Archive for February, 2011

Las Vegas, Nevada, is a very unlikely place to find American history. After all, in this city people worship the future as they always look to the next pull of the handle, roll of the dice, or turn of the card. Also, they make a point out of forgetting that last loss. Just as a gambler would choose to “blow up” (figuratively) all past failures in the casinos, local entrepreneurs choose to “blow-up” (literally) the evidence of the city’s seamy past. Las Vegas implodes casinos. The city blows-up its history.
First, the Dunes fell in 1993, then the Landmark was imploded in 1995, and in 1996, the Sands bit the desert dust. The Dunes was pushed aside to make way for the new Bellagio Resort, the Landmark made way for a convention center parking lot, and the Sands (once the building was removed) became the site of the $2 billion Venetian Casino Hotel. Two of the implosions were used as footage for Hollywood movies. So there were economic and commercial reasons for taking these three icons away from our sight. But perhaps there were other motives in getting these venerable locations out of our minds. We do not have even a single plaque to recognize the significance of the locations, but if we did? Maybe one would simply say “Hoffa,” another might say “Watergate,” and the third just possibly might say “Prelude to Dallas, 1963.”
The Landmark was where Watergate began, because it was the reason behind Howard Hughes’s loan to Pres. Richard Nixon – and it is generally believed that it was not a loan, it was a bribe given so that when Nixon was elected, he would remove an antitrust action so that Hughes could buy the Landmark. Democratic Party chairman Larry O’Brien was working for Howard Hughes when the bribe went thorough, and it was information about that bribe that Nixon’s people were trying to get out of O’Brien’s Watergate office. I personally talked to Howard Hughes’s guy Robert Maheu, and Maheu said absolutely, the Watergate break-in was to get information about the bribe on the Landmark.
The Dunes just may have provided the motivation for the murder of Jimmy Hoffa. It was money from the International Brotherhood of Teamsters (the Teamsters’ union) that went to finance the Dunes – and Teamsters’ money was spread around Las Vegas—but the Dunes was the main place. The Teamsters’ loans had all sorts of crooked things around them. There were invitations to skim, and Hoffa got kickbacks on the loans. Hoffa’s successor Frank Fitzsimmons kept the loans going after Hoffa was in prison and then he kept them going after Hoffa was pardoned, but Hoffa could not run for union office.
Hoffa wanted to ingratiate himself with the Nixon administration. The federal government passed a new law in 1974 called the Employee Retirement Income Security Act, giving the Department of Labor and the Federal Bureau of Investigation special powers to investigate and prosecute union pension funds that were being misused.  I worked for the new pension administration in 1976 and 1977, and the story was still in the rumor mill. In 1974, Hoffa starts singing to the government in exchange for a change in his pardon so he could run for union office, and he was murdered. And what was he singing about before he was murdered? The Dunes. He was telling the government how Fitzsimmons was skimming money out at the Dunes much as he had done. Hoffa told about the Teamsters’ loan structure for constructing the property.
Ah! But the historical possibilities that lurked in the hallways of the Sands, at one time the most famous of all the resorts on the Las Vegas Strip. Denton and Morris (2001) tell many of the seedy stories that came out of the Sands. This was the home of Frank Sinatra and his “Rat Pack” This is where he held a secret ownership and where he solidified his alliances with Chicago mobster Sam Giancana. I always pointed to the Sands and said, well, in my mind it’s as good as the theory that Lee Harvey Osward acted alone. The theory that there was a plot to assassinate the president. If there was, it may have started at the Sands. It was not just the Rat Pack. The Sands was John F. Kennedy’s casino; that is where he met Judy Campbell Exner, through Peter Lawford (Rat Pack member and Kennedy brother-in-law) and Frank Sinatra. She was also the girlfriend of Sam Giancana, who was working with Salvatore Traficante to kill Fidel Castro. One scenario was that killing Kennedy was Castro’s revenge, because Kennedy was going with the girlfriend and must know about the Mob plot to kill Castro. Another scenario was that the Mob was compromising Kennedy and that they had the fix in that Kennedy would back off of Mob activities, but his brother Bobby Kennedy was a wild card and would not stop, and sort of screwed everything up, and the assassination was to get at Bobby Kennedy. But where did it start? The Sands (see Davis 1989).
I think it’s beautiful – the triple. Of course, I am happy to repeat the myths. It is a lot of history. Maybe now we will be more sterilized, part of the “we’re-a-clean-wonderful-town” thing. But it takes a little bit of the glamour away from Las Vegas.

