Frank Costello was calling it a night.
After enjoying a dinner at L’Aiglon on the East Side with friends, Costello demurred on a drink at the Monsignore restaurant, instead opting to catch a cab to his apartment building at 115 Central Park West, where he planned to make a few phone calls.
As the reputed boss of all bosses of American organized crime entered the lobby, a hulking gunman burst from the shadows and fired a single bullet at Costello’s head. Costello crashed to the ground, bleeding, as the shooter ran out the door and into a waiting Cadillac. But Costello, a veteran of the criminal underworld since Prohibition, wasn’t so easily dispatched. Incredibly, the bullet caused only a flesh wound, drawing a shower of blood that would make Abdullah the Butcher jealous without doing any real damage.
Costello refused to identify his gunman or say anything to police. “I don’t have any enemies,” he told Deputy Chief Inspector Edward Byrnes. “I have lots of friends.” When further pressed on whether the shooting might have been related to his reportedly winning $150,000 from Midwestern gamblers on the recent Sugar Ray Robinson middleweight title bout, Costello only said, “I don’t discuss my investments or my business.”
However, a piece of paper police officers discovered in Costello’s pocket while he was at Roosevelt Hospital was more eloquent. “Gross casino wins as of 4-26-57,” it read. “$651,284. Casino wins less markers $434,595.00. Slot wins $62,844,” followed by a list of amounts paid to “Mike,” “Jake,” “L.” and “H.” Investigators later determined that, over its first 24 days of operation, Las Vegas’ new Tropicana casino had earned … exactly $651,284. For the next 60 years, the Tropicana would be home to some of Nevada’s most respected gaming executives, a massive skimming operation, a purloined fortune and corporate buyouts. If any single property reveals the many facets of the Las Vegas casino business, it might be the Tropicana.
An Upscale Oasis in the Desert Dust
It started with a man and a dream. Ben Jaffe was a part owner of the Fontainebleau Hotel, which opened in Miami Beach in December 1954. Designed by Morris Lapidus, the luxe 565-room masterpiece inspired its competitors to undertake their own renovations. The following year, Jaffe bought a 40-acre piece of land on Highway 91 and Bond Road, far south of the Flamingo, then the southernmost resort on what was already being called the Las Vegas Strip.
Jaffe wasn’t eager to dive into the nuts and bolts of casino/hotel operations. So his company, Bond Estates, leased the property to Hotel Conquistador Inc., a company chiefly owned by “Dandy” Phil Kastel, who had previously partnered with Frank Costello in the Beverly Club, a “gambling joint” just outside of New Orleans, as well as a substantial slot machine operation. Both ventures folded after the Kefauver Committee’s investigations, but Kastel boasted of his continuing friendship with Costello. Kastel publicly oversaw construction of the property despite having not been licensed as an owner. Nor was the name of Meyer Lansky publicly mentioned, though Lansky was omnipresent in Miami and a close associate of Costello.
That spring and summer, five new resorts opened in Las Vegas—none of which lasted the year under their original owners. While the opportunities were there, success was far from guaranteed. But Kastel was optimistic: “I can see,” he said, “where the whole Strip’ll be hotels in 10 years. It’ll be the playground of the whole United States.” Those predictions were as common then as resort fees are today, but a few words show Kastel’s real prescience. “They ought to stress the resort part of Las Vegas a little more,” he said. “A man wants to gamble, he’s gonna gamble, but there’s no point in putting a rope around his neck and saying, ‘Here, gamble!’”
The Tropicana fielded a veteran executive team. Robert Cannon started as an auditor at El Rancho Vegas before becoming its general manager; he had served in the same role at the Last Frontier and was brought in as the Tropicana’s GM. Veteran show producer Monte Proser designed the signature Tropicana Revue. Louis Lederer, who formed the casino’s executive committee together with Chicago real estate operator T. M. Schimberg, was one of the founders of the Sands and also had an interest in the Fremont. But the Trop’s biggest coup was hiring the “dean of Las Vegas gaming executives,” J. Kell Houssels Sr., as casino manager. Starting with a card club before the 1931 re-legalization of commercial gambling, Houssels had owned shares in and managed the Las Vegas Club, El Cortez and the Showboat. The experienced staff promised to help the Tropicana succeed where so many others had recently failed.
