When the “Wide Open Gambling Bill” was passed in 1931, betting on horse races and sporting events was not legalized. The amendment legalizing wagering on these events did not come until ten years later. When casinos were first allowed to offer betting on horse races, no method was established for the legal casinos to determine the outcome of races and how much the winning horses paid. Trans-America wire service, which, incidentally, was controlled by the Capone mob in Chicago, was established to answer this need (Reid & Demaris, 1964).
The West Coast representative for the Trans-America wire service was none other than the infamous gangster Benjamin “Bugsy” Siegel, who came to Las Vegas with his friend Moe Sedway in 1941 to promote the wire service. With monopoly control of the wire service, Bugsy and his gang gained a foothold in the legal casinos of Las Vegas (Vallen, 1988, p. 10; Reid & Demaris, 1964, p. 13).
Once familiar with Las Vegas gambling, Bugsy initially bought into and subsequently sold the El Cortez. He then decided that the town needed its first “plush” casino-hotel. Up to this point in Nevada's gaming history, most casinos sported a Western theme and lacked the elegance of the Miami Beach–type hotels. To satisfy this perceived gap in the market, Bugsy decided to gain control of the Flamingo Hotel & Casino on the Las Vegas Strip, which had begun construction in January 1945 under the ownership of a businessman from Los Angeles.
The hotel was named after Hollywood starlet Virginia Hill, who was also Bugsy's girlfriend. Looking back, historians always refer to Bugsy as the developer, but at the time Bugsy's name was never mentioned as a principal. The developer of record was the Nevada Projects Corporation. On Thursday, December 26, 1946, although its 97 hotel rooms were not ready for occupancy, the Flamingo Hotel & Casino opened to the public. One would have thought that the opening of the $5 million resort would have been on the front page of the Las Vegas Review Journal. Instead, the day the Flamingo opened, the headlines announced the death of comedian W. C. Fields. The opening did make the newspaper, but not until page three.
The Flamingo was crowded with customers on opening night. The “cafe entertainment” was headlined by Jimmy Durante, Xavier Cugat, and Rose Marie. But since the rooms were not yet complete, customers had to stay at the El Rancho Vegas, the Last Frontier, or in one of the few rooms in downtown Las Vegas. Two nights later, a visit that was billed as the largest gathering of film stars outside the confines of Hollywood included the patronage of such notables as Veronica Lake, Lucille Ball, George Raft, William Holden, Brian Donlevy, Ava Gardner, and Peter Lawford.
In spite of all the hoopla, the casino immediately began to lose money and was closed on February 1, 1947, so that the construction could be completed. During the initial opening period, the casino lost over $100,000. The casino was reopened on March 27, 1947, and this time the rooms were completed and the customers had a place to stay. Unfortunately for Bugsy, the casino continued to lose money. Convinced he was skimming casino proceeds, his mob partners had him killed on June 20, 1947, at the Beverly Hills home of Virginia Hill, who had ended their relationship one day earlier (Reid & Demaris, 1964, p. 28).
Bugsy was buried in a $5,000 silver-plated casket following a five minute ceremony attended by only five mourners. Ironically, at the time of Bugsy's death, the Flamingo had improved operations and was making money (Las Vegas Review Journal, 1986). In retrospect, the opening of the Flamingo is viewed as a turning point in the history of Las Vegas gambling.