Moe Dalitz

Updated February 7, 1999 - 7:18 pm

If you want to understand Las Vegas history, you must get to know Moe Dalitz.
Consider that no mean feat, as Dalitz died in 1989 and in life was a private man. Dalitz gave few in-depth interviews in his lifetime, but much was written about him.
Las Vegas history is filled with characters who lived double lives. The life of Moe Dalitz is perhaps the best example of a gambling man existing in sunshine and in shadow.
His story might have been penned by Horatio Alger had he written scripts for “The Untouchables.”
Early in his life, Dalitz was a bootlegger and racketeer mentioned in the same breath as Meyer Lansky and Benjamin “Bugsy” Siegel. In Cleveland, one longtime member of law enforcement would tell the Kefauver Commission, “Ruthless beatings, unsolved murders and shakedowns, threats and bribery came to this community as a result of gangsters’ rise to power.” Dalitz was considered part of that rise.
Given the nation’s fascination with organized crime, fueled in no small part by Hollywood and blood-soaked banner headlines during Prohibition’s many whiskey wars, early in his life Dalitz reached something akin to a celebrity status as a runner of rum and operator of roadhouse gambling parlors from Cleveland to Newport, Ky. If Dalitz never achieved Lansky’s moniker of “financial genius of organized crime,” it was not because he was less successful.
Unlike Lansky, whose inability to shake off early-won infamy forced him into the shadows throughout his life, Dalitz made the improbable transition from underworld figure to legitimate citizen. If local police detectives and FBI men suspected Dalitz of wrongdoing during his latter years, they dared not whisper such criticism without ample evidence. By the time Dalitz reached his prime, his financial empire and formidable string of businesses were legitimate.
It didn’t start out that way.
Morris Barney Dalitz was born Dec. 24, 1899, in Boston. The son of a laundry operator, Barney, Moe grew up at his father’s side. The family moved to Michigan when Moe was still a child, and his father opened Varsity Laundry in Ann Arbor, which served University of Michigan students. Although he would become known first as an illegal liquor and gambling racketeer, Moe was a successful laundry operator throughout most of his life. It was a labor action associated with his laundry business that introduced Moe Dalitz to Jimmy Hoffa, future president of the Teamsters union, the labor organization that one day would be responsible for lending Nevada gamblers the millions it would take to build the first wave of casino resorts in Las Vegas. Dalitz was attempting to keep his laundries from organizing and, according to author James Neff, at one point hired Mafia thugs to make his point.
Once he became associated with mob muscle, a door opened and Dalitz gravitated toward the lucrative and dangerous Prohibition-era liquor trade. All the while he took profits and invested them in legitimate businesses in Detroit and later in Cleveland, where law enforcement noted that he had become associated with the Mayfield Road Gang.
In fact, by the 1930s his list of legitimate businesses was impressive. Dalitz held an interest in the Michigan Industrial Laundry Co. in Detroit and the Pioneer Linen Supply Co. in Cleveland and percentages in the Reliance Steel Co. and the Detroit Steel Co. And there was Milco Sales, Dalitz Realty, Berdene Realty and the Liberty Ice Cream Co. He even owned a piece of the Chicago & Rock Island Railroad.
Unlike common rumrunners, who wound up either dead or incarcerated, Dalitz was not a simple man. His operation ran Canadian whiskey in trucks floated on barges across the Great Lakes.
During Cleveland’s liquor wars, where local mob factions battled for market share, Dalitz came away unscathed. By the repeal of the Volstead Act, he had opened a series of illegal casinos with names like the Mound Club, Pettibone Club, the Jungle Inn, the Beverly Hills Club and the Lookout House.
“How was I to know those gambling joints were illegal?” Dalitz once quipped to a friend. “There were so many judges and politicians in them, I figured they had to be all right.”
In the 1940s Dalitz served his country more than cards, dice and clean shirts. He also served in the Army, rising to the rank of second lieutenant. But when the war ended he found himself reluctantly returning to an increasingly complex business life at home. Stated bluntly, the heat was on across America as law enforcement and high-ranking politicians vilified illegal gamblers and their ilk as a societal scourge.
