Cuba, Fulgencio Batista and Meyer Lansky

[CrackSmokeRepublican]

Chip Venues & Their History

by Steve Piccolo

Piccolo, August, 2000

    Cuba

        This piece was put together by Steve Piccolo about the Casinos of Cuba and, in particular, Meyer Lansky. It is a compilation of excerpts from the book, "Little Man-Meyer Lansky and the Gangster Life" by R. Lacey and several smaller articles in various Herz auction catalogs. He has crafted these excerpts into reading evern more interesting to "casino" historians only.

    The history of the style and impact of gaming in Cuba has a clearly defined point of transition. Cuba had gained a reputation as the playground of the eastern United States in the 1920's that continued into the 1930's with evidence of the effects of the depression. With the commencement of World War II, Cuba as a playground destination, suffered from the war on the high seas and the lack of commercial shipping which was being diverted to the war effort. With the termination of the conflict in Europe and soon the ending of hostilities in the Pacific, Cuba awaited only the mending of the American economy to resume its position as the playground of the Eastern seaboard. In March 1952, Fulgencio Batista made himself president of Cuba for the second time. Batista, who ruled Cuba from 1933 to 1944 made the mistake of offering his government to the approval of the country in a national election and lost. Batista resided in Florida for a period of time following his democratic defeat. Cuba was not doing that badly, in fact, when Batista seized power in the spring of 1952. Havana had a claim to being the world's premier play city - the Paris of the New World, swaying to the rhythms of its rumbas and sambas and mambos, which it exported to Europe and America via a dozen white-tuxedoed orchestras, the hottest dance bands anywhere on earth. The one problem was the gambling.

    Havana's gaming was a free-for-all - no more regulated than a fairground whose operator subcontracted the individual sideshows and stalls. The Cuban owners of the city's nightclubs were leasing out their gaming rooms - and sometimes even individual games and tables - to just about anyone who claimed to have a bankroll to risk. Some were serious, professional operators. But had less experience - and less bankroll. The come-on games like cubolo were the result of this. They offered quick returns on minimal investments. Stories proliferated of gullible American tourists being cheated by smiling and plausible dealers - some Cuban, but many American - who brought the cards and dice to their table, and who took their money off them as they ate. "The President of the Republic," announced the Havana Herald on February 10, 1953, "has given definitive instructions to the various police forces to intensify measures of protection for foreign tourists." It was "unprecedented," said the newspaper, for the president to express himself personally on this subject, and he had dispatched the minister of the interior on a tour of Havana's gaming rooms to look out for fraudulent multidice games like cubolo and razzle-dazzle, a variant on the theme. The Cuban Tourist Commission even had a form printed which authorized visitors who believed that they had been cheated to stop payment on their checks.

    These measures had scarcely had a chance to work, however, when, at the end of March 1953, the Saturday Evening Post ran an expose' headlined on its cover, "Suckers in Paradise: How Americans Lose Their Shirts in Caribbean Gambling Joints." The author of the article, Lester Velie, had been on a thorough tour of Havana's nightspots. All, he reported, had succumbed to the operators of razzle-dazzle, cubolo, and the come-on games, and must now be considered "bust out" joints - or fraudulent. Nor were the traditional casino games above suspicion.

    Most dealers in Havana were dealing blackjack from a hand-held pack, which was open to manipulation, rather than from a box, which had long been the standard practice in America. In the length and breadth of Havana the reporter could discover only two locations where the gambling was honest. One was the so-called "louse ring" underneath the grandstand at the Oriental Park horse track, where Cubans gambled with Cubans for modest stakes. The other was at the very opposite end of the scale - the Montmartre Club, a luxurious, plush-and-glit, third floor establishment a few blocks away from the Nacional Hotel in downtown Havana. The operation of the Montmartre's gaming tables had recently been taken over by Meyer Lansky. The serious high-rollers knew cheating when they saw it, and there was no suggestion of sleight-of-hand or come-on games in the Montmartre Club. To the contrary, thanks to Meyer Lansky, honestly conducted high-stakes gambling was still alive and well in one corner of Havana, at least.

