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How Las Vegas went from mobbed-up town to the center of the entertainment universe

(Stefan Milic/Yahoo Sports illustration)

Once upon a time, the Stardust Casino claimed the title of world’s largest hotel, its 1,000 rooms dwarfing all its competitors on the Las Vegas Strip. It hosted legendary Vegas acts like Siegfried & Roy, boasted clubs that attracted high rollers from all over the planet, and served as the inspiration for the Scorsese classic “Casino.”

But the Stardust fell victim to a wicked combination — changing American tastes, future-minded developers, and 428 pounds of explosives — and in 2007, the once-mighty casino crashed to Earth.

In true Vegas form, the Stardust’s implosion wasn’t a routine civic redevelopment project but a true capital-E Event, complete with fireworks, a massive countdown clock on the doomed building’s sides, and a cheering crowd of thousands reveling in the massive destruction.

In 10 seconds, the building itself was gone. In 20 minutes, the dust had cleared. All that now remains of the Stardust on the site is a small sign deep inside Resorts World Las Vegas, the imposing casino that rose in its place.

All around, up and down the Strip in both directions, Vegas just keeps on rolling. The former railroad depot is now hosting the world’s greatest spectacles, including this weekend’s Super Bowl. No one who ever gambled in the Stardust during its heyday would believe it … but then, no one ought to be too surprised at anything Vegas does next.

When the Mob came to Vegas

The Mob did not create Las Vegas.

Supercharged it, yes. Vaulted it from railroad town to international destination, yes. Invested with enough mystery and hint of danger to keep titillated Midwestern couples returning year after year, absolutely.

But the Mob did not, in the words of Hyman Roth in “The Godfather II," “build a city out of a desert stop-over for GI's on the way to the West Coast.” Instead, says Geoff Schumacher, vice president of exhibits and programs at The Mob Museum in Vegas, the Mob saw a burgeoning business opportunity and decided it wanted in.

“The town existed for 40 years before the Mob in any significant way showed up on the scene,” Schumacher says. “If you watch the movie ‘Bugsy’ or read other books, they suggest that somehow the Mob just walked in out of the desert and envisioned this city.”

The first known non-native to visit Las Vegas was a Mexican scout named Rafael Rivera in 1829. The first whites were Mormon missionaries sent by Brigham Young in 1855. They lasted three years, the first of millions to arrive in Vegas with hopes and leave a little more broken than they arrived.

Vegas is located roughly halfway between Salt Lake City and Los Angeles, and in 1905 a railroad was built that spurred the tiny hamlet’s growth. Another 25 or so years later, two events would shape the city’s future. In 1931, gambling was legalized in Nevada, and around that same time, construction began on the Hoover Dam and a magnesium mine, drawing thousands of workers — and their dollars — to the region.

Most of the early casinos in Las Vegas bunched up at the intersection of Fremont and Main, what’s now the Fremont Street Experience. But several entrepreneurs began casting an eye south, toward a road that was then called the Los Angeles Highway. There, casinos could spread out, offering up pools, showrooms, golf courses, horseback riding to tempt their guests.

One of the first men to see this possibility was Billy Wilkerson, the founder of the Hollywood Reporter and, as Schumacher notes, a compulsive gambler who decided that keeping his losses in-house was better than surrendering them all around. As Schumacher notes in his book “Sun, Sin & Suburbia: The History of Modern Las Vegas,” Wilkerson decided to ditch the prevailing “Western-rustic” theme of most contemporary casinos and build an exotic, European-luxury-style resort.

Wilkerson innovated the now-standard idea of making the casino the center of the hotel property — never let guests go anywhere without having to pass a table or slots — and kept the casino hermetically sealed against the outside world. But after he broke ground in November 1945, he ran into financial problems a third of the way into construction.

Enter: New York mobster Meyer Lansky, who paid $1 million to get in on the deal and sent his man, Benjamin “Bugsy” Siegel, to keep a watch on the proceedings. Siegel would go on to essentially push Wilkerson out of the captain’s chair at the Flamingo, taking the reins for himself … at least until his Mob superiors grew weary of his exorbitant spending. Siegel was shot to death in June 1947, and the Flamingo would go on to become one of the most spectacularly profitable Vegas casinos of the 20th century.

The Flamingo opened up the possibilities of what a Las Vegas casino could be. It also opened up the gates of the city to the Mob.

An aerial view of the newly completed Flamingo hotel complex, Las Vegas, circa 1950. The hotel is now surrounded by developments. (Photo by Keystone/Hulton Archive/Getty Images)
An aerial view of the newly completed Flamingo hotel complex, Las Vegas, circa 1950. The hotel is now surrounded by developments. (Photo by Keystone/Hulton Archive/Getty Images) (Keystone via Getty Images)

Organized crime and Las Vegas: A double-edged sword

“Organized crime in New York, Chicago, Miami, they saw that Vegas was an opportunity to pretend to go legit,” Schumacher says. “There had been illegal gambling clubs all over the country for years. The Mob would pay off the local sheriff and judges, but still, they’d raid the place every so often and shut it down to give the appearance of law and order. Rather than that every couple of months, the Mob decided to emigrate to Las Vegas to get involved with the casino industry.”