The Tropicana started a special preview for locals at 10 a.m. on April 3, 1957, then opened officially the following day. The 12th casino resort to open on the Strip, the Tropicana was hailed as a step up and a step ahead. The three-story hotel’s Y-shaped design was intended to resemble a necklace; practically speaking, it gave more guests easier access to the pool area, in accordance with Kastel’s stress on the resort aspect. But the Trop’s design was about more than convenience: Architect M. Tony Sherman dressed up an ugly necessity—a water-cooling tower—as a petal-like fountain beside the hotel’s entrance.
Opulence was what set the Tropicana apart. Built by Taylor Construction, which had previously constructed the Riviera on the Strip, as well as Miami’s Fontainebleau and Eden Roc, the Trop cost $15 million—substantially more than the $8.5 million high-rise Riviera and $2 million more than Miami’s Fontainebleau. The Tropicana was believed to have been the most expensive resort yet built in Las Vegas—though at 300 rooms, it was a third of the size of the planned Stardust, which would open the following year. Hailed as a welcome addition to Las Vegas, the Tropicana seemed to be off to a flying start. Even in a town built on glamour, the “Tiffany of the Strip” stood out.
Some, however, feared that the Tropicana was too upscale for Las Vegas. “We’ve made a success appealing to the casual dresser with our ‘Howdy, pardner’ atmosphere,” an unidentified insider told the New York Herald Tribune. “I hardly think you’ll ever see much informality at the Tropicana.” Still, it looked like the Tropicana’s opulence was going to make it a winner.
Topless Showgirls, Bottomless Wallets
Costello’s shooting changed everything. By June, New York and Nevada investigators had confirmed the link between the wounded mob kingpin and the new resort—only after the famously close-mouthed Costello had served a 15-day prison sentence for refusing to interpret the note or identify its authors. Tropicana president T. M. Schimberg issued a statement categorically denying any link between the hotel and Costello, despite the note and Kastel’s known relationship with the underworld boss. Upon further investigation, it was learned that the note was written by Lederer, the casino’s executive director and largest official stockholder, along with cashier Michael Tanico, who had worked for Kastel’s Beverly Club.
How to deal with this bombshell? Cautiously. The Gaming Control Board concluded that Lederer and Tanico were solely responsible for the note. Tanico had already quit, and the board recommended that Lederer be removed from the Tropicana. That left the problem of Kastel, who had never been licensed. The Board determined that he had made an investment of $320,000 in the casino and allowed the Tropicana’s owners to retire that debt at $40,000 a year. Other than that, no immediate changes were demanded.
It has been said elsewhere that Houssels was chosen by the Board to bring respectability back to the Tropicana. In fact, that was never the case. Houssels was a 6 percent owner and casino manager when the hotel opened, though he sold his interest and resigned as manager later that year. But when the casino was forced to close after a string of losses in 1958, Houssels returned with a shopping bag crammed with cash. His liquid assets and his sterling reputation convinced authorities to reopen the casino within hours. The following year, he bought a majority of outstanding stock in Hotel Conquistador Inc., the casino’s operating company, and assumed complete control.
The opening of the Stardust dimmed a bit of the Trop’s luster—not because of the building, but because of the entertainment. Imported from France, the Stardust’s Lido de Paris featured French sophistication and, more viscerally, topless showgirls. Not to be outdone, Houssels tabbed entertainment director Lou Walters to bring in Les Folies Bergere, a similarly bare-breasted 9th Arrondissement revue. Opening on December 24, 1959, the Folies would run until 2009. The Folies was expensive—it cost $750,000 to initially stage—but it gave the casino a then-rare attraction and allowed it to forgo pricey headliners. The lounge continued to host stars from Count Basie to Herb Alpert to Louis Prima, satisfying guests’ desire for top-flight entertainment in a less-formal setting. The Tropicana gained another amenity in 1961 when landlord Ben Jaffe opened the golf course and country club across Bond Road, which was eventually renamed Tropicana Avenue. Two additional hotel wings more than doubled the resort’s room count by 1962.