    Batista's return to power was the singularly most influential event in Cuban gaming as it signals the beginning of the rise of Cuban casinos to international reputation and the founding of an empire of "Las Vegas" style casino action. Meyer Lansky's dreams for Cuba had been tested in southern Nevada beginning with his former partner Bugsy Siegel's venture with the Flamingo Hotel. Following Siegel's death in 1946, the Flamingo's operation was perfected by others and as additional casinos were established on the strip, their action and return on investment was verified. To have "Las Vegas" style gaming in not only an unregulated environment but to have the only "regulator", the government, firmly bound by a friendship of mutual benefit was ideal. President Batista invited Meyer Lansky to become his advisor on gambling reform, and to carry out, on a larger scale, a cleanup job like the one he had performed so effectively at the racetrack and at the Gran Casino Nacional in the late 1930's. Lansky might be an outlaw in America, but in Cuba he was welcomed as the man who knew how to put things straight.

    Fulgencio Batista saw the enhancement of revenues from foreign visitors, and from Americans in particular, as a major source of future income for Cuba - and for himself. With the development of hotel chains and airline travel in the early 1950's, tourism was just starting to be seen as an industry in its own right, and the new president enthusiastically endorsed it as a priority of his new regime. One of his first actions was to reorganize the old National Tourism Corporation - "to assist and stimulate private enterprise," as Batista later wrote.

    Cuba's climate and beaches, its proximity to New York and Miami, "the striking beauty of our women," and "the traditional hospitality of our people" were all assets that were sadly undeveloped, in the opinion of the new president. He simplified entry regulations so that Americans could spend up to a month in Cuba without needing a visa and could also bring their private cars and boats with them. At Barlovento, to the west of Havana, canals were planned for a marina-housing development, with a view to luring the investment of Floridian boaters who lived in similar developments in Miami and Fort Lauderdale.

    And when it came to gambling, it was Batista's ambition, with the help of Meyer Lansky, to turn Havana into the Monte Carlo of the Caribbean. The first priority was to flush out the crooked gambling subcontractors. The only casino operator in Havana for whom Meyer had any respect was Santo Trafficante, Jr., son of the numbers boss of Tampa, Florida. Trafficante, ten years younger than Meyer, had been operating in Cuba since 1946. Quiet of manner, with a crew cut and spectacles that gave him the air of a college professor, Trafficante went about his business conservatively. Meyer also knew, and had less respect for Norman Rothman, the Sans Souci gaming room operator. Meyer warned Rothman, in so many words, "You run clean, otherwise, you can't operate," and the Sans Souci stopped its program of come-on games. But other dishonest croupiers, many of them Americans, continued to operate on a free-lance basis. They had been approaching victims away from the gaming tables - in restrooms, even - with their card shuffles and dice games that a sucker "just could not lose." On March 30, 1953 - two days after the Saturday Evening Post expose' - Cuban military intelligence arrested thirteen such cardsharps, all American, and immediately deported eleven of them.

    Cuban gaming opened up for the winter season of 1954-55 in its reformed state. Blackjack everywhere was dealt from a box, not from the hand. Floor men became "ladder men," hoisted up to sit in little jockey seats, atop stepladders, from which they could more effectively spot sharp practice at the tables - and where they could very obviously be seen to be making that inspection. Most important, the nightclubs offered no house room to the operators of razzle-dazzle, cubolo, or any other come-on games.

    The fairground had been policed. There were no more newspaper stories about tourists being swindled in Havana, and the American embassy was able to close its file on the subject. The last complaint about dishonest Cuban gambling practices dated from the spring of the previous year, at the same time as the Saturday Evening Post article, and referred to an incident that had happened the previous New Year's Eve.

