Las Vegas set itself apart from the world’s gaming hot spots like Reno and Monte Carlo in the 1950s and garnered headlines and greater gaming revenue in the 1960s. Properties like the Flamingo, Dunes, Sands, Stardust, and Desert Inn made huge profits that were regularly skimmed away by the Mob.
The government knew some Nevada casinos had legitimate partners fronting for unlisted owners as early as the 1940s, but the May 1957 assassination attempt on New York crime boss Frank Costello was a watershed moment for both the FBI and the Nevada Gaming Control Board.
Costello was rushed from the crime scene with nothing more than a severe scalp wound, but inside his sleek suit pocket, the responding officers found a ledger with the previous day’s gaming totals for the Tropicana casino. Even the FBI who had previously denied there was an organized crime group or Mafia had to admit this was a serious link to Nevada’s casinos from known crime families.
To its credit, the Nevada Gaming Control Board demanded that new owners be found for the Tropicana, which had been open for less than a month on the Las Vegas Strip, but that didn’t stop Meyer Lansky from transporting cash siphoned from the casino before taxes and transferring it to several crime families.
Not only did the government lose out on taxes, but the money skimmed left the Las Vegas properties with less revenue to expand and improve their facilities. The Mafia’s greed sent Las Vegas into a period of flat gaming revenue in the late 1960s and 1970s caused mostly by a relative lack of growth.
Sarno and partner Nate Jacobsen spent more than a million dollars on the inauguration party for the property that featured Roman columns, red and white decor, and a logo depicting a woman feeding grapes to a man in a toga. The feast included scantily-clothed cocktail servers who delivered 50,000 glasses of champagne, 300 pounds of chunk crab, 3,500 pounds of filet mignon and enough caviar to fill dozens of bathtubs.
The cocktail servers were instructed to greet their guests with a single statement:
“Welcome to Caesars Palace, I am your slave.”
For many guests, the statement was true, and the traffic flow from the party to guest hotel rooms was prodigious. It was a party for the ages and a huge financial success for the casino. Before the opening, more than $42 million in advance bookings were made for the first months of operation by guests eager to see the new property.
Three years later, Jacobsen and Sarno were forced to sell the casino to more legitimate owners after a Federal Organized Crime Task Force uncovered ties to organized-crime figures in New York and New England.
Casinos Go Corporate
Caesars Palace was sold for $60 million to Stuart and Clifford S. Perlman, owners of the Lum’s restaurant chain, which gave the casino a corporate ownership and helped lead the way to a less seedy, more traditional type of business culture.
The change to legitimate casino ownership in the eyes of visitors began several years earlier when reclusive millionaire Howard Hughes arrived in Las Vegas on Thanksgiving Day 1966 and moved into the penthouse suite at the Desert Inn Casino. After taking over a 250 square feet bedroom, Hughes refused to leave (for four years), and eventually negotiated a purchase of the property just four months later.
The public and the Nevada Gaming Control Board were thrilled to have a “legitimate” businessman purchase the property, and unlike other new casino owners, Hughes was allowed to purchase the Desert Inn and several other casinos without ever appearing in person before the board.
He paid $6.2 million in cash and accepted $7 million in outstanding loans to acquire the property, and followed up by purchasing other clubs like the Silver Slipper, which he bought because of the club’s giant revolving high-heel shoe, which cast sparkling lights into his heavily-draped room across the road.
Although Howard Hughes’s ownership gave the illusion of propriety, the Mob was still able to skim significant untaxed cash from the newly acquired clubs. Hughes struggled with finalizing plans for expansion, and although he managed to open the Landmark casino in 1969, he failed to improve most of the existing properties he purchased except the Sands, where a 500-room tower was quickly added.
While Hughes fretted over his building plans at the Landmark, Kirk Kerkorian was busy with his first property, the International Hotel, which he opened in 1969 as the largest hotel in the world. The first two performers to grace the stage at the new property’s showroom were Barbara Streisand and Elvis Presley, and the shows were sold out for 30 days straight, and put the International on the map and gave non-gamblers (and gamblers too) another reason to visit Las Vegas. Later that year, Kerkorian purchased the Metro-Goldwyn-Mayer movie studio and then built the original MGM Grand Hotel and Casino which opened in 1973.