Houssels remained, with his son Kell Houssels Jr., the majority owner of Hotel Conquistador until 1968, when the Houssels sold out to a subsidiary of Trans Texas Airways. There were no changes at the resort, however, as Houssels remained at the helm. But in 1972, Minnesota banker and former college professor Deil Gustafson bought Hotel Conquistador from Trans Texas for $1.52 million. Following the sale, Houssels and many top executives left the Tropicana for Downtown’s Union Plaza.
Under Gustafson’s tenure, the Tropicana added a new showroom, the Superstar Theater. Supplementing the golf course was Nevada’s first indoor tennis pavilion, with former world champion Bobby Riggs as resident pro. But those additions did not translate to a stronger balance sheet, so Gustafson sought additional investors. One was Sammy Davis Jr., who became the first African-American to own a share in a Strip resort. The Gaming Commission approved brothers Fred and Ed Doumani, who had bought a 50 percent share of the Jaffe estate’s interest, to temporarily operate the Tropicana in late 1974.
The next year, Gustafson found a savior in Mitzi Stauffer Briggs, the wealthy heiress to the Stauffer Chemical Company fortune, who invested $6.5 million in the hotel. By August 1977, she was approved to purchase 65 percent of the Tropicana and replace Gustafson as primary owner, though he retained a 20 percent share. In 1979, the Tropicana opened a $20 million, 22-story hotel tower, whose 570 rooms made the Tropicana competitive with newer properties. A doubling of casino space and the addition of a new shopping area also inspired optimism.
A Tangle of Mob Ties
This is where the story turns sour. The Tropicana hemorrhaged money despite Briggs pumping more than $10 million into it. With no casino experience whatsoever, she relied on others for advice, and Briggs’ confidantes did not have her best interests at heart. Briggs’ chief adviser was Joseph V. Agosto, who had joined the Tropicana as vice president of construction when Gustafson was fighting off the Doumanis’ attempts to wrest control of the casino from him. Agosto had been able to use his connection with Nicholas Civella, alleged leader of the Kansas City mob, to prevent the Doumanis from getting a Teamsters pension fund loan. After Gustafson ultimately had to sell to Briggs, Agosto remained with the Tropicana as director of entertainment. However, his influence extended far beyond the Folies Bergere, all the way into the casino cage, where he was able to mastermind a skimming operation that netted hundreds of thousands of dollars for Civella and his associates. Briggs’ reliance on Agosto’s judgment allowed him to solidify control.
Then, on Valentine’s Day 1979, the FBI raided the Tropicana. The feds had learned of Civella’s hidden influence at the Tropicana thanks to Operation Strawman, a wide-ranging eavesdropping scheme dramatized in Nick Pileggi’s book and Martin Scorsese’s film, Casino. When the dust settled, Agosto had turned state’s evidence and testified against his former associates. Casino manager Carl Thomas was convicted of the skimming but, in return for testifying against alleged mobsters in the related case at the Stardust, was released from prison early enough to perish in a single-automobile accident in Oregon. Gustafson served more than three years in prison after his conviction on mail fraud, misapplication of bank funds and conspiracy for a $4 million check-floating scheme he’d initiated in another attempt to retain control of the Tropicana. Briggs avoided prison—even the defendants agreed that she had been duped—but lost most of her fortune in the fiasco. After she surrendered her casino license, the Doumanis gave her a job at their Carving Cart restaurant.
After a decade of questionable practices at the Tropicana, the Gaming Commission was ready to take action. Federal indictments were more serious than a note in a mobster’s pocket, and 1979 was a much different time than 1957. The Gaming Commission quickly demanded that the Tropicana find new owners.
Corporate Takeover
A national hotel corporation came to the rescue. In July, Ramada Inns Inc. announced that it had agreed to purchase Hotel Conquistador Inc. and 50 percent of Tropicana Enterprises, the casino’s landlord. The deal was consummated by the end of the month, and the new owners were officially licensed in November. Ramada was, at the time, the world’s second-largest hotel chain, owning 650 hotels; with them in charge, the Tropicana finally settled down into corporate respectability. The company continued the remodeling and expansion program already underway, but the mounting recession would push further growth in Las Vegas off the table. The Tropicana, like many other properties, reacted to the recession by emphasizing the middle market; it started a slot club and sponsored bus trips from Los Angeles, Phoenix and Salt Lake City. The Tiffany days were long gone, and Ramada believed the path to prosperity lay through the quarter slots.
