During Nevada’s 1957 legislature, State Senator Kenneth Johnson (R-Ormsby), voiced his concerns about some of the state’s gambling licensees* simultaneously co-owning Cuban casinos.

He feared that:

• Nevada licensees might form alliances with U.S. mobsters in Havana, who primarily ran gambling there

• Nevada licensees might use those relationships to hide mob interests in their Silver State gambling enterprises

• U.S. lawmakers might grow intolerable of the political ties between Nevada licensees/their agents and the Cuban government

• U.S. lawmakers might, therefore, pass a law that eradicates legal gambling in Nevada

“I don’t like to see them use the stamp of respectability given them by Nevada as a magic wand to go into similar business ventures in other part of the world,” Johnson said (Reno Evening Gazette, Jan. 26, 1957). “From now on I’m going to dedicate my efforts to protecting Nevada’s gambling monopoly.”

Johnson, therefore, was tasked with studying the effects on the state of its licensees being involved in Cuban gambling.

Potential Stain On Nevada

Before he could report his findings as planned, prior to the next (1959) legislative session, events took place that forced Nevada’s gaming regulators to take a stand immediately.

In December 1957, Albert Anastasia was murdered. He’d been a boss of the Giambino crime family and head of Murder, Inc., the Mafia’s enforcement branch that was founded by notorious, New York mobster Meyer Lansky, who also was an associate of Charles “Lucky” Luciano.

New York police were investigating the angle that mobsters involved in Cuba’s gambling industry, Lansky in particular, had Anastasia whacked because he’d tried to horn in on that territory.

Cuba Gambing Exposé

In March 1958, LIFE magazine published an article, “Mobsters Move in on Troubled Havana and Split Rich Gambling Profits with Batista.” The subtitle was, “Old Familiar Faces from Las Vegas Show Up in Plush New Casinos with Plenty of Fast ‘Action’ to take Tourist Dollars.”

Of the surreptitiously taken photos in the piece, one depicted Meyer Lansky and a woman leaving the Riviera casino. The description noted that he carried a “satchel reported to have contained $200,000 from cashier’s office” and went on to state, “Lansky was returning to U.S., where he was picked up for questioning in the Anastasia murder case.”

Meyer Lansky, known as the mob’s accountant, had gambling interests from coast to coast in the United States and had been a key player in the Mafia’s development of Las Vegas. Another image showed Meyer’s brother, Jake Lansky, in Cuba’s Nacional casino.

Spotlight On Silver State

The LIFE article stated Nevada’s casino industry was spotless: “Ever since the Nevada boom hit full stride in the ’40s, the gambling mob has been ‘legit,’ shunning the back streets and peepholes, running scrupulously honest tables, keeping books and paying income taxes.” (This was partially valid.)

The piece, though, also revealed that some Silver State licensees were entangled with major mobsters in Cuba, where the industry wasn’t so clean. (This was true.)

The Lanskys managed Cuba’s Nacional casino while owner Wilbur Clark, co-owner of the Desert Inn in Las Vegas, was the front man and three other Desert Inn shareholders were investors. Meyer also owned a piece of the action at the Havana Riviera casino with three Nevadans tied to the Sands and the Fremont hotel-casinos in Sin City.  

The other Nevada gaming licensee involved in Cuban gambling was Clifford Jones, the co-owner of the Thunderbird Hotel in Las Vegas, who owned a percent interest in the Havana Hilton casino.

“Nevada, which has already been and is under fire, cannot stand idly by when licensees participate in activities which in any way bring notoriety or discredit to the state,” the Nevada Gaming Control Board (NGCB) wrote in a report (Reno Evening Gazette, April 25, 1958).

The rumor in Cuba then was that the all-powerful in Las Vegas orchestrated the LIFE exposé and were supporting Fidel Castro to collapse Havana gambling. Many Nevada gamblers didn’t like the industry’s booming success in the island nation where the swanky hotels and casinos were larger than any in Las Vegas.

In Or Out?

The LIFE article spurred the Silver State’s gambling regulators to act. In April, they demanded that the eight licensees with financial interests in Cuban casinos choose Nevada or Cuba, as they no longer could operate in both places.

All of the gamblers selected Nevada and claimed they’d divest their Cuban holdings but noted it might take some time.

A new Nevada regulation followed that bars all state gambling licensees from engaging in casino operations in any other state or nation.

