How Organized Crime Ruled the Casino Industry in Las Vegas

Casino Industry

It was during the prohibition years in the U.S. when the Mafia really flourished financially by selling illegal alcohol in underground bars where they also engaged in prostitution and gambling. In this time, the ties between organized crime and gambling became inextricably linked in the public imagination. 

Today, Las Vegas is quite different from its mob-controlled days with many reputable, well-regulated casinos. There are also thousands of players worldwide who trust real money casino online sites to provide a secure, enjoyable gaming experience. Looking back at history is fun, however, because it gives a glimpse into the early grip of the Mob on the city. 

Organized crime puts down roots

Nevada outlawed gambling in 1910 and by the time it was legalized again in 1931, organized crime had put down roots. During the early 1940s, Las Vegas basically consisted of a few filling stations, outlets selling junk food and some slot machine shops. 

Las Vegas didn’t really fall into Mafia’s hands until 1847 when mobster Bugsy Segal built the first-ever gaming resort in Las Vegas. He was backed by Mexican drug money from Meyer Lansky, an East Coast Jewish gangster. It wouldn’t take long for the desert town to change forever, with the Mafia playing a big part in this. 

Mob bosses rule 

Bugsy Segal and Meyer Lansky had formed the Syndicate, or La Cosa Nostra, with Lucky Luciano and Frank Costello, Italian mobsters. By the end of World War II, La Cosa Nostra’s tentacles had spread across the U.S. 

Bugsy was murdered after being at the helm of the Flamingo after only six months. New underworld associates were brought in to run it and it became a hit. Soon millions of dollars of mob money was being funneled into a string of new joints, with the Flamingo as a model. 

Before the mid-20th century, Al Capone’s Chicago Outfit and the New York City Mafia families had businesses in Las Vegas. The Outfit ran three main casinos – the Desert Inn, the Riviera, and the Stardust. They opened other famous casinos in the 1960s, such as the Fremont, the Hacienda and the Golden Nugget. 

Anthony “The Ant” Spilitro, was the last significant mob figure in Las Vegas during the 1970s and 1980s. 

How the Mafia operated in Las Vegas Casinos

Las Vegas was seen as an “open city” for many Mafia families across the country from the 1940s to the 1980s. Tourists flocked to Las Vegas, drawn by unrivaled gaming, the great nightlife and excellent performers. 

The Mafia had police officers and law enforcers on their payroll and bribed them to look the other way. Casinos were cash businesses and so it was easy to ‘skim’ some of the profits off the top before declaring any money to the taxman. 

Increased competition between many Mafia families meant shrinking profits. The different families from across the country decided to strike a deal whereby each one would receive a profit share from the other’s resorts. This made it almost impossible to identify who owned which resort and every family received a share of the spoils.

Rise of the Mega-Casinos business

In 1966 eccentric billionaire Howard Hughes bought the Desert inn and many other gambling resorts, expelling the Mafia from them. This was the beginning of an era when corporate conglomerates displaced mob interests. 

By the end of the 1970s, Hughes was suffering huge losses instead of profits and left the casino business. The Mafia made a comeback for a short time until the 1980s when the FBI arrested the majority of Mafia members, took their resorts and casinos away from them and charged them with tax evasion and other crimes. 

In 1989, developer Steve Wynn opened the first mega-resort in Las Vegas, the Mirage. The strip began another transformation as old casinos gave way to massive new complexes. 

Las Vegas Casino scene today

Long gone are the days when mobsters had shootouts over the money to be made from running casinos. Through the concerted efforts of governmental agencies, such as the FBI, it no longer mob-controlled and any hint of a mob connection is enough for a casino to lose its gambling license. Visitors continue to stream to Las Vegas today for its casinos and entertainment. 


What was once a dusty, desert city founded by railroad workers and ranchers was changed forever when organized crime ruled. Today Las Vegas is a hub of some of the world’s best casinos, including online casinos that enable enthusiasts to play from anywhere in the world.