A Complete Historical Narrative of Ownership, Construction, Mob Influence, and Legacy
Few casinos in Las Vegas carry the weight of history quite like the El Cortez Hotel & Casino. Opened in 1941 and still operating today, it is the longest‑running casino in continuous operation* in Las Vegas, a living artifact from the city’s pre‑Strip era. Its story is a rare blend of frontier entrepreneurship, Mob investment, post‑war expansion, and modern preservation — all wrapped inside a building that still looks and feels like 1940s Fremont Street.
This article traces the full arc of the El Cortez: its construction, owners, Mob ties, expansions, and its improbable survival into the 21st century.
Origins: Building a Casino on the “Wrong” Side of Town (1940–1941)
In 1940, Las Vegas was still a small railroad town with a growing gambling district centered on Fremont Street. Most casino operators believed the action would remain west of Main Street, near the train depot and the established clubs like the Northern, the Boulder Club, and the Las Vegas Club.
But John Kell Houssels Sr., a visionary hotelier and gaming pioneer, saw opportunity where others didn’t. He purchased land on the far eastern end of Fremont Street, then considered too remote to attract gamblers. Houssels partnered with Marion Hicks and J.C. Grayson to build a modern, Spanish Colonial–style casino with 59 hotel rooms and a street‑facing gaming floor.
Financing the El Cortez
Although the El Cortez would later become famous for its Mob ownership, the casino’s origins were rooted in clean, conventional financing. John Kell Houssels Sr. entered the project with a rare advantage for a 1940s Las Vegas operator: he already had steady profits from the Las Vegas Club, the Apache Hotel casino floor, and earlier hotel ventures in New Mexico and Arizona. Those operations gave him both the liquidity and the reputation needed to secure traditional bank financing at a time when gambling was still considered a frontier business. Houssels was one of the few early operators who could walk into a bank and walk out with a construction loan—a testament to his clean record and status as one of Nevada’s most trusted gaming pioneers.
Questions remain about Bugsy Siegel’s involvement at the Las Vegas Club before the opening of the El Cortez. What is known is that Siegel and Moe Sedway operated offices inside the club (from FOIA FBI files because they were bugged by a Special Agent in Charge from the Salt Lake City office), and sold the race-wire service to any casino they could muscle into along the downtown corridor. They had also taken points (ownership shares) in several small clubs, including the Northern, but it is difficult to “prove” hidden ownership. Did they run the Las Vegas Club? Absolutely not. Did they share a piece? Probably. The El Cortez was a different deal.
To bring the El Cortez to life, Houssels partnered with two well‑capitalized California developers, Marion Hicks and J.C. Grayson, who supplied much of the construction capital. Hicks was a Los Angeles real‑estate builder with access to private investment networks, while Grayson was a contractor and investor who had worked with Hicks on multiple California projects. Together, the trio combined hotel profits, California development funds, and bank credit to fund the roughly $245,000 in construction costs. This made the El Cortez one of the last major downtown casinos built entirely with legitimate, above‑board financing — a sharp contrast to the Mob‑funded Strip resorts that would follow just a few years later.
Construction Facts
* Opened: November 7, 1941 * Cost: Approximately $245,000 * Architectural Style: Spanish Colonial Revival * Original Features: * 59 rooms * A small but elegant casino * Stucco exterior with red‑tile roof * One of the first neon signs on East Fremont
Despite skepticism, the El Cortez quickly became one of the most profitable casinos in town. Its success attracted attention — including from organized crime figures looking to expand into Las Vegas.
The Mob Arrives: The 1945 Takeover
By 1945, the El Cortez was doing so well that a group of Mob‑connected investors made Houssels an offer he couldn’t refuse.
The 1945 Mob Ownership Group
* Bugsy Siegel * Meyer Lansky * Gus Greenbaum * Moe Sedway
This group purchased the El Cortez for $600,000, more than double its construction cost. Their goal was simple: use the property as a cash‑flow engine to fund larger Strip developments, including the Flamingo.
Why the Mob Wanted the El Cortez
* It was already profitable * It had strong local traffic * It was outside the political spotlight * It provided steady skim potential * It gave the group a foothold in Las Vegas before the Flamingo opened
Interestingly, Davie Berman, from Minnesota, went to New York to ask Frank Costello, who had taken Lucky Luciano’s place as the NY Boss, for permission to become a partner at the El Cortez. We can only guess at Siegel’s attitude as he is told to share “his” casino with an outsider, but he may have been happy to get hundreds of thousands to add to his group’s bankroll, since he had other plans.
Big Los Angeles name players like William Wilkerson had phenomenal bankrolls they were willing to spend in Las Vegas, most gravitating to the craps games. Wilkerson admits to losing hundreds of thousands at the El Cortez and thinking he should have his own casino to lose in. But in Las Vegas, it’s important to be careful what you wish for.
