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Best of John L Smith

Gaming Guru

John L Smith

Las Vegas, 1967: Kirk Kerkorian saves the Strip from itself

22 June 2015

You may not remember the time Kirk Kerkorian saved the Strip from its notorious self, but Lem Banker will never forget it.

Kerkorian, who died Monday at age 98, is credited for building the world’s largest hotel three times in Las Vegas. That record is unmatched, but it wasn’t his only big contribution to the casino pantheon. The timely purchase of the Flamingo was another remarkable move.

Banker, the legendary sports bettor, befriended Kerkorian in the 1950s and for years gave the billionaire his daily favorites.

“Kirk liked to play sports,” the 88-year-old Banker recalls. “He was following me on the games. I kept his head above water. At that time, I couldn’t pick a loser. I won a lot of money. I had runners all over the country. Guys in Miami, New York, New Jersey, all over.”

So it was no surprise back in 1967 that Kerkorian would bring Banker along on a trip to Miami Beach to purchase the scandalized Flamingo from the friends of Meyer Lansky. Two years before the International opened its doors, Kerkorian separated the Flamingo from the long shadow of Lansky and S&G Syndicate at a time federal agents were scouting the Strip for signs of organized crime’s hidden influence. There was plenty of it to find.

The Flamingo had known infamy since its 1946 inception with an ownership group headed by Benjamin “Bugsy” Siegel. It changed faces following Siegel’s 1947 murder, but behind the scenes some of the operators remained connected. In the early 1960s, the Flamingo’s majority owners Morris Lansburgh and Sam Cohen were known in the press as “Miami hotelmen,” but they were also Lansky loyalists whose luck on the Strip was running out.

Between FBI wiretaps and IRS agents following the money, the heat made casino bosses sweat up and down the Boulevard.

With a bankroll fat from his airline forays, Kerkorian’s real estate purchases on the future site of Caesars Palace and his own International next to the Las Vegas Convention Center would assume a legendary status of their own. But he decided to add the Flamingo to his portfolio, officially to provide a training ground for future International employees.

But it’s also true that a bust-out at the Flamingo with Lansky’s name in headlines would have been devastating to a Las Vegas that in those days was extremely sensitive about its mob connections.

Kerkorian’s International Leisure Corporation picked up the Flamingo for $12.5 million and added another $2.5 million in room expansion and upgrades at a time the boss was crafting the design of the International.

Banker was amazed by Kerkorian’s calm. Las Vegas Sun columnist Paul Price, a man who could smell a deal the way those talented swine sniff out truffles, was another passenger on Kerkorian’s Learjet. The men played gin rummy to pass the time, and as usual Price played cutthroat and wasn’t interested in carrying an I.O.U.

“When we got to Miami Beach, we immediately went for stone crabs on 79th Street Causeway,” Banker recalls. “We stayed at the Eden Roc Hotel.”

With someone else buying, money was no object to Price.

“Paul wasn’t just Kirk’s guest — he was a freeloader,” Banker says, laughing. “But I loved the guy.”

Once the deal was signed, the Las Vegas group departed for the airport and boarded the jet back to Nevada. Thanks in part to Price’s handy work, Kerkorian’s deal soon splashed in the press. The scandal-tainted Flamingo had been cleaned up by the dealmaking Kerkorian at a time when he was considered a second-tier Howard Hughes.

In time, the Flamingo deal would be all but forgotten as Kerkorian opened the innovative International in 1969 and followed with the MGM Grand in 1973, and a second, super-sized MGM Grand Las Vegas in 1993.

Pesky federal agents weren’t through with their investigation of the Flamingo, though. When it was discovered that a $250,000 finder’s fee from the sale had found its way into Lansky’s hands, those Miami hotelmen were back in the news.

The Flamingo fallout caught the interest of the Securities and Exchange Commission, which turned down Kerkorian’s attempt to place a second stock offering for International Leisure. He sold his hotels but kept it all in perspective.

“Sometimes you lose, but that’s the nature of the game,” Kerkorian said in a 1970 Time article. “There’s always another chance to win.”

Although Lansburgh and Cohen would eventually get their wrists slapped by U.S. District Judge Roger Foley, Lansky would be declared too ill to stand trial. With a young attorney named Oscar Goodman as his local lawyer, Lansky managed to slip the government snare and spent the rest of the 1970s on Collins Avenue in Miami Beach.

Banker’s fortunes would ebb and flow with the sports seasons. Even after almost 50 years, he still marvels at watching Kerkorian in action.

“He was just a great guy,” Banker says. “He was humble and street smart.”

Even when the heat was high, Kerkorian always kept his cool.