, the FBI has worked tirelessly to prevent the spread and resurgence of organized crime in and around Las Vegas (and really all casinos.)

As long as there is money to be made in an activity, organized crime will find some way to make money off it. That’s just the way things work.

However, gone are the days when mobsters were shooting each other over the money to be made from running the casinos (at least en masse.) Also, overall, the systems put in place to prevent fraud and corruption are making it more difficult for gangers to operate in the open.

If you look, the FBI still does make some arrests related to gambling, but they tend to be smaller operations well away from established casinos. If you are a fan of true crime (or economic crime for that matter), that may come as a disappointment. For the rest of us, it means that Las Vegas is a lot safer place to visit than it was in the 50s, 60s, and 70s.

Conclusion

The history of organized crime and casinos is long and rich. The mafia and other groups have long looked at gambling as a great source of income and money laundering and, because of that, were more than happy to help fund Sin City and make it the adult playground that it is today.

This money came from all across the country, with various families who might not otherwise cooperate, putting down casinos right next to each other. It even came from places few would consider dens of gambling, like Kansas City and Chicago.

Still, like all things, the ties between organized crime and casinos is a cyclical thing. Through the concerted effort of governmental agencies like the FBI and casino owners who were not in the mob (or closely tied to them), Sin City has transformed itself from a mob-controlled hedonistic paradise to a non-mob-controlled hedonistic paradise.

That doesn’t erase the tie of the mob to Las Vegas (or gambling in general.) For some, the influence of one over the other are still very fresh in their mind. Fortunately, that’s all in the past and something we can only read about in books or watch in the movies.

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