Nevada Newsmakers

Battling Chicago Outfit, 'Lefty' Rosenthal came with danger & death, former Gaming Control Board member Jeff Silver says

News - October 22, 2021

Jeff Silver's nearly four-year stint as a member of Nevada's Gaming Control Board came in the mid 1970s, when The Chicago Outfit secretly ran many Las Vegas casinos. It was time etched in the American consciousness, reflected in the Robert De Niro classic movie, "Casino."

The main character in that iconic movie was Sam "Abe" Rothstein. He portrayed Silver's real-life nemesis, Frank 'Lefty' Rosenthal, the iconic Las Vegas anti-hero, who reportedly ran the Stardust, Fremont, Marina and Hacienda casinos for the Chicago Outfit during most of the 1970s.

Silver, recently inducted into the Gaming Hall of Fame, is credited for helping clean up Nevada's No. 1 industry and end the Chicago Outfit's heyday.

He said on Nevada Newsmakers that he did not realize the extent of organized crime's influence on Nevada's No. 1 industry when he was first appointed to the GCB in 1975 by then-Gov. Mike O'Callaghan.

"I did have some (understanding ), especially with the governor's comment to me that one of the purposes of my appointment was my prosecutor's background," Silver told host Sam Shad. "He wanted to make sure I did everything necessary to clean up the industry and free it from organized crime's influence.

"But I really didn't know how entrenched things were," he said.

What came next were years of investigations and multiple denials of Rosenthal's applications before the GCB. All the while, he still secretly ran casinos for organized crime.

"A week before I actually took the position, (Mob boss) Sam Giancana was murdered in Chicago and I started paying more attention to the fact that these guys played for keeps and it may not be as simple as anybody portrayed it," Silver said.

Silver also escaped murder after organized crime leaders discussed -- then decided against killing Silver -- because of the potential heat it could bring down on them for assassinating a leading state-government official.

"There was a time when the FBI agents asked me to come down to the bureau's offices and they were concerned about a taped transcript they had gotten in Kansas City and they showed me this transcript," Silver said. "It was about eight or nine pages and in the transcript, they kept referring to this guy, 'Silverman,' on the gaming board and they were thinking about taking me out. And in the last page, they said, 'No, that would create too much heat.'

"And I breathed a sigh of relief and the agents who were standing over me reading this thing were laughing because they knew that in the end, they had abandoned their plans to kill me," Silver said.

Rosenthal was unknown to Silver when he began on the GCB. He casually mentioned his name to a former FBI agent because Rosenthal would soon be before the Board in a seemingly routine gaming-license hearing. With that, his education about Rosenthal and The Chicago Outfit began.

When the former agent heard the name, "Rosenthal," he said to Silver:

"'Oh, you mean 'Lefty,' and I hadn't heard that," Silver said. "And he said, 'Yeah, when I was in the Bureau, I used to chase him around South Florida. He was a bookmaker.

"And then he said, 'By the way, did you ever get any information on him in your reports about his attempts to bribe college athletes?' He was testifying in front of a congressional hearing on college athletes and organized crime infiltration.' I said, 'No I hadn't heard a word about it.'

"And he said, 'Well, I was counsel for the committee and I have the transcripts of those hearings in my garage.' He says, 'I'll send them to you.'"

In a few weeks, Silver received the package.

"There were these bound transcripts and in the transcripts, there was Frank Rosenthal taking the Fifth (Amendment defense of self incrimination) to all these questions about bribing college athletes and activities in organized crime."

When Rosenthal appeared before the CGB, Silver had both barrels loaded with stinging questions for Rosenthal.

"When the time for questioning came, this was in Carson City, in January or February of 1976, the (GCB) chairman turned to me and said, 'Mr. Silver, do you have any questions?' And I proceeded to question Mr. Rosenthal about those transcripts for the next seven or eight hours one day and another three-or-four hours the next."

It was pretty heady stuff for a 29-year-old prosecutor to be sparring with Rosenthal's lawyers. One, Oscar Goodman, would later become a popular and highly-visible mayor of Las Vegas.