Fueled by a postwar boom, a national desire to dip a toe in the waters of sin, and the wealth and organizational management techniques of the Mafia, Vegas exploded in popularity in the 1950s. Every year brought a new casino … and many came with new investment from organized crime. The Desert Inn, the Sahara, the Sands, the Tropicana — legendary names from Vegas lore all opened during this period.

“The presence of organized crime in the casino community was very real,” says John L. Smith, a longtime Vegas journalist and author. “More behind-the-scenes than the movie ‘Casino’ would make it appear, but it was definitely part of the landscape for a long time.”

Movies like “Ocean’s 11” (the first one, with Frank Sinatra and the rest of the Rat Pack) and “Viva Las Vegas” with a peak-of-his-powers Elvis Presley preached the gospel of Vegas, and Americans flocked there to get a taste of forbidden fruit — gambling, late-night parties, “companionship,” all of it. This was decades before the “What happens in Vegas, stays in Vegas” marketing slogan was created, but the truth was evident to every churchgoing couple from Des Moines, every shoe salesman from Savannah, from the moment they stepped off the plane at McCarran International Airport and into the Vegas heat.

The Mob proved quite effective at running the casinos. “The Mob played a big role in turning Las Vegas from a town into a city,” Schumacher says. “What was needed was effective casino experience. Las Vegas and Nevada officials recognized this … to some extent.”

The state’s gaming regulations included a “grandfather clause” that permitted even gaming applicants who had been involved in illegal gambling in other jurisdictions to work in Vegas. Government officials knew they were making a deal with the devil, but the offer was too good to refuse. Anyone who’s done the walk of shame to a casino ATM earlier than expected can guess what happened next.

“Almost from the beginning, the Mob’s involvement was skimming off the top, taking tax dollars out of the state, sending them back to Chicago, New York, wherever, instead of being invested in schools, roads, parks, all the rest,” Schumacher says. “So it was a double-edged sword.”

If you’ve seen “Casino,” you know how the skim worked — trusted Mob envoys inside the casino operation sliced a piece — 5, maybe 10 percent — off the day’s cash revenue, every day. Not enough to be noticed, but enough — with the phenomenal volumes of American dollars flowing in every day — to generate hundreds of millions in untraceable cash.

Plus, there was always enough ambient danger to thrill tourists. One day in 1967, Frank Sinatra, irate at Sands casino owner Howard Hughes, apparently drove a golf cart through a plate-glass window at the Sands, turned over a table — and promptly got the caps knocked off his teeth by a beefy casino boss.

Casino executives, law enforcement officials, union leaders turned up dead … or didn’t turn up at all. (Unlike the movies, most killings happened well away from Vegas. Don’t want to scare off the tourists, after all.) Whispers persisted that the Vegas-based Mob had a hand in every major American event of the day, right up to the assassination of JFK in 1963. Maybe the stories were true, maybe they were all elaborate fiction. Either way, they were very good for business.

Aerial view of las vegas casino, circa 1968, Las Vegas, Nevada, USA. (Photo by Charles E. Rotkin/Corbis/VCG via Getty Images)
By 1968, the Flamingo had company along the Las Vegas Strip, with The Dunes in the foreground and Caesars Palace across the Strip. (Charles E. Rotkin/Corbis/VCG via Getty Images) (Charles Rotkin via Getty Images)

Cleaned out

What brought down the Mob in Vegas? A thousand actions, some tiny, some monumental. American entertainment tastes changed. The cost of doing business in Vegas spiraled. Much like an old restaurant that had seen better days, the mobbed-up casinos became relics of a bygone era. And if there’s one thing Vegas won’t tolerate, it’s standing still while the rest of the world moves on.

Schumacher credits former Nevada governor Mike O’Callaghan, who spearheaded a drive to force the Mob out of Vegas throughout the 1970s and 1980s. It took nearly 20 years, but a combination of state and federal enforcement imprisoned, blackballed and evicted Mob operatives up and down the Strip. Investigations used informants, undercover agents, wire taps, bugs, investigations of shell corporations, all the legislative and enforcement weapons at their disposal … and eventually, it worked.

“Two RICO [Racketeer Influenced and Organized Crime Act] cases in the early ‘80s spelled doom for the Mob,” Schumacher says. “One took down the skim from Stardust, one from Tropicana, and the Mob was driven out of both of those resorts.”

“Today,” says Smith, “we’re as legitimate as Wall Street.”

In the Reagan era, the Mob also faced a dilemma all too familiar for players of a certain level in Vegas: They got priced out of the market. Billionaire developers and corporations could simply outspend the Mob. Once they took over casinos — and began realizing just how profitable they were without the skim flying out the backdoor — developers descended on Vegas, and ever-more-magnificent palaces sprung from the desert sand. The first of these, the Mirage — developed by Steve Wynn in 1989 for more than $600 million — demanded the kind of money the Mob couldn’t muster.

