Bugsy Siegel: The Gangster Who Built Las Vegas
Benjamin "Bugsy" Siegel was the most glamorous gangster of the American Mafia's golden age: handsome, violent, impulsive, and possessed of a visionary instinct about the future of entertainment that was decades ahead of the men around him. He is best known as the driving force behind the Flamingo Hotel, the Las Vegas casino that launched the desert gambling industry, though the real story of his life is considerably more complex and far darker than the romanticized Hollywood version.
From the Lower East Side to the Murder Inc. Contract
Benjamin Siegelbaum was born February 28, 1906, in the Williamsburg section of Brooklyn, the son of poor Jewish immigrants from Austria. He grew up in a neighborhood where crime was one of the few available routes to prosperity, and he took to it with extraordinary natural aptitude combined with a violent temper that made him genuinely feared.
He met Meyer Lansky on the streets of the Lower East Side as a teenager and the two formed a lifelong partnership. Their Bugs and Meyer Mob hired itself out as enforcement muscle, ran a fleet of bootleg liquor trucks during Prohibition, and developed gambling operations that generated reliable cash. Siegel provided the physical presence and the willingness to do violence; Lansky provided the strategic thinking and the accounting. Together they were a formidable combination.
Siegel became one of the founding members of Murder Inc., the enforcement arm of the national organized crime syndicate that Lucky Luciano and Meyer Lansky assembled in the early 1930s. Murder Inc. was a Brooklyn-based operation run by Louis "Lepke" Buchalter and Albert Anastasia that carried out contract killings on behalf of the national organization. Siegel was one of its most active operators in its early years, personally involved in dozens of murders that remained unprosecuted for decades.
His nickname "Bugsy" — which he hated — derived from the slang term "bugs," meaning crazy, applied to describe his explosive rages and his willingness to commit violence where other men would calculate consequences.
Moving West: Hollywood and the California Operations
In 1937, the national syndicate sent Siegel to Los Angeles to develop operations on the West Coast. California represented an enormous untapped market for illegal gambling, bookmaking, and the wire services that delivered race results to betting parlors. Siegel was the right man for a frontier operation: charming enough to navigate Hollywood society, violent enough to intimidate local competition, and ambitious enough to build something lasting.
His connection to Hollywood was not merely strategic. Siegel genuinely enjoyed the company of movie stars. His friendship with actor George Raft went back decades. He socialized with Clark Gable, Cary Grant, Gary Cooper, and Jean Harlow. He had a long affair with actress Virginia Hill, the red-haired socialite who would eventually become his most consequential relationship and whose financial management of the Flamingo funds would contribute to his death.
The Trans-America Wire Service that Siegel controlled gave the mob a stranglehold on West Coast bookmaking that generated enormous profits. He muscled out local operators, brought mob discipline to California gambling, and built the infrastructure that would make the West Coast a significant profit center for the national organization.
The Flamingo: Vision, Excess, and Disaster
The idea of a luxury casino resort in Las Vegas was not entirely Siegel's. El Rancho Vegas had opened in 1941 and the El Cortez was operating downtown. But Siegel's concept for the Flamingo was different in scale and ambition: a genuine resort hotel with celebrity entertainment, fine dining, a pool, and a casino that matched or exceeded anything available in established gambling destinations.
He named it after his nickname for Virginia Hill, whose flamboyant red hair reminded him of a flamingo. Hill was also handling the project finances, a situation that would prove catastrophic.
Construction began in 1945 with an initial budget of $1.5 million. By the time the Flamingo opened on December 26, 1946, costs had ballooned to over $6 million. Mob investors who had put money into the project were furious about the overruns, which many attributed to Siegel's profligacy, others to Virginia Hill diverting funds to Swiss bank accounts, and some combination of both.
The opening was a disaster. Rain kept celebrity guests away. The hotel rooms were not yet complete. The casino lost money the first two weeks. Siegel closed it temporarily, finished the hotel, and reopened in March 1947 to much better results. The Flamingo was beginning to make money by the time its founder ran out of time.
The Murder and Its Aftermath
On June 20, 1947, Benjamin Siegel was sitting in the living room of Virginia Hill's Linden Drive house in Beverly Hills, reading the Los Angeles Times. A gunman fired through the window with a .30 caliber military carbine. Siegel was hit nine times and died instantly. He was 41 years old.
No one was ever charged or convicted of the murder. The most credible theory, supported by later mob testimony and FBI files, is that the hit was ordered by Charles "Lucky" Luciano and Meyer Lansky after the New York bosses concluded that Siegel had either stolen from the Flamingo construction fund, mismanaged it catastrophically, or both. The Las Vegas casino was finally beginning to generate profits, making Siegel's removal easier to justify and his continued existence more expensive than his death.
The morning after Siegel's murder, representatives of the Chicago Outfit, the Cleveland mob, and other organized crime interests walked into the Flamingo and took over management. The mob's investment in Las Vegas, nearly destroyed by Siegel's excesses, was about to become the most lucrative criminal enterprise in American history.
Siegel's Actual Legacy
The romantic myth of Bugsy Siegel as a lone visionary who built Las Vegas out of the desert with nothing but charm and audacity is appealing but inaccurate. He was a violent murderer who overran a construction budget and was killed by the partners who had trusted him with their money. His actual contribution was building a hotel that worked, even if not on the economics that had been promised.
The real Las Vegas story belongs to the dozens of mob-connected investors who followed Siegel's template, learned from his mistakes, and built the casino empire that would define Nevada for the next five decades. Meyer Lansky's skimming operations. Moe Dalitz's Desert Inn. The Stardust. The Sands. The Riviera. These were the buildings that made Las Vegas, and they were built on the precedent Siegel set and the relationships he developed while alive.
FAQs About Bugsy Siegel
Did Bugsy Siegel build Las Vegas? Siegel built the Flamingo Hotel, the casino resort that established the template for luxury gaming in Las Vegas, though the modern Las Vegas Strip was built over the following two decades by other mob investors who learned from his mistakes.
Why was Bugsy Siegel killed? The most credible theory is that Siegel was killed by order of his mob partners after massive cost overruns at the Flamingo Hotel led to accusations that he had stolen or mismanaged their investment.
Did Meyer Lansky order Bugsy Siegel's death? Lansky's role in ordering or approving Siegel's murder is debated by historians. Some accounts suggest he gave reluctant approval; others that the decision was made over his objections by Lucky Luciano and the New York bosses.
What does "Bugsy" mean? Bugsy derived from "bugs," slang in the early 20th century for crazy or mentally unstable, describing Siegel's volatile temper and willingness to commit violence. He disliked the nickname throughout his life.