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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.
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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.
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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.
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One exception in the ‘60s was Jay Sarno’s dream of building an opulent, glitzy casino that truly catered to wealthy players. With the help of loans from the Teamsters Central States Pension Fund, Sarno opened Caesars Palace in 1966.
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:
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.