In the Mirage’s wake, innovation and glitz exploded up and down the Strip. Some, like Circus Circus, Luxor, Excalibur and Treasure Island, traded on family-friendly gimmickry. (Look, kids! An exploding volcano, right here on the Strip!) Others, like the Bellagio, the Venetian, the Wynn and the Cosmopolitan, catered to the highest of high-end tastes. The cheap all-you-can-eat buffets and free entertainment faded away, replaced by elite chef-driven restaurants and exclusive clubs. Whenever one casino had success with an innovation — exotic zoos, fine art collections, massive sports books, heavyweight fights, daredevil stunts — others would rush to copy it, an entertainment arms race with no obvious end in sight.

“A casino offers games it’s offered for a very long time, so at some point you have to give people something that feels new, improved, one of a kind,” Smith says. “Las Vegas reinvented itself first as more of a Disneyfication process — that was essentially a failure — so then they turned to these megaresorts. They can be very successful if run right; if not, it’s like the Death Star crashing.”

But in the rush to opulence, something was lost.

LAS VEGAS, NEVADA - MAY 21:  An aerial view shows the Las Vegas Strip including Bellagio Resort & Casino, which has been closed since March 17 in response to the coronavirus (COVID-19) pandemic on May 21, 2020 in Las Vegas, Nevada. It is still unclear when casinos in the state will be allowed to reopen.  (Photo by Ethan Miller/Getty Images)
Today, the Flamingo is surrounded, most closely by the Eiffel Tower of Paris Las Vegas and the fountains of the Bellagio. (Photo by Ethan Miller/Getty Images) (Ethan Miller via Getty Images)

'Vegas was better when the Mob ran it'

“Longtime residents will often say Vegas was better when the Mob ran it,” Schumacher says. “They’re looking back with nostalgia, a time when Vegas was a smaller place. If you were a regular at the Sands, you’d walk in, people would recognize you, comp you a buffet or give you a better seat at a table. You walk into these megaresorts today, you’re one of a million. No one recognizes you, prices are higher, there are not as many freebies.”

These days, the Vegas emphasis is on spectacle — massive, world-class spectacle. Last November, Las Vegas hosted its first Formula 1 race, the height of international sporting prestige. This weekend, the Super Bowl comes to town for what surely won’t be its only visit. Both the NHL’s Golden Knights and the WNBA’s Aces are already champions. The Oakland A’s are likely headed to Vegas, and an NBA franchise could end up there too. The Sphere is a billion-dollar hall that dwarfs any other concert spectacle in human history. Las Vegas bowed out of hosting a World Cup event due to FIFA’s overly restrictive and expensive expectations — Vegas knows a bad deal when it sees it — but the city will almost surely continue attracting marquee events and entertainers in the years to come.

Then again, when it comes to Vegas, who knows what the future holds? What would Sinatra, Sammy, Dino and the rest of the Rat Pack — or their Mob running mates — think of a Super Bowl in Vegas? A race down the city’s streets? A sphere the size of a mountain? What happens when — against all odds — you win bigger than you could have ever imagined?

“Vegas has often had an inferiority complex. Ten to 12 years ago, the NFL wanted nothing to do with Vegas because of gambling, and now we have a team, now we have a Super Bowl,” Schumacher says. “Every generation could not quite envision what Vegas would become in the next generation.”

“The Las Vegas I have awoken to recently is one that is now celebrated by sports leagues that used to hurl epithets our way,” Smith says. “The NFL was built in large part because people like to gamble on sports, and it’s now partnering with the very people they refused to speak to not so long ago. A lot of changes, a lot of ironies.”

The passage of time rolls on, inexorably, in Las Vegas. The days of the Mirage’s famous volcano are numbered because of planned redevelopment. Just days ago, Bally’s officials announced that the legendary Tropicana will be torn down to make room for a new $1.5 billion baseball stadium to host the A’s. Demolition is big business in Vegas, and the Trop’s destruction, whenever it happens, will be another major event in a city full of them.

The road that runs alongside Allegiant Stadium, the site of the Super Bowl, is Dean Martin Drive, named for the Rat Pack entertainer who once bestrode Vegas like a colossus. These days, maybe a handful of players on either team have even heard of ol’ Dino. You might hear “Volare” or “That’s Amore” playing from a hidden speaker, but the classic Vegas standards of the ‘60s are now a fast-fading memory.

Before long, street names and plaques will be all that remains of the mobbed-up Rat Pack era — that, and the vibe that there’s something more going on in Vegas than anywhere else in America. Neon signs flicker on and off, casinos rise and fall, entertainers come and go, but the Vegas spirit — born on the frontier, nurtured under the Mob, monetized by billionaires, embraced by millions — won’t ever run dry. There’s always another wheel to spin, another card to deal, another bet to place. Always.