Because of Wilkerson, his gaming addiction, and his “new casino” ideas, the Mob’s tenure at the El Cortez was short. The casino’s remote location — the same issue Houssels had overcome — frustrated Siegel and Sedway. They preferred the glamour and potential of the Strip. Sedway bought land next to Wilkerson’s on what became known as the Strip, and the rest is the best of Las Vegas history!
In 1946, the group sold the El Cortez back to John Houssels, who returned as owner and operator. To clarify, his name was never removed as the licensed gaming operator, and none appears before 1948.
The Houssels Era and Post‑War Expansion (1946–1963)
Houssels’ second tenure at the El Cortez was marked by stability and growth. He expanded the casino, added new hotel rooms, and modernized the property to keep pace with the booming post‑war Las Vegas economy.
Key Developments
* 1946–1950: Casino expansion and modernization
* 1950s: Addition of the “Pavilion Rooms.”
* 1950s: Upgraded neon signage and exterior lighting
* 1960: Major renovation to compete with downtown’s growing casino district
Houssels was a respected Nevada gaming operator, and the El Cortez became known as clean, well-run, and profitable—a contrast to Mob-run casinos on the Strip.
The Fugitive Pit Boss
One of the more unusual characters to pass through the El Cortez was Jack “The Axe” Alderman, a former Georgia enforcer who quietly lived in Las Vegas for nearly thirty years while wanted for murder back home. Using an assumed identity, Alderman blended seamlessly into downtown’s old‑school casino culture, eventually working as a pit boss at the El Cortez, where he became known as a reliable, low‑key employee.
Early Las Vegas casinos often hired on reputation rather than paperwork, and Alderman took full advantage of the era’s loose background checks. His double life unraveled only in the 1980s, when a routine records inquiry finally connected him to the long‑cold Georgia case — stunning coworkers who had known him for decades without ever suspecting they were working beside a fugitive.
Irish Green and the Longest Comped Room in Las Vegas
Another colorful figure tied to the El Cortez was Irish Green, a former bodyguard for Bugsy Siegel who became a familiar sight around the property for decades. Green had worked security for Siegel during the Flamingo years. After Siegel’s death, he drifted back downtown, eventually settling into the El Cortez as a kind of unofficial house regular.
From Vegas and the Mob: Fat Irish Green took the Hit on Bugsy personally, but instead of going after the killers, he boarded a plane to New York and met with Frank Costello and Meyer Lansky, handing over a satchel containing $300,000 his boss had put in his safekeeping. Meyer called Gus Greenbaum, who arranged things in Vegas.
According to longtime employees, Green was given a permanent room at the hotel, a quiet arrangement that amounted to free room and board in exchange for keeping an eye on the place and serving as a trusted old‑school presence. He lived at the El Cortez for years, becoming part of the building’s folklore — a reminder of the era when personal loyalty mattered as much as payroll, and when downtown casinos still carried echoes of the men who built and fought for them.
But the story doesn’t end there. Irish was also kept fat by Benny Binion, the owner of the Horseshoe casino down the street, who knew the story, and he offered Green free meals in his hotel casino for the rest of his life.
Jackie Gaughan Takes Over: The King of Downtown (1963–2004)
In 1963, the El Cortez entered its most iconic era when it was purchased by Jackie Gaughan, the legendary downtown casino owner who would eventually control more than 25% of all gaming in the Fremont Street area.
Why Gaughan Bought the El Cortez
* He believed in downtown’s long‑term potential
* He valued properties with strong local clientele
* He preferred casinos with stable, predictable revenue
* He admired Houssels’ management style
Gaughan’s Impact
* Expanded the casino floor
* Added the 15‑story El Cortez Tower in 1980
* Introduced low‑limit gaming that attracted locals
* Maintained a friendly, old‑school atmosphere
* Lived in the penthouse until he died in 2014
Gaughan’s personal presence became part of the casino’s identity. He walked the floor daily, greeting guests, comping meals, and maintaining a hands‑on approach that made the El Cortez feel like a neighborhood casino.
Ownership Timeline
Years Owner(s)
1941–1945 John Kell Houssels Sr., Marion Hicks, J.C. Grayson, built and opened the El Cortez
1945–1946 Bugsy Siegel, Meyer Lansky, Gus Greenbaum, Moe Sedway, Mob ownership; used as a cash generator
1946–1963 John Kell Houssels Sr. Repurchased from Mob; expanded property
1963–2004 Jackie Gaughan Longest and most influential owner
2004–Present Kenny Epstein (with Gaughan retaining residence until 2014) Modernization and preservation era
Mob Ties: What’s Real and What’s Myth
The El Cortez’s Mob history is often overstated. However, separating fact from myth helps clarify its true role in Vegas history.
