By Nevada Gaming History
The Outfit Arrives: Las Vegas Before the Mob (Early 1940s)
Las Vegas in the early 1940s was still a dusty railroad town with a few neon ambitions. The Flamingo was a blueprint, not a building. The Strip wasn’t “the Strip” yet , it was Highway 91, a stretch of desert with more tumbleweeds than tourists.
But Chicago already had its eyes on it.
The Outfit understood something early: Nevada’s legalized gambling wasn’t a loophole , it was an opportunity. A place where money could be washed, multiplied, and moved without the scrutiny they faced back home.
By 1943, Chicago emissaries were quietly scouting the valley. They weren’t flashy. They weren’t violent. They were businessmen with envelopes.
Enter Gus Greenbaum: The First Chicago Beachhead (1944–1946)
Gus Greenbaum was the Outfit’s perfect ambassador , calm, competent, and absolutely loyal. When the Flamingo project began to wobble under Bugsy Siegel’s chaotic leadership, Chicago sent Greenbaum to steady the ship.
Greenbaum didn’t argue with Siegel when they bought the El Cortez with Moe Sedway and Meyer Lansky. And he didn’t challenge him when Lucky Luciano and Frank Costello said Davie Berman would be a new partner at the club. He simply watched and did his job.
He also set himself up with a little extra cash at a few other clubs like the Rex, that Siegel was licensed to run. He didn’t show up to work, but he drew a weekly check there.
By that time, Chicago was getting a piece of the pie from four frontmen at other clubs plus the El Cortez. But when Siegel’s fiscal mismanagement became impossible to ignore, the Outfit made its move.
That mismanagement included exorbitant spending by Bugsy’s girlfriend, an Alabama-born Chicago girl named Virginia Hill. Her ties went from Las Vegas and Bugsy, to Chicago and Charlie Fischetti, and then to Joey Adonis in New York. And her loyalty? It fell to whomever gave her the most cash. In 1946, it was Mr. Siegel, before and after he divorced his wife Esta!
The Flamingo Opens, Bugsy Falls, and Chicago Takes Control (1947)
The Flamingo opened on December 26, 1946 , a disaster of a launch. Siegel blamed everyone. Everyone blamed Siegel. Chicago blamed the financial numbers and Bugsy’s fingers in the horserace wire.
On June 20, 1947, Siegel was assassinated in Beverly Hills. The Outfit didn’t brag. They didn’t celebrate. They simply installed Gus Greenbaum and Davie Berman as the new boss of the Flamingo.
Within weeks, the casino was highly profitable.
Chicago didn’t just take over the Flamingo , they proved they could run Las Vegas better than anyone else.
The Outfit Expands: Riviera, Stardust, Desert Inn (1950s)
Once the Flamingo stabilized, Chicago moved fast.
Riviera (1955)
The Riviera was sleek, modern, and expensive , exactly the kind of property Chicago liked. Outfit associates quietly backed the financing and placed trusted men in key operational roles.
Stardust (1958)
This was the crown jewel. The Stardust was built for volume , massive casino floor, huge showroom, and endless rooms. The money flowed steady, and Marshall Caifano kept everything straight, especially the skim.
Eventually, he was replaced by Johnny Rosselli and then Tony Spilotro. About that time, Chicago installed Frank “Lefty” Rosenthal behind the scenes, even though he couldn’t hold a gaming license.
The skim became legendary.
Desert Inn (1950–1960)
The Desert Inn was a hybrid operation , part Cleveland, part Chicago, part “whoever could keep the money flowing, like Mr. Rosselli.” But Chicago’s influence grew steadily, especially through Moe Dalitz, who operated with the calm efficiency of a corporate executive.
The Skim: How Chicago Made Millions Without Anyone Knowing (1950s–1960s)
The skim wasn’t complicated. It was elegant.
Count room employees only tallied cash after a portion was removed by an associate.
The “clean” count was reported to Nevada regulators.
The skim was carried by bagmen and women to Chicago.
No receipts. No records. No paper trail, except the one on Tony Accardo and Sam Giancana, who owned 2 points in the joint, so he got his own special cut from the Flamingo and the Stardust.
The Stardust alone was rumored to skim $7–10 million a year at its peak.
Chicago didn’t need to own the casinos outright. They just needed the right men in the right rooms.
The Rosenthal Era: Chicago’s Invisible CEO (1968–1976)
Frank “Lefty” Rosenthal was the Outfit’s most valuable asset , a statistical genius who treated gambling like a science.
He ran:
The Stardust
The Fremont
The Marina
The Hacienda
All without a gaming license.
Rosenthal modernized Las Vegas with the largest sportsbook in town, the introduction of predominantly-female blackjack dealers, and the first data-driven pit management system
Chicago didn’t just skim money , they improved the product.
The Fall: FBI Pressure, Internal Tension, and the End of the Skim (Late 1970s)
By the late 1970s, the FBI had finally caught up. Wiretaps, informants, and casino audits began to close the gaps.
The Outfit’s Las Vegas empire didn’t collapse overnight , it faded.
Rosenthal survived a car bombing in 1982.
The Stardust changed ownership.
The Riviera drifted out of Outfit influence.
The skim dried up as corporate gaming took over.
By 1985, Chicago’s presence in Las Vegas was effectively gone.
Legacy: How the Outfit Shaped Modern Las Vegas
Chicago didn’t build Las Vegas. But they professionalized it.
They brought structure and discipline to the operations, and while Howard Hughes had great plans for expansion of his casinos and data systems for running efficiently, the Outfit actually implemented their ideas. The skim gave them power in Nevada, Chicago, and Kansas City, while New York lost most of their Las Vegas cash flow.
And they left behind a blueprint that modern casino corporations still follow:
Run the numbers. Trust the math. Never let the floor get sloppy.
Chicago’s fingerprints are still on the Strip , not in crime, but in the systems. And what they weren’t good at, caused their downfall, and an eventual loss of millions. But that’s for another story.
The Chicago Outfit didn’t just take over Las Vegas , they taught it how to win.
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