Nevada Gambling

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NEVADA GAMBLING

Las Vegas in Retrospect

With it's ties to Organized Crime

And Benjamin "Bugsy" Seigel.

Clayton L. Blackwell

CJ350 Organized Crime

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NEVADA GAMBLING GLITCH

Nevada became the first state to legalize casino gambling, but not before it was reluctantly the last western state to outlaw gaming in 1910. At midnight, October First, 1910, a strict anti-gambling law became effective in Nevada. It even forbade the western custom of flipping a coin for the price of a drink. The Nevada State Journal newspaper in Reno reported: "Stilled forever is the click of the roulette wheel, the rattle of dice and the swish of cards." "Forever" lasted less than three weeks in Las Vegas. Gamblers quickly set up underground games where patrons who knew the proper password again applied their skill and luck to games of chance. The illegal but accepted gambling flourished until 1931 when the Nevada Legislature approved a legalized Phil Tobin's gambling. Tobin had never visited Las Vegas and had no interest in gambling. He said the legalized gambling legislation was designed to raise needed taxes for public schools. Today, more than 43 percent of the state general fund is fed by gambling tax revenue and more than 34 percent of the state's general fund is pumped into public education. Legalized gambling returned to Nevada during the Great Depression. It legitimized a small but lucrative industry. That same year construction started on the Hoover Dam Project which, at its peak, employed 5,128 people.

The young town of Las Vegas virtually was insulated from economic hardships that wracked most Americans in the 1930s. Jobs and money were prevalent because of

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Union Pacific Railroad development, legal gambling and construction of Hoover Dam 34 miles away in Black Canyon on the Colorado River.

World War II stalled major resort growth in Las Vegas. But the seeds for future expansion had been planted in 1941 when hotelman Tommy Hull built the El Rancho Vegas Hotel-Casino on what is now vacant land opposite the current Sahara Hotel on the Las Vegas Strip.

During World War II, nearby Nellis Air Force Base grew into a key military installation. Originally built to train B-29 gunners, it later became the training ground for the nation's ace fighter pilots. Many key military personnel assigned to Nellis during World War II later returned as civilians to take up permanent residency in Las Vegas. Today thousands of people are connected to Nellis in the form of active duty personnel, civilian employees, military dependents and military retirees.

The success of the El Rancho Vegas triggered a small building boom in the late 1940s including construction of several hotel- casinos fronting on a two-lane highway leading into Las Vegas from Los Angeles. The stretch of road evolved into today's Las

Vegas Strip. Early hotels included the Last Frontier, Thunderbird (Still standing as the Arubu Hotel & Spa) and Club Bingo.

The El Rancho Vegas was razed by fire on June 17, 1960. As time passed, many other first-generation Strip resorts lost their identity through absorption by new owners, demolition, extensive renovation and name changes.

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By far the most celebrated of the early resorts was the Flamingo Hotel, built by mobster Benjamin "Bugsy" Siegel, a member of the Meyer Lansky crime organization.

Benjamin Hymen Siegelbaum aka "Bugsy" Siegel was born in Brooklyn, New York, to a poor Austrian Jewish family, one of five children. As a boy, Siegel joined a street gang on Lafayette Street in the Lower East Side and first committed mainly thefts, until, with another youth named Moe Sedway, he devised his own protection racket: pushcart merchants were forced to pay him five dollars or he would incinerate their merchandise on the spot.

During adolescence, Siegel befriended Meyer Lansky, forming a small gang whose criminal activities expanded to include gambling and car theft. Siegel reputedly also worked as the gang's hit man whom Lansky would sometimes hire out to other gang bosses. In 1926, Siegel was arrested for raping a woman who had turned down his advances in a speakeasy, but Lansky coerced the victim not to testify.

In 1930 Lansky and Siegel joined forces with Charles "Lucky" Luciano. Siegel became a bootlegger and was also associated with Albert Anastasia. Siegel was used for bootlegging operations in New York, New Jersey and Philadelphia. During the so-called Castellammarese War in 1930-1931, they fought the gang of Joe Masseria; Siegel reputedly had a hand in Masseria's 1931 murder in Coney Island and later had a part in the formation of Murder, Inc. In 1932 he was arrested for gambling and bootlegging but got away with only a fine. Lansky and Siegel were briefly allied with Dutch Schultz and killed rival loan sharks Louis and Joseph Amberg in 1935.

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In 1937 the East Coast mob sent Siegel to California to try to develop Syndicate gambling rackets in the West alongside Los Angeles mobster Jack Dragna. Siegel also recruited Jewish gang boss Mickey Cohen as his lieutenant. Siegel used Syndicate money to set up a national wire service to help the East Coast mob quicken their returns.

Siegel married his childhood sweetheart Esta Krakow, sister of hit man Whitey Krakow, on January 28, 1939. He eventually moved her and their two daughters to the West Coast after his bosses had sent him there, but kept them in the dark about his many extramarital affairs. Four of his mistresses were actresses Ketti Gallian, Wendy Barrie and Marie "the Body" MacDonald, and Hollywood socialite Dorothy DiFrasso. With the aid of DiFrasso and actor friend George Raft, Siegel gained entry into Hollywood's inner circle and is alleged to have used his contacts to extort movie studios. He thereafter always lived in extravagant fashion, as was his reputation, and on his tax

returns Siegel claimed to earn his living through legal gambling at the Santa Anita racetrack near Los Angeles.

Siegel became enamored with a sharp-tongued moll and courier, Virginia Hill. They began a torrid affair. Hill helped Siegel establish contacts in Mexico. The Alabama-born Hill was wealthy in