The pivotal role of organized crime in the rise and evolution of Las Vegas is an open secret.
The city’s construction was heavily financed by mob funds, and the connection between gambling and the mafia is a longstanding one.
Indeed, the image of modern Las Vegas is incomplete without the presence of the mob!
While it’s easy to relegate organized crime, or Cosa Nostra as it’s known in the United States and Sicily, to the annals of history, the reality is far from idyllic. Organized crime remains a vibrant force in contemporary society and the gambling industry.
However, as sports betting becomes legalized globally, particularly in the United States, there’s speculation that organized crime’s influence in sports gambling may be waning.
Mafia’s Legacy in Betting
The modern era of mafia and sports betting has seen its share of notorious figures. Here are some key individuals every gambler should be familiar with:
Benjamin “Bugsy” Siegel
Siegel, a notorious gangster from a Jewish immigrant family in Brooklyn, was known for his extreme violence, earning him the nickname ‘Bugsy.’ He led a notorious group of hitmen called ‘Murder, Inc.’
At 35, he moved to the West Coast, eventually settling in Las Vegas. Using his Cosa Nostra connections, he opened the Flamingo Hotel and Casino in 1946, which stands as the oldest operating casino on the Strip and the only pre-1950 establishment still active.
Siegel met a violent end in 1947, murdered before the completion of his casino. A life taken by the violence it lived by.
Franky “Lefty” Rosenthal
Rosenthal, who inspired the film Casino, began his illicit career in Chicago, overseeing the city’s largest illegal bookmaking operation.
In Las Vegas, he covertly managed several casinos owned by Chicago mob families, including The Stardust and Fremont. He introduced several innovations, such as hiring female blackjack dealers, which significantly boosted profits. Despite surviving an assassination attempt in 1982, he was ousted from the casino business, banned from Nevada casinos in 1988.
Yet, he left the scene unscathed, a rarity among former mafia members.
Tim Donaghy
Donaghy, a former NBA referee, became infamous for betting on games he officiated, drawing the attention of the mafia. Threatened by mobsters, he manipulated games to favor certain outcomes, aiding bettors and bookies.
The scandal erupted in 2007, a stark reminder of the mafia’s enduring influence in sports.
The Future of Legal Gambling and Its Impact on Sports Betting
The expansion of legal sports betting has led to conjecture about its potential to undermine organized crime. The rationale is straightforward: with legal betting options available, why would bettors risk legal repercussions by gambling illegally? Could the legalization of sports betting deliver a fatal blow to the mafia’s financial interests and purify the betting landscape?
Our analysis suggests a definitive “no,” for several reasons.
Firstly, legal gambling requires a bankroll upfront, unlike betting with a bookie, where payment is due only upon loss. This dynamic can be perilous for addicts betting beyond their means, and it’s a compelling reason why some will always prefer illegal bookmakers.
Secondly, the mafia profits immensely from manipulating sports outcomes or exploiting confidential information, as highlighted by the Donaghy scandal. This practice is both historical and ongoing, with the mafia keen to maintain its lucrative edge.
Lastly, the allure of tax-free winnings from illegal bookmakers is undeniable. Legal gambling entails a paper trail and subsequent taxation, deterring high rollers and those placing substantial bets from opting for legal avenues.
Considering historical patterns, it’s likely that illegal betting will persist for the foreseeable future.