Confirmed Mob Connections
* The 1945–46 ownership group was deeply tied to national organized crime * The casino likely contributed skim revenue to Mob operations * The property served as a training ground for Sedway and Greenbaum before the Flamingo
Common Myths
* Myth: The Mob ran the El Cortez for decades
* Fact: Their ownership lasted only about one year
* Myth: Bugsy Siegel used the El Cortez as a headquarters
* Fact: He spent far more time at the Flamingo project
* Myth: The El Cortez had hidden tunnels
* Fact: No evidence supports this
The truth is more interesting than the myths: the El Cortez was a brief but important stepping stone in the Mob’s transition from downtown gambling halls to the grand resorts of the Strip.
Architecture and Preservation
The El Cortez is one of the best‑preserved examples of 1940s Spanish Colonial Revival architecture in Las Vegas. Its red‑tile roof, stucco walls, and neon blade sign remain iconic.
Historic Designations
* 2013: Added to the National Register of Historic Places * One of the few Las Vegas casinos with federal historic recognition
Why It Survived
* Continuous operation
* Loyal local clientele
* Owners who valued preservation over reinvention
* Downtown’s resurgence in the 2000s
The El Cortez is now considered a cornerstone of the Fremont East Entertainment District.
The Modern Era: Epstein Ownership and Renovation (2004–Present)
In 2004, longtime casino executive Kenny Epstein purchased the El Cortez from Jackie Gaughan. Epstein had worked with Gaughan for decades and shared his philosophy of running a friendly, locals‑first casino.
Modern Improvements
* Renovated hotel rooms * Upgraded casino floor * Restored vintage neon * Added the Cabana Suites across the street * Maintained low‑limit gaming
Despite modernization, the El Cortez remains one of the most authentically “old Vegas” casinos in the city.
Why the El Cortez Matters
The El Cortez is more than a casino — it’s a living timeline of Las Vegas history.
It represents:
* The pre‑Strip gambling era * The first wave of Mob investment * The rise of downtown gaming * The Gaughan dynasty * The preservation of classic Las Vegas architecture
Most importantly, it is one of the last casinos where you can still feel the atmosphere of 1940s Fremont Street.
Conclusion
The El Cortez is the rare Las Vegas casino that has survived every era — the railroad town years, the Mob years, the corporate years, and the downtown revitalization. It stands today not as a relic, but as a functioning reminder of what Las Vegas once was: intimate, neon‑lit, and full of character.
For NevadaGamingHistory.com, the El Cortez is a perfect anchor story — a bridge between the early Fremont Street pioneers, the Mob’s first foothold, and the modern preservation movement.
From Al W. Moe’s perspective, the El Cortez has always been too far down Fremont Street for my taste. I wandered downtown in the early ’80s, looking for casino chips to collect, easy blackjack games to beat, and promising poker games. The first time I walked into the El Cortez, it was smoky! And the walkways were small.
I was used to large, open areas in other casinos, and the El Cortez had managed to make use of every square inch of real estate. They did have poker. A single table you suddenly found in front of you that had to be walked around to get to the rest of the club. It was almost full. $1 to $3 Texas Hold ’em and all the free, tiny glasses of bar-cola with a drowned cherry and a red straw you could swallow.
Yeah, I played, and after an hour I was up $12, so I pocketed my winning chips (a red $5 and seven not-too-beat-up $1 chips with the tiny metal insert) and cashed out my rack of one-dollar chips, then went outside. Across the street was a touristy Indian souvenir shop called Trader Bill’s, a drug store, and Foxy Dogs. None of which looked smoky, so I went for a snack.
And you know, Foxy’s had a pinball machine and a couple of penny slot machines I was able to play while waiting for what turned out to be a couple of really good hot dogs. Also, never ask for a milkshake at a place like Foxy’s. Totally pissed off at the guy behind the counter. Shakes take time away from wrapping hot dog orders. My mistake. Back to the El Cortez.
What I found in the very crowded pit at the El Cortez was many games, including a 25-cent crap game and $1 blackjack. A buck to $25! And, I played quite happily for a couple of hours of single-deck seven-player blackjack, taunting the club with my card-counting skills and coming away with another big win: $27.
I lived in North Vegas, I visited Las Vegas my whole life, and I never went back to Foxy Dog or the El Cortez. Well, except when I played in Manion Poker’s televised poker tournament series in 2007, which was very close. The casino hadn’t changed much, but at the El Cortez, I think that’s the point!
The * notation: although the El Cortez has been open and operating since 1941, the Golden Gate would like you to know that the Nevada Hotel at 1 Fremont, opened in 1906 and had gaming before the state outlawed it in 1909, and in 1931 the hotel was renamed the Sal Sagev (Las Vegas, backwards) with gaming for three years. The Golden Gate has had gaming since 1955, making it the oldest gaming property (and hotel) with gaming.
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