Federal panel concedes mob is out of casino industry

Thursday, June 3, 1999 | 10:56 a.m.

SAN FRANCISCO -- The National Gambling Impact Study Commission voted Wednesday to leave little doubt in its report to the nation that organized crime no longer wields influence in the casino industry.

At the suggestion of Commissioners Terry Lanni and Bill Bible, both aligned with the casino industry, the panel voted to include language that suggests "effective regulation" and corporate America's "takeover" of the industry have "eliminated organized crime from the ownership and operation of casinos."

The final draft presented to commissioners this week concluded only that organized crime was "all but eliminated."

"My point of view was very simple," Lanni said after the vote. "The record that was presented to us, both in testimony and research, clearly indicated that there was no organized crime left at all in the gaming industry either directly or indirectly. And I thought it needed to be modified, and I was pleased my fellow commissioners accepted that."

Added Bible, Nevada's former top gaming regulator: "Our predecessor commission in the 1970s dealt extensively with organized crime, and that's an issue we really have not talked about to any extent, which is attributed to the regulatory efforts and the industry's efforts to clean up the industry. "

The organized crime reference is contained in the third chapter of the report, which will be delivered to Congress and the president on June 18.

"Fairly or not," the report explains, "Nevada's casinos were once closely linked in the popular mind with organized crime, a bias given substance by repeated federal and state investigations and prosecutions of casino owners and operators."

Several Midwest mob bosses were convicted and sent to federal prison in the early 1980s for skimming profits from Las Vegas casinos.

Since then, while Wall Street has strengthened its ties to the industry, the mob has given up its foothold on those casinos.

The clean bill of health from the federal commission confirms what Nevada regulators and law enforcement authorities have been saying for some time.

Though gone from the casinos, the mob still remains active on the streets of Las Vegas, which is regarded as an "open city" for the nation's 26 Mafia families.

The FBI disclosed in 1997 it had conducted an undercover investigation aimed at breaking up an attempt by the Los Angeles and Buffalo crime syndicates to muscle in on Las Vegas street rackets.

Chicago underworld figure Herbie Blitzstein lost his life in the attempted takeover.

Blitzstein was a confidante of slain Chicago mob kingpin Anthony Spilotro, who was among those wielding hidden influence at Las Vegas casinos in the 1970s and early 1980s.