    Meyer Lansky's Montmartre Club remained the premier destination for high rollers. The Montmartre did not have floor shows or ambience to match the under-the -stars nightclubs of the garden suburbs, but it did have Lansky's table crews, and that attracted the best players. It was serious gambling for serious gamblers. The Montmartre was only a few minutes stroll from the Nacional, the grandest hotel in Cuba - or in the entire Caribbean. Lansky had long nursed a plan to install a casino in the Nacional Hotel itself. The hotel stood imposingly on a rocky bluff looking out across the bay towards the Morro, the ancient and picturesque fortress guarding the entrance to Havana harbor. Ten stories high and of classic design, the Nacional bore a striking resemblance to the Breakers Hotel in Palm Beach, whose architect it shared, and Lansky's scheme was to take over a wing of the Nacional and refurbish it with luxury suites for high-stakes players, a deluxe Caribbean version of the formula which Las Vegas had been developing so successfully since the death of Benny Siegel.

    This idea did not accord with the habits of Havana's American colony, who used the rambling gardens and corridors of the Nacional as something of an expatriate club. A few yards along the Malecon, the sea wall, from the U.S. embassy, the Nacional was a cozy and non-commercial setting for tea and bridge parties, tennis tournaments, and gatherings on the Forth of July. But Batista liked Lansky's casino idea, and since the Cuban government owned the Nacional, he seized on the project as a chance to show off his dynamic new tourist policy. In 1955, the Nacional was placed under new management.

    International (later Intercontinental) Hotels, Inc., a subsidiary of Pan Am, the principal air carrier to Havana, took over the management of the hotel and embarked upon an extensive program of refurbishing. They did not designate a particular wing of bedrooms for gamblers, but at the northern end of the long entrance hall, inside the curved loggias looking out over the Malecon, an elaborate and luxurious new complex of public rooms was created - a bar, a restaurant, a showroom, and a casino. This complex was sublet by the hotel for a substantial rent to a casino operator, and that operator was Meyer Lansky. This became home to Wilbur Clark's Casino - Havana.

    Eartha Kitt was the star of the floor show with which the new Nacional Hotel casino opened for business in the winter season of 1955-56. It proved an immediate success. Lansky placed his brother Jake in charge of the casino floor, and night after night Jake surveyed the proceedings from his giant ladder to make sure the games were kept clean. The Lansky brothers were operating in partnership with a regime which was corrupt. But they did not allow that corruption to touch the purity of what made them real money - serious, professional gambling. Their partner, Fulgencio Batista, shared their professionalism. Flamboyant and high profile in many respects, the Cuban president was not, himself, a gambling man. He also realized, as clearly as the Lansky's did, that having Cuban officials gathered around roulette tables in their caps, uniforms and all the trimmings, would not be good for anyone's business. Batista seldom visited Meyer Lansky's casinos - in the winter season of 1955-56 Lansky was operating at both the Nacional and the Montmartre, and had a piece of another, more modest club, the Monseigneur - and the two men were almost never seen together in public. Nor did they socialize privately. Their relationship was strictly business.

    Lansky and Batista were, to all intents and purposes, partners in the commercial development of Cuban gambling, but there was nothing so crass as a direct transfer of funds from one to the other. It made more sense for both sides to operate through middlemen, and though the payoff might sometimes take the form of cash, it more often involved jobs, supply contracts, and a whole network of patronage.

    In 1955, the system reached its culmination in the promulgation of Hotel Law 2074, by which the Cuban government granted tax exemptions to "all new hotels, motels, and similar establishments providing tourist accommodations." Any hotel with more than $1 million of new investment, and any new nightclub valued at $200,000, was entitled to apply for a casino license. The government even announced itself ready, in certain circumstances, to provide "direct financial assistance" for the construction of tourists projects it considered particularly valuable.