Kerkorian also purchased the Flamingo Casino in 1967, but did little to improve the operation. The Hilton Corporation then purchased the property in 1972 and renamed it the Flamingo Hilton in 1974.
The casino’s first tower was built in 1977, keeping pace with expansions at the Sands, Desert Inn, Dunes, and Sahara. Corporate ownership meant more dollars flowing into properties, and the changes kept Las Vegas afloat into the 1980s.
However, there were significant changes in the economy of Nevada during the 1970s. New casinos were built off the Strip, Downtown, and in other cities like Reno.
Las Vegas retained the lions-share of gaming revenue, but the clubs weren’t as dominant as they had been in the late ‘60s.
In Reno, Harrah’s, MGM, and Harold’s Club had expanding revenues from gaming, and on the Las Vegas Strip, the new Circus Circus casino found a new source of cash with a children’s arcade and big top show.
The brightly painted white and pink building gave Circus Circus a distinctive feel, even more so than Caesars Palace, and it was built by the same person, Jay Sarno. He and partner Stanley Mallin thought the town needed some child-friendly resorts. Parents found they could leave their children in the circus area and play for hours in the casino. What a concept.
Downtown Las Vegas in the 1970s
Although new properties like the Four Queens and Union Plaza opened in Downtown Las Vegas in the 1960s and early ‘70s, it was the Golden Nugget that drew most of the publicity in the Fremont Street area. In 1971, Steve Wynn took his profits from a Caesars Palace-Howard Hughes land deal and bought an interest in the Golden Nugget, eventually taking over controlling interest in 1973.
As the majority shareholder (at just 31-years of age), Wynn began a succession of expansion and renovations at the property and opened the Nugget’s first hotel tower in 1977.
The newly finished casino invited a wealthier clientele to the property with the help of Frank Sinatra as a headliner and pitchman for the operation. The Downtown corridor was greatly improved with the Nugget’s expansion and all the properties in the area benefited.
Across the street, Binion’s Horseshoe Casino brought something else to the area: poker. Although Benny Binion and his family had been offering high stakes gaming at the club since 1951, a poker tournament became the most recognizable link to Binion’s and gambling in Las Vegas, the World Series of Poker.
First held in Las Vegas in 1970, Benny Binion hosted the WSOP at Binion’s Horseshoe as a series of freeze-out high limit cash games where play continued until one player had all the chips. 1970s winner, Johnny Moss, was elected by the other players for winning most of the events which included deuce to seven lowball, five-card stud, seven-card stud, Texas Hold’em, and Razz.
After the first year, Texas Hold’em became the main event with a $10,000 buy-in. Legendary poker player Doyle Brunson won the main event in back-to-back years, 1976 and 1977, strangely enough winning the final hand each year with a seemingly poor starting hand of 10-2.
He parlayed that into the sale of a million copies of his book, Super System.
Since that time, the World Series of Poker has dominated poker magazines, books, TV shows and popular culture. The event itself now runs during several months (at the Rio in Las Vegas) and attracts tens of thousands of players and fans. More than 6,700 players ponied up the $10,000 buy-in for the main event last year and played for a winner’s share of $8 million.
Still, a single poker tournament couldn’t prop up all of the profits in the Downtown area, and most of the small casinos with lots of nickel slot machines and $2 blackjack like the Bird Cage, Mint, Nevada Club, and Pioneer, were closed by the end of the 1970s.
Small clubs along Las Vegas Boulevard like the Jolly Trolley, Centerfold, and Orbit Inn also closed during the 1970s as players gravitated to larger properties that featured nearly free meals, $29 rooms and cheap dinner shows with entertainers like Johnny Carson, Don Rickles, Frank Sinatra, Sammy Davis Jr., Diana Ross, Bob Newhart, Cher and Paul Anka.
It was the beginning of the end for the 1970s, and all Las Vegas offered in the way of cheap fun and gambling.
By the late 1980s, Las Vegas was heading in a new, more spectacular direction.