Vegas Myths Re-Shattered: Howard Hughes ran the mob out of town

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Published on: January 26, 2024 at 08:17 pm.

Last updated on: January 25, 2024 at 05:02 h.

Editor’s note: “Vegas Myths Busted” is published every Monday, with an additional Flashback Friday edition. Today’s post in our ongoing series originally ran on September 18, 2023.


In 1967, billionaire Howard Hughes bought the Desert Inn from Moe Dalitz, a Cleveland syndicate member, only to avoid being evicted from his penthouse suite. Hughes found he loved owning Las Vegas casino resorts. So he added Sands, Frontier, Silver Slipper, Castaways and Landmark to his new collection.

Howard Hughes
The brash and provocative billionaire Howard Hughes, believed to be the richest man in America, was the Elon Musk of the 1940s. (Image: Turner Classic Films)

And this It’s what drove the Mafia out of Las Vegas. Except, not really.

What brought the Mafia out was mostly the Nevada Corporate Gaming Act of 1969.

This transformative legislation, an amendment to the Gaming Control Act, allowed companies to own casinos by limiting licensing requirements to a few key executives. Before its passage, every owner/shareholder had to obtain a license.

On the 2021 “Mobbed Up” podcast, former U.S. Senate Majority Leader Harry Reid called corporate gaming law “the salvation of Las Vegas.”

“We’ve hit some bumps along the way, but overall, the Corporate Gaming Act has saved us,” Reid said shortly before his death.

Incidentally, Reid once served as chairman of the Nevada Gaming Commission (NGC), and in that role, he had a well-publicized meeting with Chicago oddsmaker Frank “Lefty” Rosenthal.

You may remember this incident from its dramatic depiction in Martin Scorsese’s 1995 film, casino, The screenshot is shown below.

Robert De Niro, Oscar Goodman
Robert De Niro, who plays Lefty Rosenthal’s live-in Ace Rothstein, argues with a senator played by Dick Smothers in the film. casino. In an interesting casting choice, Rothstein’s lawyer is played by Rosenthal’s attorney, Oscar Goodman (right), who served as mayor of Las Vegas from 1999 to 2011. (Photo: Universal Pictures)

Hughes only helped

Hughes helped reduce mob ownership by giving the bad guys six lesser casinos in Las Vegas to own for four years.

But, said Las Vegas Mob Museum Vice President of Exhibitions and Howard Hughes biographer Jeff Schumacher Nevada Public Radio In 2016, “there is plenty of evidence that even after he bought a chain of casinos on the Las Vegas Strip, the mob was still embezzling his money from the same casinos he bought them from.”

In addition, mob ownership of rival casinos continued unabated, while the movie studio and former airline tycoon played the role of Las Vegas hotelier.

Caesars Palace had just opened in 1966 thanks to a construction loan from the mob-linked Teamsters Union pension fund. When its owner, Jay Sarno, sold the property three years later amid a federal investigation into its financing, it went to Clifford and Stuart Perlman. According to the Mob Museum, they secretly used Miami mobster Meyer Lansky as a hidden investor.

Hughes tried to buy Caesars Palace along with Stardust and Riviera, but never closed those deals due to pressure from the federal government to halt his gaming purchases.

The year Hughes died, 1976, was also the year Lefty Rosenthal took control of the untaxed stolen casino revenue at the Stardust, Fremont, Marina, and Hacienda casinos.

So no, Hughes didn’t run the mob out of town.

Nevada Black Book
The Nevada Black Book contains the most notorious gambling scams of the past four decades. This was the entrance of gangster Tony “Ant” Spilotro. (Image: Cardplayer.com)

Throw the book at them

Just as influential as Hughes was the cumulative effect of the so-called “Black Book.” Created by Nevada gaming regulators in 1960, it is the famous list of suspected gang members, cheaters and others excluded from entering the state’s casinos.

Officially called the Excluded Persons List, it included names such as Nick Civella, who once led the Kansas City crime family, former Chicago mob boss Sam Giancana, and Tony “The Ant” Spilotro, an enforcer believed to be responsible for approximately two people. Dozens of murders.

By the 1980s, Nevada Governor Michael O’Callaghan helped extricate remaining mob influence from casino ownership. He did this by appointing members to the Nevada Gaming Control Board (NGCB) who would be more resistant to his bribes and threats.

But the mafia actually Still In Las Vegas. Although they no longer own casinos, they can be found infiltrating side networks such as illegal drugs, prostitution, money laundering, and loan sharking.

Look for “Vegas Legends Busted” every Monday Casino.org. To read previously debunked Vegas Myths, visit VegasMythsBusted.com. Do you have a suggestion for a Vegas legend that needs busting? Email corey@casino.org.

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