    Batista was able to cite this law as the reason why, in a matter of years, the number of hotel rooms in Havana nearly doubled - from some 3,000 in 1952 to nearly 5,500 in 1958. All these new rooms were modern, luxurious, and air conditioned, and Batista was entitled to take credit for his achievement. By 1958 Cuba was experiencing the booming tourist economy that did not come to other corners of the Caribbean for ten years or more. But Hotel Law 2074 was also the channel by which the president could dispense government money to associates like Meyer Lansky, who then made sure that it was friends and relatives of the president who profited privately from the construction and operation of the new hotel-casinos that they built. No customs duties were levied on the gaming tables and equipment that came in to fill the new casinos, and Cuba's strict labor quota laws were relaxed to allow foreign croupiers and casino staff into the country on special two-year visas as "technicians." In the spring of 1956, less than three years after he had been in jail in Saratoga, Meyer Lansky started work, under the terms of Hotel Law 2074, on the construction of his own hotel, The Riviera, a twenty-one-story, 440-room skyscraper, towering above the Malecon in Havana. When it opened, the Riviera would be the largest purpose-built casino-hotel in Cuba - or anywhere in the world, outside Las Vegas.

    By 1956, Havana had attracted many of America's professional gamblers from the wide-open era, including a number who had become prominent in Las Vegas. It was not Meyer's style to exploit his special relationship with Batista, but there was not much point in a casino operator's coming to Havana in the 1950's if Meyer Lansky did not like him. Meyer, Jake, and their friends would gather for sandwiches at lunchtime beside the Nacional's pool, where they all had cabanas. The memories they shared went back more than twenty years. Moe Dalitz, Sam Tucker, and Morris Kleinman, Meyer's partners in the Molaska Corporation, were there. So was their Cleveland partner, Thomas "Black Jack" McGinty, along with Wilbur Clark, who fronted the Desert Inn, not far down the strip from the Flamingo. Dalitz and his partners had bought into the Nacional casino, and they were due to take it over entirely when Meyer's Riviera Hotel got started properly. Benny Binion, the Texas gambler, was one of the few friends of Meyer's who did come over to check out the prospects for business in Havana. He later explained: "I don't like operating anywhere that I don't speak the language." Younger than Meyer and his generation, but respected for the position he had carved out for himself in Cuba, Santo Trafficante,Jr., was admitted to the inner circle.

    Meyer Lansky set his sights high when it came to the construction of his own hotel-casino in Havana. He had had pieces of hotels before - most notably in Benny Seigel's Flamingo. But the Havana Riviera was Meyer's own baby. With his past, it was impossible for Meyer Lansky to hope that he could ever get a Nevada gaming license or operate openly in Las Vegas. But now, just over the horizon from Miami, and in an open, legal setting that was more agreeable in many ways than the dusty and remote Nevada desert, he could build a luxury, resort hotel-casino which showed how it should be done. People in the know declared that Meyer Lansky was the dean of American gambling. The Havana Riviera would prove it.

    To construct the Riviera, Lansky selected Irving Feldman, a builder who had a dozen hotels and prestigious apartment blocks to his credit on Miami Beach. Short, swashbuckling, and dynamic, Feldman was a Napoleonic figure who had the reputation for bringing high-quality jobs in on time. In his previous life, Feldman was an unashamed gambler and ladies' man. But when it came to construction, he was all business. He broke ground on the Riviera in January 1957, and eleven months later it was finished.

    Meyer's brief for his hotel was that it should contain nothing but the best. The Riviera was the first major building in Havana to have central air conditioning, in contrast to the new Capri Hotel, completed a few months earlier not far from the Nacional, which had individual box units, rattling and dripping from every window. Cold hissed smoothly and silently into the Riviera's luxurious room from ceiling vents, and every window had its own view of the sea. Seen from the air, the two broad curves of the Riviera swept back from the Malecon in the shape of a tremendous Y, with cantilevered balconies at every end. In terms of style and decor, the Riviera was angular and futuristic. Echoing and reflecting the waters of the Florida straits, the hotel was clad in turquoise mosaic, while the casino itself, a curved and windowless pleasure dome covered in gold mosaic, nestled on the ground beside it like an enormous, gilded ostrich egg. The furnishings were by Albert Parvin-Dohrman, which was supplying the latest luxury hotels in Las Vegas. Modernistic chandeliers glittered from the ceilings of the casino, restaurant, and public rooms, like so many convoys of winking flying saucers. The overall effect did not, perhaps, win prizes for taste, but it was undeniably exciting.