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The casino is a social institution encompassing an array of interactions that focus upon patterned financial risk taking-gambling. Gambling is an activity that reflects the cultural values of a society. Indeed, the casino may be a microcosm of all society, sometimes an institution for social escape, sometimes an alternative social support system, sometimes an extension of a society. Accordingly we can find that the Latin American casinos reflect a dominant value in society – machismo.
In 1989, I witnessed casino managers setting up a cockfighting ring in the casino showroom of Casino del Caribe in Cartegena, Colombia. Locals were invited to bring in their prize birds for matched fights to the death. Actually the casino did not participate in betting on the fights, but it did permit its patrons to do so. The holding of a cockfight in a Latin American casino is doubly symbolic of the main cultural value extant in the society.
Anthropologist Clifford Gertz, in his “Deep Play: Notes on the Balinese Cockfight,” offers the arena of the cockfight as a metaphor for life on a South Seas island. He writes, “As much of America surfaces in a ball park, on a golf links, at a race track, or around a poker table, much of Bali surfaces in a cock ring… only apparently cocks that are fighting there. Actually, it is men”. He continues, “In the cockfight, man and beast, good and evil, ego and id, the creative power of aroused masculinity and the destructive power of loosened animality fuse in a bloody drama of hatred, cruelty, violence, and death”. Gertz related that the owner of the winning cock takes the losing bird home to eat, but in doing so engenders feelings of embarrassment mixed with “moral satisfaction, aesthetic disgust, and cannibal joy”.
Actually, as a legally recognized event, the cockfight is usually confined to Latin American countries.  It is in these countries that the set of ideas called machismo is most blatantly recognized and accepted as a guiding course of conduct for many members of society.
What is machismo? What does it mean, and where does it come from? Machismo has been called a “system of ideas,” a “worldview,” an “attitude,” a “style,” and a “personality constellation”.
Macho is a term dating back to at least the thirteenth century. The central value among the qualities of macho is maleness. Webster’s New World Dictionary (1975) defines macho as “strong or assertive masculinity”, and Webster’s New Collegiate Dictionary (1984) defines macho as “aggressively virile.” One achieves the ideal of maleness by displaying fearless courage and valor, welcoming challenges of danger and even death with daring. Positive values of pride, courage, honor, charisma, and loyalty are accompanied with negative values of recklessness and aggressiveness carried to extremes of violence. The macho man is quick to take insult, and he refuses to back away from fights. In sexual relations machismo is associated with chauvinistic behaviors. The woman is in all ways a subordinate partner in relationships.
Economic theories focus on the lack of employment, poverty, and the need of the male to migrate to other locations for economic sustenance – for opportunities to support his family. These are seen as forces taking the male away from the home and placing the young male child under the yoke of his mother. The child aggressively seeks to assert a male role in behavior designed to show an independence from his mother.
The ideas of machismo also are derived from a societal need for hero worship. El Cid, Don Juan, Pancho Villa—these and others stand up to the forces that subjugate the males of the society. They are revered for their charismatic appeal. The macho society becomes a society willing to follow, and the strongman ruler is idealized.
Machismo is manifested in myriad ways in the Latin American casino.

Charismatic Authority Structures
The forces of machismo have left a heavy measure of charismatic authority upon Latin American political entities. The caudillo – or “man on horseback” – gains power through battles where mystical leadership traits may be displayed. As a ruler, these traits allow him to win support for his decisions. Respect is only diluted if he relinquishes authority to subordinates. He certainly is very reluctant to permit alternative authority structures such as legislative assemblies to share real power with him.
The Latin casino industry is too often dependent upon the whims of leaders, and it often suffers dislocations when leadership changes hands. Many jurisdictions operate according to presidential decrees rather than deliberative legislative policy.

