Flamingo Hotel & Casino, Founder of Modern Las Vegas

Flamingo Hotel & Casino, circa 1948

Founder of Modern Las Vegas

Long on vision, but short on business acumen, mobster Bugsy Siegel used big mob money and assistance from his girlfriend actress, Virginia Hill, to build the Flamingo Hotel & Casino in Las Vegas. He kick-started modern Las Vegas. Though the world enjoys his vision, Bugsy paid the ultimate price for his lack of business skills.

With visions of grandeur, Siegel allowed the budget for his signature achievement to escalate out of control from 2, 3, 4 and finally $6 million or 14 times more than El Rancho for about the same number of rooms. Las Vegas builder, Del Webb was the beneficiary of those cost over-runs. An astute businessman would have hit the brakes at $3 million when room count was triple that of El Rancho, to open early 1946 and pay off mob loans faster. Instead, after many architectural revisions and bad pre-opening publicity related to its construction material practices, the Flamingo opened Christmas Day 1946 — the worst possible season.

Siegel being publicly investigated by legal authorities didn’t help either. In June 1947 while teetering on bankruptcy, Siegel was suddenly called back to Los Angeles. While seated in his living room, he took two bullets in the head. Though accounts differ, one reasonable hypothesis suggests the mob silenced him due to overselling shares in the Flamingo and for abetting Virginia Hill as she skimmed $2 million of the Flamingo investment money. How ironic, in hindsight. The Flamingo would fetch its owners over $100 billion in revenue by 1991.

Nevertheless, Siegel deserves credit for introducing grand resort architecture oriented to the casino and entertainment experience. With help from his buddy/co-investor/actor George Raft, Siegel raised the bar for lavish Hollywood entertainment in service to the casino. Just before and long after his death, Flamingo lounge acts featured the most famous actors, comedians, singers, musicians and biggest bettors. After his death, Flamingo cash registers really went “ca-ching.”

Duplicating the Flamingo’s moneymaking magic, the mob invested in 11 of the next 14 casino resorts in Vegas. On the Strip there were: Thunderbird (1948), Desert Inn (1950), Sands and Sahara (1952), Royal Nevada, Riviera and Dunes (1955), Hacienda (1956), Tropicana (1957), and the Stardust (1958). By 1960 the FBI, IRS, Nevada Gaming Control Board, and Las Vegas Police Dept were bringing lots of surveillance pressure on the mob to clean up their act. A lot was at stake since Las Vegas had become one of the four leading tourist attractions in the United States and population jumped to 64,000 by 1960.

On 17 June 1960, El Rancho, constructed principally of wood, burned to the ground in two hours. Given that El Rancho was not mob-controlled, rumors of mob arson emerged, though were never proven. Pearl Bailey’s husband was staying at the El Rancho while she guest-starred on a local TV show behind the resort. He escaped successfully.

With legal pressure turning up the heat on mobsters nationwide, casino resort construction on The Strip halted for nearly nine years. That cooling off period happened even though Fidel Castro ended Cuba’s casinos in late 1959, the airport expanded, Senator and President John F. Kennedy made several high publicity personal visits, and Las Vegas Convention Center opened in 1964.

In 1966, the Aladdin opened under mostly corporate ownership. Howard Hughes further legitimized corporate take-over of casino resorts when he moved into the 9th floor of the Desert Inn, and bought out $300 million of mob-controlled casinos. Mostly using funds from a teamster pension fund, the $25 million Caesar’s Palace opened with Neo-Roman architecture and a $1 million party in the same year. The corporate and pension fund image makeover triggered an upward spiral of construction on the Strip. Mobsters found it easier to sell out at a profit, than endure surveillance scrutiny and compete with ever-larger casinos. It was one thing to build and manage a $5 million casino resort, yet another to build and manage $25 to $50 million casino resorts facing corporate competitors.

In 1967, mobster Moe Dalitz was more than happy to sell the Desert Inn to Howard Hughes for a tidy profit. He signaled the end of the Golden Age for mob-controlled casinos on the Strip.

In 1968, Circus Circus opened, becoming the world’s first family-oriented casino resort. In 1969, the International (now called Las Vegas Hilton) opened next to the Las Vegas Convention Center. In 1970, Hilton also bought the Flamingo and city population doubled to over 125,000. In 1973, the original MGM Grand opened (now called Bally’s), as the world’s largest hotel. In 1978, the hit TV show Vegas debuted, creating a weekly prime-time commercial for Las Vegas. The city’s growth prompted development of the Southern Nevada Water Project (now called the Robert B. Griffith Water Project) from 1967 to 1983 to pump more water from enormous Lake Mead.

In 1980 a horrendous fire at the MGM Grand killed 84 people and injured hundreds more. Another large fire at the Las Vegas Hilton months later led to a complete overhaul of the fire code for Vegas resorts. These events contributed to a casino building slowdown until decade-end. The good news is that the last-known vestiges of mob-backed casinos were kicked out of greater Las Vegas. But few Las Vegas watchers could have predicted what came next — its largest growth spurt of monumental trophy resorts ever.

In 1989, the $600 million Mirage opened with a man-made volcano. In 1990, Excalibur took the family-themed casino resort concept to new level with 4,000 rooms. In 1993, the three major casino resorts opened: Treasure Island complete with outdoor pirate battle, the Luxor pyramid and the new MGM Grand with 5,000 rooms and Mike Tyson boxing matches. In 1995, Hard Rock Casino & Resort opened to attract more music celebrities. In 1996, Stratosphere, with America’s tallest observation deck, and Monte Carlo open. In 1997, New York-New York opens with its skyscraper and Statue of Liberty icons. In 1998, the magnificent $1.7 billion Bellagio and Paris-Las Vegas, with its 40% scale Eiffel Tower, open. In 1999, Mandalay Bay and the $2 billion Venetian opened.

Year 2000 brought the completely rebuilt $1.2 billion Aladdin with Arabian Nights theme. In 2003, the El Rancho property that kick-started the Las Vegas Strip, began housing a 33-story, $450 million Hilton Vacation Club timeshare. Casino owner, Steve Wynn, has an even bigger casino resort and art gallery project just north of The Venetian. Now casino resorts on the Strip start at $1 billion to construct.

Return to LAS VEGAS

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.