    Everyone in Havana knew that the Riviera was Meyer Lansky's project. He sent excited progress reports and photographs of the construction back to his son Paul, in Tacoma, as the steel skeleton of the main tower rose in the sky. But, as ever, Meyer hid his own participation behind the names of his partners and associates. The casino license, for which the hotel paid the Cuban government $25,000 a year, was held by Eddie Levinson. The casino manager was an associate of Levinson's, Eddie Torres - and the Riviera Hotel Corporation itself was headed by the Smith brothers, Ben and Harry, two Toronto hoteliers with whom Lansky had negotiated the Management contract. The only place in which Lansky's name appeared on the paperwork was as director of the hotel's kitchens.

    The Riviera Hotel opened with a fanfare on the evening of December 10, 1957. Its Copa Room floor show, which was carried in part on American network television, was headed by Ginger Rogers. The Riviera was universally judged an immense success. Its casino started making money from the first night. Its 440 double rooms were booked solid through the winter and spring season of 1958 and beyond. It took the deployment of several large-denomination bills to secure a decent seat in the Copa Room, where the performers that winter included Vic Damone, Abbott and Costello, and the Mexican comedian Cantinflas. Most satisfying of all, it was even harder to secure a table to eat in the Riviera Room, the hotel's gourmet restaurant, which offered, by general consent, the city's finest fine dining, and steaks of a particularly high quality.

    Havana in the winter of 1957-58 offered the visitor many rare and extravagant experiences. The memories of visitors to the Riviera Hotel in its heyday are of an ambiance that was anything but gangsterish. The gaming in the egg-shaped casino was hushed and reverent, as befitted the seriousness of the stakes. A strict dress code was enforced. Many men wore tuxedos. The women wore serious jewels. The marble halls of Meyer Lansky's Riviera were an asylum of quiet and gentility, compared to the raucous carnival to be found outside.

    As the Lansky/Batista gaming empire gathered influence, it also gathered notoriety. An article appearing in the March 10, 1958 issue of LIFE magazine indicated that East Coast United States mob influence dominated Cuban gaming and that Nevada casinos were supplying the expertise for the operations. The article cited Batista's 1955 regulation changes as bearing fruit in the form of five major casinos, three nightclubs with another three hotels in progress. The article lists five hotels: the Riviera, Hotel Capri, the Nacional Hotel, the older Comodoro and the Sans Souci. A new Havana Hilton was in the progress of opening and two additional hotels were coming on line. The article also cites a casino at the race track for those who tire of the races. Although not specifically mentioned, the nightclubs included the Lefty Clark's Tropicana and Wilbur Clark's Casino. Thirteen different syndicates, almost all of them separate from the gamblers already established in Havana, had applied to sublease the new Hilton Hotel's casino which, it was calculated, should produce about $3 million profit per year. Hilton wanted $1 million annual rental, paid in advance, and Roberto "Chiri" Mendoza was the candidate that the company favored. Mendoza had Batista's personal blessing, and he was also the candidate favored by the Cuban Hotel and Restaurant Workers Union, which was the owner of the new hotel. The union was financing the project as a source of employment for its current workers and as an investment for their pension fund, leasing out the management and international marketing to Hilton.

    There were Americans running the gaming in the Nacional Hotel, the Sans Souci, and in the recently opened Capri Hotel - where George Raft, the movie star, was acting as front man and meeter and greeter for a syndicate headed by Santo Trafficante. Americans had more than their fair share of gambling in Havana, and when it came to the new Hilton casino, Batista had given the word that this one was for the Cubans.

