Mob Rules

BRIAN: We’re going to turn now to the mid-20th century. Gambling back then was, for the most part, illegal throughout the United States, even lotteries were outlawed. But naturally, Americans were still gambling wherever they where. Do you remember this scene in Casablanca where the police detective shuts down Rick’s illegal casino?

MALE SPEAKER: I’m shocked, shocked to find that gambling is going on in here.

MALE SPEAKER: Your winnings, sir.

MALE SPEAKER: Oh, thank you very much.

BRIAN: Well, that’s pretty much how gambling worked here in the 1940s. Local organized crime syndicates ran gaming operations and they bribed cops and politicians to look the other way.

DAVID SCHWARTZ: It’s something that people like to do and doesn’t seem to be causing a lot of problems, so it’s really not a priority for enforcement.

BRIAN: This is historian David Schwartz. He says that mobsters controlled all kinds of gambling from local lotteries to race track betting.

DAVID SCHWARTZ: Everybody from poor people to rich people liked to gamble. You know, the poorest people would play their daily numbers. The richest people would go to the illegal casinos. Everybody from kids to housewives to businessmen would play illegal slot machines, which were all over the cities in cigar stores, candy stores, places like that. Because, like alcohol in the ’20s, it was illegal but in very high public demand.

BRIAN: Enter Estes Kefauver. In 1950, the junior senator from Tennessee decided to take a stand against these operations.

DAVID SCHWARTZ: And he’s looking for a big national issue because he’s an ambitious guy and he decides that gambling is something that’s pretty threatening. You know, If you look around, anti-communism had already been taken by people like Joe McCarthy. So gambling’s as good as anything.

BRIAN: Kefauver didn’t mind gambling per se. What infuriated him was who raked in the profits. He believed that all these small time mobsters answered to one very powerful national crime syndicate. In order to uncover this conspiracy, Kefauver chaired the Special Committee to Investigate Organized Crime in Interstate Commerce. The Kefauver Committee then took its show on the road to get as much publicity as possible.

DAVID SCHWARTZ: This would give him a chance to go around the country and look at crime conditions and it, not coincidentally, raised his profile in those cities around the country.

BRIAN: Over the course of 15 months, the Kefauver Committee held hearings in 14 cities, including Miami, New Orleans, and Chicago. They also stopped in a little place called Las Vegas, then a growing attraction with just half a dozen casinos. Gambling had been legalized in Nevada two decades before but Kefauver thought even above board gambling was a public menace.

DAVID SCHWARTZ: Kefauver and the rest of the committee said that as an experiment in legalized gambling, Nevada speaks eloquently in the negative and legalizing it is just going to give the criminals legal cover for their action.

BRIAN: Kefauver’s hearing in Vegas didn’t attract much attention but the media swarmed the other showdowns. In Chicago and New York, Kefauver interrogated local mobsters and bookkeepers while warning Americans of the dangers of seemingly harmless $2.00 bets.

DAVID SCHWARTZ: Millions of Americans like to go out and put down a $2 bet. And he was able to tell them, look, this $2.00 bet is actually funding organized crime and organized crime isn’t just your local gangster, your local hoodlum, as they called them then, but is this national and maybe even international network. Really terrifying people that are taking money out of the American economy and bribing police and bribing judges. So it’s creating a problem in the minds of a lot of people.

BRIAN: Americans were mesmerized by these hearings. The committee made an even bigger splash thanks to the new medium of television. In New Orleans, a local television station decided to broadcast the hearings live.

DAVID SCHWARTZ: And people just can’t get enough of it. And as this continues, other cities where he’s meeting, like Detroit, St. Louis, LA, and especially, New York, also decide to broadcast this.

MALE SPEAKER: Climaxing 10 months of nationwide hearings, the Senate crime investigating committee headed by Senator Kefauver, left, opens hearings in New York.

DAVID SCHWARTZ: It’s broadcast to movie theaters around New York and about 4 1/2 million New Yorkers watched this. And this is just really the first time that American citizens get to see Congress doing stuff live and they love it because you have mobsters and corruption and all kinds of other really cool things.

BRIAN: By the end of their tour, Kefauver and his fellow senators had interviewed more than 600 witnesses. Their final report was 11,000 pages long. There was just one problem. Mob operations did cross state lines but Schwartz says Kefauver couldn’t find the evidence to link those operations.

His imagined network of a central massive mob operation didn’t exist the way he thought it did. So in the end, the committee’s recommendations mostly just asked for more money to keep looking for this conspiracy. None of their recommendations became law. As for the public?

DAVID SCHWARTZ: The American people said, oh, my god, this is terrible, mobsters. And then they went on and gambled like they were doing before. So Kefauver wasn’t successful in getting people to stop gambling.

BRIAN: But Schwartz says Kefauver’s efforts did alter public attitudes towards gambling.

DAVID SCHWARTZ: After the committee came together, people are realizing, well, maybe these illegal casinos aren’t so great, maybe we should do something about this. And there’s pressure on local police and local politicians to enforce the anti-gambling laws more strictly.

BRIAN: Municipalities, rather than the federal government, started to chip away at organized crime’s local gambling operations. Mobsters, being savvy businessmen, simply took their talents elsewhere.

DAVID SCHWARTZ: And a lot of the guys in the mob who want to have their money do something for them decide to invest in legal casinos in Las Vegas.

BRIAN: To be clear, there were mobsters in Vegas before the Kefauver committee, but Schwartz says that the 1960s stereotype of Vegas as a gangster’s paradise only took off after the Senator’s work was done. So Kefauver’s fear of legalized gambling providing cover for criminals came true.

DAVID SCHWARTZ: Yeah, it’s funny, you know, if you’re looking at it, you could consider Kefauver one of the founding fathers of modern Las Vegas because without the 25 years or so that Las Vegas had with a pretty much monopoly on gambling in the United States, it probably wouldn’t have become as successful as it did.

BRIAN: But Schwartz says that Vegas also gave gambling a makeover. Gambling had been associated in the 1940s with big city back alleys, dusty race tracks, and dimly lit bars.

DAVID SCHWARTZ: That and it seems kind of seedy. You go out to Las Vegas and you have blackjack tables and craps tables in pools. And there’s palm trees and sun and it’s a vacation. And you’re in this isolated little suburban style resort with nothing around you and it really sanitizes it. And it makes it more acceptable, come as you are, and have a lot of fun.

BRIAN: Schwartz says all these factors remade Las Vegas from a town with just a handful of casinos into a neon explosion. By the 1970s, other states looked to this oasis in the desert as a model for legalizing gambling themselves. In other words, what happened in Vegas certainly didn’t stay in Vegas.

We had help on that story from David Schwartz, director of the Center for Gaming Research at the University of Las Vegas Nevada. He’s the author of several books, including Roll the Bones, the History of Gambling and most recently, Grandissimo, the First Emperor of Las Vegas.