1972

In the mail on Monday, April 24, each of 21 Las Vegas hotel-casinos received an identical, typewritten letter that demanded they pay a total of $2 million (about $12 million today) or get blown up, one by one, until the extortionist got the full amount. It was up to the Nevada resorts if, and how, they divvied up payment. The correspondence didn’t indicate a day, time or place for the drop.

The letters had been sent via Special Delivery, which was expedited service, from Austin, Texas. Fifteen of them were turned over to the United States Federal Bureau of Investigation (FBI).

The same 21 gaming properties received a second letter, on May 4, which contained payoff instructions. It noted the bombing would start in two weeks, on Saturday, May 13, with Circus Circus being getting hit first and the Thunderbird second.

A similar extortion case had occurred in 1970 in Northern Nevada, in which the perpetrators had instructed three casinos — the Sparks Nugget Motor Lodge in Sparks and Harolds Club and Harrah’s in Reno — to pay a total of $1 million (about $6 million today) or face multiple bombs exploding in their casinos.

Plot Foiled

In the Las Vegas case, about two weeks later, on Thursday, May 11, FBI agents arrested a suspect in a Santa Monica, California motel, on a federal warrant. He was Los Angeleno Nathan N. Marks, 28, a self-employed radio and sales promoter. On him at the time was an airline ticket to Paris, France.

The next day, Marks waived extradition to Nevada to face the charges. Instead, that would take place in San Bernardino County, California. Bail was set at $500,000 ($3 million today).

Spilled The Beans

Marks had recruited a partner, a Texas resident, to help him carry out the scheme, and that person had informed the FBI about it all. That led to federal agents listening in on a phone call between the two alleged conspirers.

During that conversation, Marks told the second man to “buy enough explosive to blow a ’50 by 50 by 50′-foot hole in the casino,” he said, referring to Circus Circus, because he wanted “‘to let the Thunderbird Hotel, which was next on the list, to know that he meant business’” (The Bakersfield Californian, May 12, 1972). Marks indicated the bombs would be dropped from the air, out of a private plane Marks would charter in Los Angeles.

Day Of Reckoning

In May 1973, a year after the criminal endeavor was set in motion, Marks appeared in court. Rather than plead guilty to the 21 counts of mailing a threatening letter against him, he was permitted to admit to just one, which he did.

The judge sentenced him to 10 years in prison, half of the maximum sentence.

Sources

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

El Rancho in Las Vegas, Nevada in the 1950s

1951-1952

Gambling boomed in Las Vegas, Nevada immediately following Senator Estes Kefauver and his committee’s nationwide investigation into organized crime.

The 27 hearings the group conducted in 14 United States cities in 1950 and 1951 (Las Vegas was in November 1950) “turned a bright, hot light on illegal gambling in other parts of the country,” reported the Reno Evening Gazette (May 31, 1951).

“With illegal gambling considerably reduced in Miami, Chicago, Cleveland and the other big cities, the big spenders out to make a fast buck on the wheel or crap table are flocking to Las Vegas,” the newspaper added. “Weekend reservations at the flossier* hotels like the Last Frontier, Flamingo, Desert Inn, Thunderbird and El Rancho are getting scarce for next winter. Motels and private rooms are jammed all the time.”

In fact, in 1951, Nevada yielded the highest ever gambling tax revenue to that point, of $1.5 million ($13.7 million today). That meant gamblers cumulatively bet about $1 billion ($9.2 billion) in the state over the 12-month period.

Spin On The Story?

Just as the industry was flourishing, a potentially detrimental news story came out. It noted some of 30,000 crooked gambling devices – loaded dice, marked cards and wired roulette wheels – discovered in a Phoenix, Arizona warehouse were destined for Nevada. Specifically, packets of illegal dice bore the monogram of various Las Vegas and Reno clubs, according to Sheriff Cal E. Boies, who’d stumbled upon the cache.

Strangely, though, soon after his initial report, Boies backtracked and said the equipment wasn’t slated for Nevada, only New Mexico and other parts of Arizona.

“However, it was learned that a reliable Phoenix source had actually seen the crooked dice monogrammed with the names of certain Las Vegas clubs,” reported the Reno Evening Gazette (Dec. 30, 1951).

The members of the Nevada Tax Commission, which regulated gambling then, scrambled to quell the evolving public relations nightmare for fear rumors of crooked casinos in the state would keep away people wanting to play games of chance. The regulatory agency immediately sent one of its investigators, Ray Warren, to Phoenix to determine if in fact Silver State gaming clubs were involved.

Warren quickly reported he hadn’t found any evidence to indicate any of the gambling devices were to be going to Nevada. He added the crooked dice in question were not loaded and merely were displayed souvenirs of the manufacturing shop owner, which he’d purchased 10 years prior when he’d lived in Reno and Las Vegas.