So Moe Dalitz did what any gifted businessman in his racket might have done. He migrated to Las Vegas, where casino games were legal and gamblers were men to be respected. At the time, Las Vegas and Havana vied for dominance as legal gambling centers. Dalitz dabbled in Cuban casinos, where his friend and bootlegging ally Meyer Lansky had invested many millions, but was more impressed with what was happening in the Silver State.
Dalitz led a group of Cleveland investors, including Sam Tucker, Thomas McGinty, and Morris Kleinman, first in the purchase of the then-incomplete Desert Inn, which opened in 1950. Dalitz not only was an experienced casino man, but he also understood that gamblers wanted more than green felt. He also gave them greens, developing the Desert Inn Country Club and creating the Tournament of Champions golf tournament, which focused a positive national spotlight on Las Vegas.
A year after the Desert Inn opened, Sen. Estes Kefauver focused another kind of spotlight on gambling. The Kefauver hearings concerned themselves with the phenomenon of gambling and organized crime in America, as well as with promoting the political careers of senators who portrayed themselves as mob-busting Puritans. Dalitz appeared before the Kefauver committee and more than held his own.
KEFAUVER: “As a matter of fact, you had been making a great deal of money in recent years, so I suppose from your profits from one investment you would then go ahead and make another investment. Now, to get your investments started off you did get yourself a pretty good little nest-egg out of rum running, didn’t you?”
DALITZ: “Well, I didn’t inherit any money, Senator … If you people wouldn’t have drunk it, I wouldn’t have bootlegged it.”
The critics came and went, but Dalitz kept on building his financial empire and paying his taxes. (In a lifetime of nefarious activity allegations, Dalitz was indicted twice. Once in 1930 in Buffalo, N.Y., for bootlegging. Once in 1965 in Los Angeles for tax evasion. Both charges were dismissed.)
In 1958, Dalitz and his associates used millions in Teamsters loans and dollars borrowed from Louis Jacobs’ Emprise Corp. to take over the Stardust from a group led by Jake “The Barber” Factor. The new crew of efficient casino men turned the Stardust into a winner by expanding the number of rooms and the gaming area and adding a Parisian-style floorshow.
Dalitz shied away from interviews, which sooner or later usually led to hard questions about his notorious days in the rackets. But he was not without a sense of humor and his own sense of imagemaking.
“When I left home it was during Prohibition in Ann Arbor, Michigan, and I went into the liquor business while it was illegal,” Dalitz once told a local reporter. “Then when the Repeal came along, we went into the casino business in Kentucky and Ohio where it was illegal. I learned everything I know there.”
If readers didn’t know better, they might think Dalitz led an almost colorless life.
To a friendly interviewer from “The Saturday Evening Post,” he gave his spin on the phenomenon of gambling: “Let’s say gambling isn’t moral. Neither is drinking to excess. I think Las Vegas has given people lots of fun. Sure, some will get hurt. But listen, they can go to Atlantic City and get into more danger in a crap game than here, where there’s supervision.”
By 1962, there was plenty of supervision to go around. Dalitz had long since become a major player on the Strip and in Las Vegas business development in general. He was a 13.2 percent owner of the Desert Inn. His longtime partners, Morris Kleinman and Ruby Kolod, each held a similar percentage. Wilbur Clark, the Desert Inn’s co-founder who was not originally a member of Dalitz’s Cleveland group, held 17.1 percent but had no real decision-making power.
By then, Las Vegas business leaders were impressed with Dalitz and marveled at his success. But in their diatribe on the evils of Las Vegas gambling, “The Green Felt Jungle,” authors Ed Reid and Ovid Demaris were less impressed.
“In a recent interview, Ed Reid was stunned when Dalitz burst into tears,” Demaris and Reid wrote.
