1800s - New Orleans

Some of the first casinos in American were established during the early 1800s in New Orleans, along the Mississippi River. Although, at that time, there were no casinos on the riverboats themselves, informal gambling was a popular way for travelers to pass the journey. Professional gamblers, called "sharps", would target wealthy passengers and relieve them of their money. Gambling moved westward with the expansion of the railroads and flourished during the time of the California gold rush and the Nevada silver era.

Las Vegas in Nevada owes its success to the mobster Benjamin "Bugsy" Siegel who organized gaming and bookmaking operations for The Mob (the Mafia). Due to a crackdown on gambling in the eastern USA, Siegel moved west in the 1940s. During the Great Depression gambling had been legalized in Nevada to increase revenue for the state, but what existed in Las Vegas at that time were a few decidedly down-market casinos that were frequented by the locals.

1946 - Las Vegas

Siegel planned to open a luxurious hotel where the rich and famous could gamble and, after a failed attempt to take over an existing casino, he decided to build his own. Once Siegel had managed to convince The Mob to invest in his idea, building started, but costs escalated from initial estimates of $1.2 million to over $6 million, because everyone, including Siegel, was stealing money from the project. It is rumored that the palm trees were sold to the casino several times over and that Siegel's girlfriend, Virginia Hill, was accumulating money in a Swiss bank account.

The Mob soon discovered Siegel's skimming and ordered him to be killed, but decided to give him a reprieve until after the opening.

The Flamingo Hotel and Casino finally opened on 26 December 1946. A huge party was organized, with many of the film stars of the day in attendance. The hotel was not finished, so the guests had nowhere to sleep. They parties for two days and then went home.

The Flamingo was a flop and Bugsy Siegel was eventually killed by The Mob in 1947, but his dream of making Las Vegas into a gambling canter survived.

1950s - Las Vegas Grows

As other businessmen realized that Las Vegas had potential as a resort, investment flowed into the town. The Desert Inn Casino opened in 1950, followed by the Sands Casino in 1952, with the Dunes, and the Riviera opening in 1955.

Despite gambling being illegal, casinos continued to operate elsewhere in the USA thanks to widespread corruption in the police and government. One of the most luxurious "illegal" casinos was Chicago's Big House which operated between 1929 and 1950. Run by associates of gangster Al Capone, it was elegantly furnished, with mahogany gaming tables, oriental rugs and a free taxi service to shuttle players to and from Chicago's south-side. The club was also the headquarters of a countrywide bookmaking operation.

During the 1950s virtually all the casinos in Las Vegas were controlled by The Mob. A US senate investigation into criminal activity in the casino industry found that skimming (retaining a portion of the profits) was rife, resulting in tax evasion on stakes and profits.

When legislation allowing corporations to own Las Vegas casinos came into being in 1965, entrepreneur and multi-millionaire Howard Hughes was the first to take advantage of this change in law, buying the Desert Inn and several other casinos, as well as plots of land in the city. When MGM, Hilton and Holiday Inn followed suit, the finances of the mob proved to be no match for the might of the major corporations, and gradually the casino industry was cleaned up.