The same day, tax commission secretary, Robbins Cahill, emphatically denied on the record that any crooked gambling equipment had been sent to or intended for any Nevada casinos.

“He added that no major casino in Nevada has ever been caught using loaded dice and that, on the contrary, the clubs’ biggest problem in that respect was to prevent players from trying to exchange crooked dice for the carefully inspected and closely watched dice used by the casinos,” noted the Nevada State Journal, Jan. 1, 1952).

*Flossier: superficially stylish, slick

Photo from the University of Nevada, Las Vegas University Libraries’ Digital Collection: “Dreaming the Skyline: Resort Architecture and the New Urban Space”

Sources

Las Vegas Strip (in red) runs through Winchester, Paradise

1950-Today

When people are on the Las Vegas Strip, they’re really in Paradise — the town, that is.

In 1950, a rumor surfaced that the City of Las Vegas’ boundaries would be expanded to include the then multimillion-dollar luxury resort area on South Las Vegas Boulevard. Disliking the idea, the proprietors of the hotel-casinos there collectively strategized to get the area in which their properties sat deemed an unincorporated town. That status would prevent the city from annexing it without the owners’ unanimous approval.

Money was the primary reason the Strip businesses opposed incorporation into Vegas. Costs — gambling and liquor license fees and taxes, for instance — within the city were higher than outside, specifically a tax rate of $5 per hundred dollars’ valuation versus $3.48.

In December the Clark County commissioners approved designation of a one-mile wide and four-mile long stretch as the unincorporated town of Paradise, said to be named after the Pair-O-Dice, a club whose property eventually became the Last Frontier.

These men comprised the newly formed, required town board:

• Gus Greenbaum / Flamingo: manager and associate of Meyer Lansky and Benjamin “Bugsy” Siegel (Greenbaum was Paradise’s board chairman)

• William J. Moore, Jr. / Last Frontier: developer, executive director and vice president

• Wilbur Clark / Desert Inn: front man for Cleveland mobster Moe Dalitz, the principal owner

• Marion Hicks / Thunderbird: architect and manager

• Beldon Katleman / El Rancho Vegas: owner

A major change for the properties in the new township was the lack of access to city services, including sewage disposal and fire protection services. Also, half of all gambling fees collected in Paradise had to be spent on public improvements within the town as opposed to throughout the county, as was the case before.

“What is good for the valley is good for the Strip. We hope this move will bring you better roads, better schools and better everything,” Greenbaum said at a town meeting.

In early 1951, property owners in Paradise Valley, the southern part of the Las Vegas Valley, sought and received approval to annex their unattached land to the newly established Paradise. This expanded the area to 54 square miles.

Paradise Divided

Later, out of the northern portion of Paradise, a second township was created, 7.5 square miles, that became known as Town A. The larger, remaining portion of the original unincorporated Paradise became Town B.

Eventually Towns A and B received official names.

In 1953, Town A was named Winchester. At the time, it encompassed the Sahara, El Rancho Vegas and Thunderbird hotel-casinos on the Strip’s northern end, as well as Last Frontier Village, the Las Vegas Park Race Track, numerous motels and some private homes. The Town A residents liked the name Winchester for its Western flavor and chose it over other suggested monikers, including McCarran, Sunset Heights, Empire, Silverado, Tiffany and Valhalla.

“In addition to getting a new name, the town figures to be one of the richest per capita in the world, since it covers practically all of the multi-million-dollar resort hotel industry, plus several costly motels and the expectation that another $20 million in new hotels will be erected in the near future,” reported the Reno Evening Gazette (Oct. 8, 1953).

Town B recaptured the original name, Paradise. Much larger in land size, it included the Desert Inn, Sands and Flamingo hotel-casinos on the Strip’s southern end and the Paradise Valley ranch area.

Attempt At Unification

In 1975, Governor Mike O’Callaghan signed Senate Bill 601, which would’ve doubled the size of Las Vegas by expanding its boundaries to include the Strip (Winchester and Paradise), Sunrise Manor and East Las Vegas — all unincorporated towns. The goal was to consolidate the various city and county governments and services.

However, before the change could be carried out, the Nevada Supreme Court, in June 1976, ruled that the legislation was unconstitutional for various reasons. One was because the law was passed during a special session, which is illegal per the Nevada Revised Statutes.

“I think that ends it for good,” said Senator James Gibson (D-Henderson), who’d introduced the bill. “It will probably kill [a] merger for quite a while in the future” (Las Vegas Sun, June 8, 1976).

Though relatively unknown except to locals, Paradise and Winchester still exist today, independent of Las Vegas.

Sources

The article, “Las Vegas Gamblers Arming in Control Battle,” ran on the front page of a Los Angeles newspaper in the third week of December, to the chagrin of Nevada gambling regulators, casino owners, officers of the law and other industry representatives.