Violence: Suppressed but Ever Present
The machismo syndrome includes a glorification of violence and a measure of reverence for tools of violence. As suggested above, the macho man believes that the knife and gun, phallic symbols as they are, nevertheless are integral to feelings of manliness. The beliefs would be quite compatible with those of the board of directors of the National Rifle Association.
I asked the manager of the Royal Casino in Tegucigalpa, Honduras, if the sign was serious. He assured me that it was. The sign greeted visitors as they entered the casino door. It read (in both Spanish and English): “For everyone’s security, no weapons are permitted in the casino. Thank you.” When the casino first opened, the management installed twelve lockers to hold patrons’ guns. On the first day the lockers were completely full. Quickly the casino ordered an additional dozen lockers. These are now regularly full of weapons.
The casino managers interviewed in this study denied that violence ever erupted in their casinos. Several establishments, however, most notably those operated by governments, kept medical doctors on premises at all times when the gaming rooms were open. The casinos were certainly mindful of the stress associated with gaming wins and losses and were in a state of readiness in case of strokes or heart attacks.

Creditors, Debtors, and the Sense of Honor
A manifestation of machismo is witnessed in the ability to gain access to money. The macho can successfully borrow money. The true machismo finds ways not to pay it back. This kind of attitude can be dangerous for a casino organization.
Casinos in Latin America, especially ones managed by Americans, have been “stung” by local machos. They learned that it is easy to make loans to local players, but it is very difficult to get repayment. When they tried to collect, they found they were “insulting” the borrower by suggesting that he was indebted to them.  Some casinos will make loans only through local agents or if guaranteed by a local businessperson.

National Integrity
The sign on the side of the mountain hovers over the national capital. It is brightly illuminated in the evening, seeming to almost be the symbol of Tegucigalpa, capital city for a “sovereign” nation. The sign simply reads, Coca Cola. One of the driving forces of machismo is the notion that the male must personally compensate for feelings of inferiority derived from the subjugation of local populations by foreign interests, colonial masters from Europe, or economic masters from north of the Rio Grande. For this reason, most of the countries with casinos insist that gaming work forces consist of local citizens only.

Gender Roles in the Casinos
The casinos of Latin America exhibit employment discrimination against women. Several casinos do have women dealers. These invariably are gaming halls controlled by Americans or foreign nationals and those in Puerto Rico. In Vina Del Mar, Chile, women are permitted to work only on low-stakes games or games not considered to be games for serious players.
Discrimination against women is defended with phrases such as “We would like to have women dealers someday. But we are not ready for that now.” In one casino I was told that it would not be good. “It is the Latin blood, you know.” Part of the message was that male players did not feel comfortable having women controlling their fate by turning cards or spinning the wheels. The casinos felt that the male players would harass the women dealers and seek to compromise their integrity at the games. The casino operators know that the macho man is just too much; the women inevitably submit.

The Games Machos Play
The macho man is favored by supernatural forces. If he is brave, he will keep the favor of his gods. Bravery is really more important than cleverness or rationality. Games such as craps and blackjack offer very good odds to the player, but the good odds can be exploited only by educated play, which involves a long-term commitment to the gaming activity. The machos favor casino games of roulette and baccarat, games based upon the luck factor. In roulette the macho challenges fate by going for the single number.
When playing blackjack, strategy play is rarely seen, and card counters are almost nonexistent. Players would often split tens, and then they hit 18s and 19s. It seemed that a successful hit on a 19 was evidence of daring and a display of manliness.