In December 1984, the company broke ground on an ambitious $70 million expansion that would add a new hotel tower, a convention center, restaurants and a five-acre landscaped “island paradise” around the pool area. Now promoted as “the Island of Las Vegas,” the new Trop was geared toward business and tour groups. The Tropicana’s entertainment featured headliners such as Ben Vereen, Don Rickles and John Tesh, as well as laughs at the Comedy Stop. The venerable Folies Bergere, promoted as “Las Vegas’ longest running production show,” became an institution.
And yet Ramada could not seem to find a winning formula. By 1989, the company owned four casinos—Las Vegas’ Tropicana, Atlantic City’s TropWorld, Laughlin’s Ramada Express and Eddie’s Fabulous 50s in Reno, which closed in August of that year. It had sold more than 90 of its hotels and the Marie Callender restaurant chain in an effort to shore up its casino operations … which lost millions each year.
With more competition looming in both Las Vegas and Atlantic City—where Ramada earned the majority of its casino revenue—the company took action, selling off its wholly owned hotels and properties and renaming itself Aztar, a name intended to “evoke the wealth of the ancient Aztec empire.” The company’s immediate moves in Las Vegas, though, involved downsizing, as it sold the Tropicana Country Club and Golf Course to Kirk Kerkorian, who built the MGM Grand on its land. Aztar responded to the sudden growth around it (within three years, MGM Grand, Excalibur and Luxor opened; with Monte Carlo, Mandalay Bay and New York-New York on the horizon) by adding a series of bird and reptile exhibits in the hallway connecting its two towers, now named Paradise and Island, in 1993. This wasn’t a pirate battle or even a white tiger habitat, but it was in keeping with the island theme. Another attraction, the Casino Legends Hall of Fame, opened in a former downstairs bingo room in 1999, but only lasted until 2005.
In 2002, Aztar finally bought the remaining portion of the Tropicana’s landlord from the Jaffe family, consolidating the property. This might have seemed like the prelude to more growth, but Aztar instead focused on a $245 million expansion in Atlantic City, though it considered building a new 2,500-room resort adjacent to the existing Tropicana.
Dealing Hands, Changing Hands
In 2006, Las Vegas visitation, room rates and real estate values were all booming. Aztar and its 34 acres of Strip land became a prime acquisition target, and a four-sided bidding war for the company unfolded that spring. Regional casino operator Pinnacle Entertainment Inc. started by offering $38 a share. Colony Capital, an investment firm that owned five casinos, jumped in, as did regional operator Ameristar.
But it was Columbia Sussex—owners of Lake Tahoe’s Horizon and MontBleu, as well as Las Vegas’ Westin Casuarina and other properties—who carried the day with a $54/share bid that valued Aztar’s Las Vegas land at $30 million an acre. Columbia Sussex owner William J. Yung III announced a massive expansion proposal: Not one or even two new towers, but 9,500 new rooms and a $3.5 billion makeover. The company’s regulatory difficulties in New Jersey, coupled with the recession, doomed that plan, and the Tropicana fell into bankruptcy.
Onex Corporation, a private equity fund based in Toronto, snapped up $200 million of the Tropicana’s debt in 2009, which enabled it to wrest control of the hotel from Columbia Sussex. The company tapped Alex Yemenidjian, a former MGM Resorts executive, to lead the casino back to profitability. Onex invested $180 million in revamping the Trop, debuting a sparkling white South Beach theme in 2011. The refresh repositioned the property as a middle-market alternative, but it was only a prelude to the 2015 sale of the casino to Penn National Gaming, the Pennsylvania-based owner of more than 20 racetracks and casinos, including the M Resort. Penn bought not just 1,500 rooms on the Strip, but one of the few classic Las Vegas resorts still operating. The company has invested $20 million in the Tropicana, and is currently in the middle of a remodeling and expansion program.
As the Tropicana celebrates its 60th anniversary—a rare milestone in Las Vegas—it can look back on a history that includes attempted mob boss assassinations, topless showgirls, wild lizards, skimming scandals and corporate buyouts. The Tropicana has had a little bit of everything.
