Mobs and Mafias

The History of Mobsters and Underground Casinos

November 28, 2015 • By

Gambling and the USA have had a fascinating and tumultuous relationship throughout history – even as far back as the beginning of the very first colonies, which were organised on the basis of two very different sets of values – the laws of England, and the moral rules of the Puritans.

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Those colonies run along English lines viewed gambling simply as an entertaining diversion. By contrast – Puritan colonies like Pennsylvania and New England banned gambling from the outset, to the extent that it was illegal to own dice, cards, or other gambling paraphernalia, even if they were kept in the privacy of your own home. For those in the puritan colonies, any gambling needed to be underground.


Fast forward to the mid 1800s, and gambling was for the most part legal. California’s gold rush led to a huge gambling boom, but the behaviour of those gamblers began to turn the tide of public opinion. California began to pass laws that made most types of gambling illegal – and other states soon followed suit.

Once again, gambling was driven underground – but this time around, there was one key difference: the mafia. By the late 1800s, when a new vice was declared illegal, it simply became a new product for the mob to start trading in – and gambling was no exception.


By 1910 horse racing was the only legal way to gamble – and even this was only legal in three states. Even these races were beset by fraud, with both the odds and the payouts regularly faked, and bookmakers actively influencing races with ‘ringers’ – so the mob-run underground casinos were the place to be. Business was booming -– especially in New York, with it’s Five Families running the show.

During the great depression of the 1930s it was believed legal gambling might help stimulate the floundering economy – and so various states began to decriminalise bingo, and soon after, horse racing.

This might have been good news for New York’s casino mobsters – except it coincided with a crackdown on their own illegal gambling operations, as officials railed against the violence between the gangs. It’s this crackdown that encouraged some of New York’s most notorious mobsters to head west – setting up casinos in Nevada, which had legalised gambling in 1931.


It was Benjamin ‘Bugsy’ Siegel who set up The Flamingo, the first mob-run Las Vegas Casino. By moving away from illegal underground gambling dens, and towards legitimate big-money gambling resorts, Bugsy changed the mob’s approach to gambling for good.

The operation of these resorts was far from above board – of course – but without their involvement, and their investment, the gambling landscape today would be very different indeed.