Organized Crime

Las Vegas in the early 1940s was not an attractive place to do business or live. It was a dirty desert town of rugged, rough residents. Travelers taking U.S. Highway 91 cut right through the city on their way to California. It was not a place for stopping over, until New York City organized crime bosses Meyer Lansky and Frank Costello sent well-known gangster Bugsy Siegel (1906–1947) to Las Vegas. Siegel's mission was to see if Vegas would make a great gambling spot for West Coast gamblers.

Nevada had legalized gambling in 1931 but no one paid much attention except local cowboys and men from nearby military bases. With Siegel's imagination and organizational skills and the Mafia's money, the first gambling palace in Las Vegas opened on December 26, 1946. The Flamingo, located right on Highway 91, was the first of many gangster-financed gambling houses in Las Vegas. The Desert Inn and the Thunderbird were built and along with the Flamingo ushered in a very profitable and legal business for the mob, at least under Nevada law. Highway 91 was transformed into the glitzy Las Vegas "Strip."

By the 1950s the Chicago Outfit had joined New York City gangsters in Las Vegas. The Outfit ran three major casinos—the Stardust, the Desert Inn, and the Riviera. The Hacienda, Sahara, and Fremont casinos were added by Chicago mobsters in the 1960s. The Stardust was home base to the famous "Rat Pack," a group of entertainers including Frank Sinatra (1915–1998), Dean Martin (1917–1995), and Sammy Davis Jr. (1925–1990). Tourists from the West Coast and Southwest flooded into Vegas for an exciting time of gambling, entertainment, and nightlife.

In the 1970s the presence of organized crime diminished in Vegas when the Nevada legislature allowed public corporations (corporations selling stock to the public) to own casinos. Gangsters made millions by selling their casinos. Millionaire Howard Hughes (1905–1976) bought the Desert Inn in 1967.