Howard Hughes' Bizarre Takeover of the Desert Inn and Vegas
Howard Hughes checked into the Beverly Hills Hotel in 1954 under an assumed name. By 1966, he was buying the Desert Inn with cash. What he did next changed Las Vegas forever.
Words by Rita Sanchez3 min read
Howard Hughes checked into the Beverly Hills Hotel in 1954 under an assumed name. By 1966, he was buying the Desert Inn with cash, cutting a check for 13.2 million dollars because he did not want to deal with a mortgage. What he did next changed Las Vegas forever.
Hughes Before Vegas
Hughes was the heir to the Hughes Tool Company fortune. He made aircraft. He made movies. He owned Trans World Airlines. He was one of the richest men alive. He was also increasingly eccentric, increasingly paranoid, increasingly isolated.
In the early 1960s, Hughes became obsessed with Las Vegas. Not as a tourist destination, but as a business opportunity. He believed the casinos were run by organized crime (a reasonable belief in 1966). He believed he could clean up the industry and make billions in the process. He also believed the government was spying on him. These two beliefs would collide.
He bought the property not because it was valuable but because it was available and he had cash.
The Desert Inn Purchase
The Desert Inn was built in 1950. It had a pool shaped like a golf course. It had a golf driving range. It was one of the few casinos where a guest could pretend to be doing something other than gambling. Hughes lived in the Desert Inn for four years without leaving the building, eventually renting the entire top floor and sealing the elevator to the roof.
He bought the property not because it was valuable but because it was available and he had cash. 13.2 million dollars in 1966 money is roughly 130 million today. He paid it like someone might pay for a house.
The Acquisition Spree
Over the next few years, Hughes bought:
- The Sands Hotel (1966, 13.2 million)
- The Frontier Hotel (1966, 13.2 million)
- The Beverly Hills Hotel (1967, 10 million, the property not the business)
- The Castaways Hotel (1967, 5.5 million)
- The Landmark Hotel (1968, 17.3 million)
- The Golden Nugget (1968, ownership stake)
- The North Shore property (1968, 1.8 million)
By 1968, Hughes owned or controlled roughly 10,000 hotel rooms, more than any other individual or entity in Las Vegas. He was attempting to purchase a casino on roughly every major street in Vegas.
In 1966, Las Vegas casinos were operated by families connected to organized crime.
Why This Mattered
In 1966, Las Vegas casinos were operated by families connected to organized crime. The Genovese family, the Luciano family, other crews from the Northeast and Midwest. Federal prosecutors knew this. But mob-run casinos were profitable. The government tolerated them.
Hughes was attempting to buy them all and run them legitimately. He saw this as a chance to clean up the industry. He also saw it as a chance to build an empire that paid him a percentage of every casino in Vegas.
Federal prosecutors were delighted. An eccentric billionaire cleaning up Vegas was better than prosecuting the mob families. They encouraged Hughes. They actually blocked him from buying some properties because they wanted to maintain federal control over who could own casinos, but for the most part, they let him buy.
What Went Wrong
Hughes hired managers, then fired them. He made decisions, then reversed them. He demanded to know exactly how much cash was being carried in each casino, how many chips were in the cages, what every employee was doing. He demanded this information while never leaving his hotel room.
He was not managing a business; he was collecting information like a paranoid recluse collects surveillance footage. His managers could not function because he was constantly second-guessing them.
He also became involved in Nevada politics, trying to influence the state gaming commission and the governor. This made him enemies among traditional Vegas operators and casino managers.
The Decline
By the early 1970s, Hughes's health was failing. He was increasingly sedated on drugs. He was not able to manage the casinos. His organization began to fracture. Managers left. Properties were sold. By 1976, most of his Vegas holdings were gone.
But the damage (or benefit, depending on your view) was done. The mob's grip on Vegas was loosened. Legitimate operators became more viable. The transition from mob-run to corporate-run casinos accelerated.
The Legacy
Hughes is remembered in Vegas as the billionaire eccentric who tried to buy the city. He did not, ultimately, but his attempt forced the city to evolve. After Hughes, Vegas was never again a mob town in the way it had been.
Today, the casinos are owned by corporations: Caesars, MGM Resorts, Wynn Resorts. Professional managers run the operations. The days of a single operator controlling the entire city are gone.
Hughes never achieved his dream of a Vegas empire. But he changed the city anyway, just by trying.