” ‘Why, why,’ he implored, his arms rising in supplication, the tears streaming from his hard little eyes, ‘why are they persecuting me?’ ”
” ‘Who?’ Reid inquired.”
” ‘Them. All of them! I’ve fought hoodlums all my life. What are they trying to do to me?’ ”
The conclusion of Reid and Demaris echoed the opinion of law enforcement: “He was a sanctimonious little mobster from Cleveland …” they wrote in a chapter lambasting Dalitz for his old ties and notorious friendships. “He is still a hoodlum in conscience and mind, but his heart has weakened.”
But Dalitz was far more complicated than that. At a time many of the state’s gamblers remained inactive politically, Dalitz was a driving force behind Pat McCarran, one of Nevada’s most powerful U.S. senators. It was Dalitz who pushed McCarran to publicly fight a devastating federal tax on sports betting, eventually reducing a wagering surcharge to a paltry quarter of 1 percent from more than 10 percent.
Through his longtime friendship with Hoffa, Dalitz had a quiet but formidable influence on loans to Las Vegas businesses from the Teamsters Central States Pension Fund. Law enforcement investigators long speculated that one word from Dalitz could secure millions in low-interest financing.
Dalitz used his clout with the Teamsters to build more than casinos. He and his partners used a $1 million Teamsters loan in 1959 to build Sunrise Hospital. Other dollars flowed into golf course and shopping mall development during years in which most lending institutions laughed at entrepreneurs from notorious Las Vegas.
Did he also maintain his old roots to the rackets?
More than one FBI informant and government witness would allege he did.
“The Cleveland Mob maintained strong ties to Las Vegas and worked at making new ones,” Neff wrote in his investigative work on the Teamsters, “Mobbed Up.” “The Mafia’s ruling commission had declared Las Vegas an open city, so each crime family was entitled to stake out different casinos as their exclusive territory. The Cleveland family got in early with the Desert Inn. Its principal owner, Moe Dalitz, served as an informal referee in territorial disputes among the different Mafia crews, as Jackie (Presser) informed the FBI in 1978.”
By the late 1970s, Dalitz was considered a senior member of Las Vegas casino society, but also the subject of several damaging pieces of investigative journalism, not the least of which was a Penthouse magazine article titled “La Costa: Syndicate in the Sun.” Using government sources, the story detailed the development of La Costa, the posh spa community near San Diego and left the impression that Dalitz and his fellow investors were men of less than savory repute. A defamation suit filed by Dalitz, Allard Roen and Irwin Molasky was eventually settled with a letter of clarification.
By then, Dalitz’ suitability was being questioned by image-conscious Nevada gaming authorities.
“Moe was always such a gentleman,” Las Vegas advertising executive and longtime Dalitz friend Marydean Martin said. “He gave back to the community. When the Maude Frazier Building (at UNLV) was built, it had no furniture. He bought all the furniture and didn’t want anybody to know about it. He was that kind of person.
“Moe almost never complained, but he was feeling down. He said, ‘I’ll bet your grandpa drank whiskey,’ and I said that he did. ‘I’m the guy who made the whiskey, and I’m considered the bad guy. When does the time ever come that you’re forgiven?’ ”
“I said, ‘I don’t know.’ It was one of the very few times he ever said anything about it.”
Las Vegas cab company owner and former Stardust Hotel general manager Herb Tobman knew Dalitz well.
“He never turned me down for anything charitable,” Tobman recalled. “I was in awe of meeting him. As far as I’m concerned he was a great man … Moe’s charity is legendary around this town. There has never been a greater influence on this city.”
Dalitz was named Humanitarian of the Year by the American Cancer Research Center and Hospital in 1976. In 1982 he received the Torch of Liberty Award by the Anti-Defamation League of B’nai B’rith. In 1979 he set up the Moe Dalitz Charitable Remainder Unitrust, a million-dollar fund to be divided upon his death. When Dalitz died a decade later, 14 nonprofit organizations split $1.3 million.
His contributions to the growth of Las Vegas are priceless.


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