Casino Capitalism, Part II

Casino Capitalism, Part II

In olden times, when you read about the Nevada Gaming Commission looking into the ownership of Las Vegas casinos, the story was always about the commissioners sniffing around for evidence of organized crime’s hidden interests. As anyone who’s watched Martin Scorsese’s Casino (which sticks fairly close to Vegas’s actual history) can attest, the Mafia families that owned the hotel-casinos on the Vegas Strip had to find fronts—obliging attorneys, developers and the like—to serve as the ostensible owners and executives for the Sands, the Flamingo, the Stardust, the Tropicana, and so on. The agreed-upon fiction was that by enforcing a rule that convicted felons could have no role in owning or running the gaming tables, the Commission would keep Vegas clean.

Today, the Mafia is more a memory than a going concern, and its control of Vegas has long since ended. Recently, however, the Commission has been asked to look into the ownership of some Vegas casinos by a new shady character: the global financial behemoth Deutsche Bank. The Vegas local of UNITE HERE, the hotel workers union—a local I profiled for the Prospect back in 2004—has asked the Commission to determine whether Germany’s largest bank is a suitable owner for the city’s Station Casinos, a company that has thwarted its employees’ attempts to unionize, and in which DB has a 25 percent ownership share. As the union’s complaint correctly notes, DB paid a $2.5 billion fine this spring for its role in illegally manipulating the LIBOR interest rate on inter-bank loans to its own advantage and to the detriment of virtually everyone else. Its co-CEOs were compelled to resign as a result of the scandal. 

Out goes the Mafia, in come the banks. Won’t Vegas ever clean up its act?