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From dust to digital: The rise of The Strip resorts

Reported by: Jessica Moore
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Updated: 9/19/2013 10:13 pm
This is part 4 of News 3's ongoing series: From Dust to Digital.

LAS VEGAS -- Howard Hughes was one of the wealthiest men on the planet; the only child of a Texas oil family that grew wildly wealthy from its patent on a specialized drill bit.

He went into the movie business, designed and flew cutting-edge aircraft, began purchasing real estate throughout the west, dated a-list celebrities and loved Las Vegas.

The Howard Hughes story is a memorable piece of the pop culture of the middle portion of the 20th century. It has been movie fodder, the subject of books, magazine articles and much speculation -- all of it questioning the sanity of a once-brilliant businessman who lived as a billionaire recluse on the ninth floor of the Desert Inn.

What’s often forgotten is that Hughes’ purchase of the Desert Inn and five other strip hotels in the late 1960s paved the way for corporate ownership of Las Vegas casinos.

It was a giant step in the evolution of Las Vegas Boulevard resorts and ushered in the final chapter of organized crime’s major hold on Las Vegas Boulevard.

The best-known strip resorts were built with financing from the Teamsters union pension fund and organized crime families in Kansas City, Chicago, Cleveland, New York and other major U.S. cities.

The dollars were funneled through front men and revenues from each hotel were shipped back home.

Bootlegger-turned-casino-operator Moe Dalitz effectively employed the formula at the Desert Inn, where the avuncular Wilbur Clark was the front man whose name appeared on the hotel’s signage, but it was the financially savvy Dalitz who ran the joint.

The financial relationship worked well throughout the 1950s and 60s as strip construction boomed with the piggy bank provided by organized crime.

But, the federal government under the Kennedy and Johnson administrations had grown weary of the mob’s role in Las Vegas, and they sought a savior.

Enter Howard Hughes: in return for buying up the hotels, Hughes received a commitment from the Johnson administration to purchase Hughes aircraft’s newest helicopters, according to a 1979 book by award-winning investigative reporters Donald Barlett and James Steele.

By 1970, Hughes owned 6 strip resorts, Kirk Kerkorian had opened the international hotel and organized crime’s last act along the strip was set to open a decade later.

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