The story reported that in the new iteration of Sin City:

• Casino owners (gamblers) were readying to fight for control of gambling there
• Many gamblers were carrying weapons and had armed bodyguards
• Men (presumably hired by the gamblers) were cruising competing casinos’ parking lots, trying to persuade guests to play at their clubs instead
• Ladies planted in cocktail lounges were directing visitors to specific casinos
• Although unreported, several physical beatings took place in gamblers’ inner circles
• One casino owner left the state because his life had been threatened*
• Fixers, dispatched by East Coast Mafia heads, were en route to negotiate a truce

Landscape At The Time

In the ’40s, downtown Las Vegas transformed when a handful of its gambling properties changed owners and names. The 1949, or post-war, Fremont Street was home to the:

Las Vegas Club (1930)
Boulder Club (1931)
Frontier Club (1935)
El Cortez Hotel (1941)
Western Club (1941)
Pioneer Club (1942)
Santa Anita Turf Bar (1943)
Monte Carlo (1945)
Golden Nugget (1946)
Club Savoy (1946)
El Dorado Club (1947)

Downtown Las Vegas in early 1950s

Also in that decade, the city saw the start of what would become the Las Vegas Strip, with the debut of this quartet of hotel-casinos:

El Rancho Vegas (1941)
Last Frontier (1942)
Flamingo (1946)
Thunderbird (1948)

Still fresh in the minds of those in the gambling world was the execution two years earlier, in 1947, of Benjamin “Bugsy” Siegel, violent mobster (Genovese crime family associate) and Meyer Lansky pal. Siegel had overseen (badly) the building of the Flamingo in Vegas, and had run the business until his murder.

In mid-December 1949, the Flamingo double-crossed Club Savoy, which was across the street, with a play that involved a cheating gambling stunt. The incident was extensively reported in the papers when Savoy’s owner refused to pay the Flamingo its winnings. It was negative publicity that gambling regulators and state officials disliked.

Also around the time, several casinos agreed to stop some of their blatant efforts to poach customers from other gambling properties. They’d used people on megaphones and “circus-type banners” to inform passersby that their slot machines had better payouts than their competitors’.

The L.A. newspaper article didn’t specify which gambling factions supposedly were fighting one another. Perhaps it was a Strip vs. downtown beef.

Similar, Widespread Reaction

The overarching response to the newspaper report from the big names in and associated with the Vegas gambling industry was denial: A turf war? What turf war? Calling the article’s contents hogwash, they deduced it merely was an attempt to hurt Nevada’s booming sector at a time it would feel it the most, the New Year’s Day weekend.

Here are some of the individuals who publicly weighed in and their comments. (All quotes are from the Nevada State Journal, Dec. 29, 1949.)

Gus Greenbaum, mobster, Meyer Lansky lieutenant and Flamingo hotel-casino president:

“The stories to that effect are fabricated entirely,” he said, specifically referring to an impending war for control. “No guns are being carried on any hotel or club property except by authorized personnel.”

Spokesman for the Nevada Tax Commission, the then gambling regulation agency:

Any impending warfare over gambling control “is news to us.”

Spokesman for the downtown casinos, who asked to remain anonymous:

“Relations between the gambling clubs and the casinos are more harmonious than ever. We think the story was carried mainly to counteract favorable publicity given our gaming recently by another Los Angeles newspaper. This whole business has been dreamed up by some eager newspaper correspondent.”

William J. Moore, Jr., Hotel Last Frontier executive vice president and tax commission member:

He wasn’t aware of any threats on the gambling scene, he said. In fact, the various gamblers have gotten along well in recent months and hold weekly meetings to hash out any issues. The story was “a deliberate attempt to keep California dollars from coming into the state, appearing as it did on the eve of the biggest weekend in the history of gambling in Las Vegas.” He added Vegas gamblers aren’t using “steerers,” or “persons corresponding roughly to ‘B’ girls in cocktail lounges who direct visitors to a certain casino,” which the state prohibits.

Archie Wells, City of Las Vegas acting police chief:

He didn’t know about any alleged beatings of certain gambling figures, he said. “We checked thoroughly and found no violence of any kind — reported or otherwise.” His department found no evidence the reports perhaps stemmed from possible attempts at revenge by Club Savoy.

Glen Jones, Clark County sheriff:

“We’ve received the utmost cooperation from all gambling operators.” He didn’t know of any gambler who was carrying a gun openly other than the special officers with deputy sheriff status in the clubs.

Informal Peace Summit

After the story appeared, the city’s casino and gambling club owners quickly convened to address its allegations.

They must’ve come to a mutually satisfactory resolution, if in fact a battle for gambling control had been underway or imminent, as no lives were taken . . . at least that we know of.

———————–

* One gambler, Beldon “Jake” Katleman, co-owner of the El Rancho Vegas, had traveled to the Middle East recently but was back in town at the time the newspaper article was published, the Nevada State Journal noted.

Sources