The other, Harry Claiborne, would become a U.S. District judge, later imprisoned for tax evasion and impeached, convicted and removed as a federal judge by Congress. At this time, however, they were considered brilliant criminal defense lawyers.

"It was definitely tense facing down the likes of Oscar Goodman and Harry Claiborne, his counsel," Silver said.

Silver had exposed Rosenthal. His gaming application was denied. Yet Rosenthal kept control of the Stardust Hotel's casino by assuming the title of Food and Beverage Manager. He later to moved to the role of "Entertainment Director" as a way to stay a step ahead of the GCB's authority.

"After he was denied as the casino director of the Stardust, he (Rosenthal) moved to the food and beverage director's position, which was a position that was not covered by the gaming regulations at the time," Silver said. "And they actually had to change the regulations in order to capture him in that instance."

The Gaming Control Board's investigation into Rosenthal turned deadly, Silver said.

"There were some allegations going on about some false invoicing and things of that nature where people actually came and visited with me, one of whom was not seen since," Silver said. "They found his car at the McCarran Airport, abandoned, and no one has ever seen this guy alive.

"So they were obviously playing for keeps there," Silver said.

"When he was denied as Food and Beverage Director, then he came back as Entertainment Director because there was a law that was put in place for Frank Sinatra, who was accused of hosting Sam Giancana when he was an owner of the Club Cal-Neva and they were afraid that he would not be able to perform or they would not be able to enter into contracts with him at Caesars Palace," Silver said. "So they put an exception into the law for entertainment directors and that is how Rosenthal got in there for a period of time."

Silver remembers Rosenthal's third GCB run-in, which he says, "Is the scene you see in the movie with Sen. Reid as the chairman.

"The reason he was nabbed there was about dispute at the Stardust Race and Sports Book and Rosenthal came down and answered the questions of the agents regarding why they shouldn't make the payout. And that kind of nailed him in terms of saying he wasn't involved in the other aspects of the operation."

Through his tribulations, Rosenthal remained a celebrity in Las Vegas. He had his own late-night TV show on KLAS-TV-Channel 8 -- a mirror image to 'The 'Ace' Rothstein Show' in 'Casino.'

"I was astonished," Silver said about Rosenthal's foray into late-night TV. "I watched it a number of times. He would take a few shots at me after the first licensing hearing, calling me a panhandler's snake or something like that. He was very, very upset. He had a tremendous ego and for him to be denied this job that paid a lot of money and was prestigious and gave him a lot of authority over other peoples' lives, he was very upset about it."

Later, Silver and the GCB realized how much of a grip Rosenthal had over casino operations in Las Vegas.

"I took a tour of his house in the last couple of years and he had all kinds of electronic equipment in there," Silver said. "He was actually running the casino from his home, hard wired at the time because they didn't have the Internet, hard wired so he could see with cameras what was going on."

Rosenthal, however, made an indelible mark in the history of Las Vegas, inventing the concept of a casino sports book, Silver said..

"He rose to prominence as a result of the fact of his bookmaking acumen," Silver said. "And when the federal government reduced the federal excise tax to a point to where a book inside a casino could make money, he was tabbed by the people in Chicago to open this big book at the Stardust Hotel.

"And it turned out to be the model for all of the race books in these brick-and-mortar casinos," Silver added. "It was really quite avant garde at the time and it turned out to be very successful. But he was the guy who had the ability to run a book like that and then he graduated into other positions of responsibility as the trust level he was given by his handlers in Chicago increased."

In 1982, Rosenthal escaped an murder attempt when a bomb was placed under his gas tank. Soon after, he moved to Laguna Niguel, Calif., and raised children, who became championship swimmers. In 1987, he was listed in Nevada's "Black Book," which came with a lifetime ban from Nevada casinos. In 1990, with Goodman as his lawyer, he won a case to have his named removed from the "Black Book."

However, the Nevada Supreme Court reversed the decision in 1991. He passed in 2008, at 79, a man Sports Illustrated once called, "The greatest living expert on sports gambling."

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