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The automotive industry came to Detroit by accident. The industry could have been located elsewhere. But Henry Ford set up shop in Detroit. There he applied ideas of mass assembly and economies of large scale to the construction and distribution of automobiles. Detroit was centrally located with railroad lines and Great Lakes transportation. It attracted the best labor from populations swelling with European immigrants. Ford’s successes attracted other industry innovators and leaders. With his leadership, Detroit came to hold undisputed leadership in the auto industry that lasted into the 1960’s.
Today when we think of quality, however, we do not think of the American automakers. We look to the Japanese, who have cornered a third of our domestic market. Although just twenty years ago Detroit was on a roll, that ended. Similarly, for sixty years, when people thought of casinos, they thought of Nevada. Now there is competition. Will Nevada share the same fate as Detroit?
In 1931 Nevada legalized casino gambling. In the 1940s gaming personalities such as Bugsy Siegel, Meyer Lansky, and Moe Dalitz played roles similar to those played by Henry Ford: They made their product accessible to ordinary people. In the world market, at the same time, the effects of war kept other countries from embracing mass-produced gambling. Now, however, there is casino gambling in many areas of the North American continent and in a preponderance of countries of the world.
Let us look at the factors that led to the downfall of Detroit and ask if they will have the same impact upon Nevada.
Groupthink. Detroit was “blindsided” as the forces of groupthink led automakers to believe that their success would last forever.
Is groupthink present in Nevada? Casino managers may feel they “know it all.” Yet in order to maintain a dominant market position, they must accept new ideas whatever their source. Yet this is not the case. Nevada’s larger and more fluid casino leadership group reaches out for new knowledge. Casino projects need new financing, and the financing necessarily comes from the outside. With the outside money comes new ideas.
Innovations in marketing. Henry Ford achieved profits by marketing a basic product to the masses. The notion of making a few models to realize economies of scale became part of management thinking. Year-to-year model changes were essentially cosmetic. When customers wanted real variety, Detroit did not give it. Japan did. The Japanese manufacturers demonstrated an ability to introduce new models by taking only three years to produce a new product. Detroit took five years.
In the gaming field, Nevada may view production as a mass operation allowing for cosmetic changes only. The new operators on the rivers and on the reservations, however, many of whom are Nevadans, are showing that they can put new approaches into place quickly, aimed at completely different markets.
Customer demand. Detroit would not listen to the customer. The “Big Three” – General Motors, Ford, and Chrysler – kept making big cars. They were the last to hear the cry for quality. “Recall” became the industry byword. Competitors came to understand that problems with cars were customer problems.
Customers coming to Las Vegas have many demands, and sometimes Nevada has been slow to listen.
Customers want more than just a gambling table. One group of foreign casino tourists asked for a tour of Death Valley. Management balked. They were a gambling house. They refused to help find a means to take the group to Death Valley, hoping, of course, that the group would decide to remain in Las Vegas. The group located a bus company that would transport them. They were given a very complete tour, and they returned to Las Vegas with one thought on their minds – sleep. If the casino had catered to these guests, they could have organized a more relaxing four-hour tour of Death Valley that included slot play beforehand and afterwards, a dinner show, linking gambling and tourism together.
Casino management must capitalize on the tourism value of Nevada by working closely with customers.  Managers need to work a lot more on listening skills if they hope to avoid a Detroit-like fate in the future.
An easily replicated industry? The automobile industry symbolized America’s world economic dominance. Dominance continued as long as other nations lacked capital resources to duplicate factories. As soon as others found resources to invest in manufacturing, they replicated our auto industries. They realized that they could make cars as efficiently as we did and that they could meet the needs of American consumers as well. Although a car factory can be rather easily replicated, a gaming environment such as Nevada’s cannot. Its industry is built upon an infrastructure of variety, entertainment choice, inexpensive hotel accommodations, an ambience of good weather, and constant offerings of many special events. Multiplier factors. Automobile manufacturing is desirable because the factory jobs involved have a high multiplier effect. As many as six residents can be supported from the activity of one autoworker. As autoworkers are laid off, other jobs are also lost. The demise of the Detroit auto industry has been quickened by this negative multiplier. The multiplier effect in the casino industry is less pervasive. It is greatly influenced by the residence of its gamers. In Nevada, most are outsiders. In new gaming jurisdictions, most players are local residents. If these jurisdictions cannot offer gaming to patrons who come from outside the region, economic growth will be elusive. As future experiences are analyzed, there will be less pressure on other jurisdictions to seek to replicate the Nevada gaming scene. Expertise. Japanese car manufacturers demonstrated an ability to quickly learn the American market and to deliver products that met demands of Americans. They were good competitors. The same cannot be said for several non-Nevada gaming operators. Las Vegas has witnessed the experiences of four Japanese-owned casino operations. Only one was successful. Also, in foreign arenas, casino gaming is not conducted in a manner that will lure Nevada customers away. Nevada need not fear foreign operators, either within or outside the United States, The experts are in Nevada. Economic incentives. Labor costs and other provisions provided disincentives for automobile manufacturers to remain in Michigan. The Nevada casino scene is quite different. Gaming employees are not unionized, and wages are standardized at lower levels. Most other casino jurisdictions have higher wages, and dealers are organized. Taxation. Government taxation – both national and local – has driven the cost of automobile production to uncompetitive levels for Detroit automakers. The taxation situation has been a major incentive for auto plants to relocate. Gaming operations will not relocate outside Nevada for taxation reasons. Nevada casino taxation is the lowest of any jurisdiction – just over 6 percent. New Jersey has a gross tax approaching 12%, and most European casinos assess taxes of 50 percent or more on gambling wins. Conclusion
The factors that brought decay to the Detroit automobile industry appear not to be major concerns for the Nevada gambling industry.

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