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Cash, Casinos and Organized Criminals

Aug 21, 2014

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The popular myths concerning the mafia and their involvement in the casino business aren’t really myths but legends.

Popular perception is a mysterious beast and popular culture an infection upon parts of it that even customs and immigration officers wouldn’t dare probe. The strange twisted world view that a society can have that seems to rarely reflect the views of the individuals within it, nor make much sense when looked at objectively. Organized crime is one such area where the popular perception, and indeed cultural representation or portrayal, doesn’t quite square with the reality.

The romanticism that creeps into any narrative, report or description of the mafia is palpable, where movies and computer games glamourize, newspaper reports and television coverage seems to glorify, and the general public seems more than happy to accept that the mafia and other criminal gangs are a fact of life rather than a hampering of it. This tacit consent for the criminal activities stems mostly from the prohibition days when the mafia were the supplier of need, not of option. The public have always had a soft spot for those who help them break the law, albeit in minor ways.

Vegas The Mafia Moneybox

Blackjack dealer tells of mafia involvement

• From 1946 to the present day

• Skimming from the top and paying off the bottom

So the portrayal of the mafia on screen, in literature and even in the news media has always tended towards the sympathetic, however graphically they might show the killings or torture that are a necessary part and parcel of organized crime. For all the gritty realism that directors attempt to shoehorn into their latest tv series or movie, the over all impression is always one of codes of honor, snappy clothes and an opulence that trickled down to everyone around them.

Not that this is a portrayal wide of the mark and it highlights the inherent truth behind the mafia’s power base – people. The trickle down economics espoused by President Reagan in the 80s would have sounded very familiar to the mafia who had always allowed some of their gains to spread amongst those in the local community upon whose support they relied for information and support. One of the best centers for that proved to be the casinos of Vegas with its blackjack tournaments and roulette wheels…

Casinos As Centers Of Criminality

The mafia involvement in casinos actually began in the wild days of pre-revolutionary Cuba where Meyer Lansky had made friends with the man who became president, Fugencio Bastista. Legalized casinos allowed many mafia interests, already present in Cuba due to the rum and sugar business, to invest in legitimate business, and make healthy profits. Come the revolution, however, as Castro rose to power, the ban on US investment halted this lucrative revenue stream.

The mafia involvement in Vegas is almost legendary. In 1946 Bugsy Siegel opened the Flamingo with money he had skimmed from pension funds of mafia controlled unions and construction businesses, but the pressure to repay the money proved too high and he was assassinated before he could fully develop the potential of Las Vegas as a money earner. The Flamingo was taken over my Meyer Lansky who not only turned the Flamingo’s fortunes around but also demonstrated that Vegas was not just a good earner but a gold mine.

By the 1950s various mafia families owned casinos, with the Chicago outfit running The Stardust, The Desert Inn and the Riviera, adding the Hacienda, Golden Nugget, Sahara and Fremont over the next decade as the number of visitors to this glimmering entertainment center in the desert began to rise exponentially. This lead to a certain amount of concern that competition would hurt profits and infighting might damage them even more, but by this time the mafia in Vegas were far more a corporate entity than a confederation of crime syndicates.

Lawyers drew up a deal that was so complex and intricate that actual ownership of the casinos was as clear as mud but in actual fact merely gave every family a stake in every other family’s business within Vegas. This was one of the smart strategies that prevented all out war along the strip and made sure that everyone got a piece of an exceptionally big pie. This cooperation between the families throughout the fifties meant that hundreds of millions of unrecorded cash walked out of the casinos and into the coffers of the mafia owners.

Billionaire Makes Waves

What the mafia hadn’t counted on was the reclusive billionaire Howard Hughes who not only managed to effect a change in Nevada law making it impossible for corporations to buy interests in hotels, casinos and resorts, but then bought up 17 casinos and force the mafia out of them. The casinos didn’t perform as well as he’d expected in terms of profits and when he backed out of the business the mafia returned, but not for long as law enforcement and the laws it had to enforce were making changes.

The RICO act and heavy FBI surveillance began to gain the results the authorities had long sought and in the 70s and 80s many of the biggest names in Las Vegas were either chased out or arrested, and worse still some cooperated with the authorities. These turncoats provided information, usually in return for witness protection, that sent many mafiosi to jail and ended the stranglehold that the mafia had retained on the strip, but organized crime still exists in Vegas today despite its new image.

Private casino ownership, and heavy corporate investment, has led to a “disneyfication” of Las Vegas with the emphasis being on a family destination rather than merely a vice ridden sin city for the adventurous. However despite a falling number of visitors and a falling percentage of those visitors gambling there is still a mafia presence in Vegas, it has merely changed faces. The once heavy set Italian connected families with their casino strategy have been replaced with a new wave.

There are gangs from Asia who cheat casinos very successfully and the Russian and Eastern European organizations that are far less flamboyant than their mafia forebears but far more high tech and sophisticated. There will always be organized crime in Vegas because there’s money to be made from it and people willing to facilitate that happening. Law enforcement might shift its attention and make strides against the gangs du jour but not even their most ardent supporter believes you will ever separate organized crime from Vegas, nor vice versa.

Read more about gambling and the mafia.


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