The history of Las Vegas and organized crime in the 1950s through the 1970s is, ironically, the fault of the federal government in part. During the 1930s, the Hoover Dam started being built in 1931, both to harness the power of the nearby Colorado River as well as to put people to work in significant numbers. However, the predominant number of workers on the Dam project were men, which created a demand for entertainment of all types in the nearby area when the men went off the clock.
No surprise, the swell of local population from 5,000 to 25,000 residents create a perfect market for bars, casinos and dance show venues with female entertainers.
The groundswell of demand didn’t take long for the state lawmakers to figure out money was to be made very quickly. gambling was legalized in Nevada in 1931, after being made illegal only 21 years earlier. However, the federal government was still very much anti-gambling, and tried to restrict workers from going to the nearby Las Vegas city offerings. As a result, workers snuck their way out and back frequently.
By 1934, city leaders themselves tried to jump in a stop the Dam worker flood of business to casinos, but the die was cast. Then, to make the place even more attractive, the Dam was connected to the early electrical grid in 1935, and Las Vegas was the first power customer, turning the place into a lit up attraction all night long.
After World War II, organized crime really started ramping up a presence in Vegas to both take advantage of the market and to diversify its casino holdings which were mainly back east in Atlantic City, frequently garnishing the attention of authorities back there. Through the 1950s mob funds helped construct and start some of the most famous Vegas casinos such as the Tropicana, the Sahara, the Sands, and the Showboat among others.
Interestingly, it was players with even more money that eventually took over Vegas and caused the mob influence to phase out. Corporations began to make a major presence in Las Vegas in the late 1970s, buying casinos to revamp them or building their own new ones.
With the ability to leverage and throw in far bigger capital funds that went through the banking systems and federal regulators without issue, the corporations soon outran, outpaid, out bought, and out leveraged organized crime’s presence in the Vegas ownershi arena. And many of the big mob figures were not opposed to the idea; they were the ones selling the casinos to the corporations and making off with very comfortable retirement packages. So it was a win-win situation for the transition to occur in.