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* Gambling licensees and/or casino owners or operators are referred to as gamblers

Sources

Photo from the University of Miami Libraries’ Digital Collections

When Fulgencio Batista returned to power as president in Cuba in 1952, he aimed to foster a gambling empire from which he could generate revenue for his coffers. To facilitate casino development, he and his administration:

• Restricted gambling licenses to hotels or nightclubs worth $1 million or more

• Waived taxes, which were as high as 70%, on all building materials imported for new hotels

• Deemed all casino pit bosses, stickmen and dealers to be skilled technicians, so they’d qualify for entry into Cuba under two-year visas versus the typical six-month ones afforded to incoming workmen

• Subsidized construction costs of new hotels

Government-backed banks provided $6 million of the $14 million to construct the Havana Riviera, for instance. The pension fund of the Catering Workers Union of Cuba provided most of the $24 million for the Havana Hilton. Casino operators typically leased space for their operations from the hotel owners; a rate of $1 million per year was typical.

Consequently, lavish hotel and casino construction boomed, as did the gambling business. Cuba became what Mexico had been during Prohibition — a playground for wealthy Americans.

“Havana’s casinos are elegant salons with expensive chandeliers, brocade draperies and a mink-stole clientele … At the roulette tables the smallest chips are a quarter. At the craps tables they are a dollar — but nobody who really amounts to anybody thinks of betting less than a $5 chip,” described LIFE magazine (March 10, 1958).

Government taxes on the new casinos “were set ridiculously low: $25,000 for a license plus 20 percent of the profits,” LIFE reported. While this was the official cost, the true under-the-table fee was $250,000. “And no one has even tried to guess how big a cut the politicians demand at the end of the month.”

Further, Batista’s brother-in-law, Roberto Fernandez y Miranda, had a monopoly on the country’s slot machines from which he collected half the profits.

Las Vegas Gamblers Want In

Despite the corruption in Cuba (or perhaps because of it), eight Nevada licensees perceived an opportunity to make money by capitalizing on Havana’s gambling trend and dropped at least $400,000 into casinos there.

• Owner Wilbur Clark and associates, Thomas McGinty, Moe Dalitz and Morris Kleinmann, of the Desert Inn in Las Vegas leased space adjoining the Hotel Nacional de Cuba in which they opened and operated a $1 million casino called Wilbur Clark’s Casino International.

• Hy Abrams, owner, and Benjamin “Bugsy” Siegel, investor, in the Sands in Las Vegas, and Jack Davis, investor in the Fremont hotel-casino in Las Vegas held a share of the Havana Riviera casino.

• Clifford Jones, co-owner of the Thunderbird hotel in Las Vegas, owned an interest in the Havana Hilton’s casino.

For these men, their investments were ultra-high risk and tenuous, as government depravity was rampant and political strife was high in Cuba.

“For the gamblers, the one completely unknown factor is the position of Batista himself,” LIFE noted. “If he fell from power, the gambling mob would have to make a whole new set of deals with a different bunch of politicians. The gambling trade might slow down.”

Sources

Sandra Giles

1956

The Fremont in Las Vegas commissioned a large oil painting that depicted a “lady of chance” to grace a wall in its casino.

The hotel’s press agent, Shelly Davis, asked aspiring actress Sandra Giles to pose for the piece for renowned artist, Philip Paval.

During the hotel’s grand opening, the piece of art was unveiled. It showed the voluptuous Giles nude, lying provocatively on her back with gambling chips scattered on and around her body.

“I don’t want to be a Marilyn Monroe! I want to be an actress. I didn’t pose that way! I wore a bathing suit,” the blonde 22-year-old yelled.

Giles slapped Paval then Davis. The painting’s debut had unexpectedly evolved into a jackpot for the roughly 100 news people there covering it.

Paval explained that, yes, Giles’ intimate body parts had been covered during the sitting, so he’d used his imagination and artistic license to render her naked.

An irate Giles sued the Fremont and Paval for $250,000, claiming she’d suffered “mental anguish” and “humiliation” when the picture was revealed.  She later claimed the attention she’d garnered from it led to her breakup with boyfriend, Harold Lloyd, Jr., a famous actor and singer.

The story was reported nationwide and even made the front page of the Los Angeles Times.

About three weeks later, the Fremont’s president, Ed Levinson, paid Giles $15,000 in silver dollars during a news conference as settlement. (Paval had received $2,500 for creating the piece.)

This outlandish sequence of events, though, had been a stunt that Davis dreamed up and staged and Giles, Paval and Levinson had been in on. This scoop came out years later in the brief biography, “From Hooker to Hollywood,” by Michael Piller.

Sources