    Havana had something of a fairyland about it in the winter season of January, February, and March, 1958. There were more visitors than ever before. The operators of the newly opened casino-hotels could hardly believe their good fortune. At the Capri, J. "Skip" Shepard, a Miami hotelier who had a twenty year contract to operate the hotel, remembers that the flow of money - sheer, naked profit - was "just unbelievable." Thanks to Meyer Lansky's reputation and connections, it was the Riviera that attracted the most serious, high-stakes players - men who thought nothing of writing a check for $20,000 or $30,000 at the end of an evening's gaming. Who would have thought that by the end of that very same year, the "gambling empire" of Lansky would come crashing down along with the Batista regime.

    Early in December 1958, Fulgencio Batista sent his children's passports to the American embassy to be stamped with U.S. visas. On December 9, President Eisenhower dispatched a personal emissary to Batista promising unhindered access to, and asylum in, the dictator's Daytona Beach home, providing that Batista was willing to leave Cuba rapidly and quietly. Just over a week later, on December 17, 1958, Ambassador Earl E.T. Smith repeated the message more officially. For those who were in the know, there was ample warning that Batista's days of power were numbered. The news reached the central Havana hotels soon after one o'clock in the morning on New Years Eve, 1958. An hour or so earlier, President Batista had driven secretly to Camp Columbia, where he had commandeered three planes at the neighboring air force base, filled them with his wife, family, closest aids, and baggage - and fled the country. Fidel Castro and his followers were still in Oriente Province, nearly 500 miles from the capitol, while the Cuban army, larger than it had ever been, remained generally loyal to Batista. But afraid for his life, and concerned to make sure of his money, the sergeant-stenographer with the engaging smile had chosen to pick up his winnings and to leave the table while he could. In reality, very few in Batista's circle were given any notice of what was happening. Chiri Mendoza rocked perceptibly with shock when he had heard the news - along with everyone else - in the newly opened Hilton casino in the small hours of January 1. Over at the Riviera, they had been no better warned. American consular officers, roused from their beds, struggled with their New Year's Day hangovers as they went round the hotels, telling American citizens to stay indoors, while compiling lists of visitors' names in case an evacuation became necessary. As dawn rose on the suddenly Batista-less Havana, there was dancing in the streets. The workers at the Riviera deserted their jobs to go out and celebrate. In the early weeks of January 1959, peasants who had only dared to look wistfully at the outside of the chrome-and-glass towers housing the visiting Americanos now strolled with impunity into the lobbies. It was several days before life in Havana returned to some sort of normality.

    One of the first decisions of the new revolutionary government of Cuba in January 1959 was to shut down the casinos and the national lottery. Both were inappropriate to the ethics of the new, reformed Cuba. If the country's tourist business depended on gambling, announced the new prime minister, Miro Cardona, then the tourist business would just have to suffer. Fidel Castro had already proclaimed from the mountains his intention of removing the Yankee gangsters who ran the casinos of Havana. The realities of government, however, soon caused Castro and his ministers to think again. At the end of January 1959, several thousand waiters, croupiers, dealers, and bartenders who had been thrown out of work by the closing of the casinos paraded in protest through the streets of Havana. Castro had delegated the responsibility for the casinos and the national lottery to Pastora Nunez, one of the woman guerrillas who had fought in the Sierra Maestra, and at the end of February 1959, Señorita Nunez summoned the major casino owners to her office. "I highly disapprove of the way you make a living," she lectured, "but we are reconsidering our earlier decision."

    Money proved to be the final persuader. The casino owners agreed to give their employees seven weeks' back pay for the time they had been out of work, and with that assurance, the government rescinded its earlier decree. CASINOS REOPEN IN HAVANA, proclaimed the banner trailing behind a plane which flew up and down Miami Beach in the last week of February 1959. There were about six weeks left until Easter, and, with luck, the Riviera and the other hotels could recoup enough of their losses to break even for the season. Cautious optimism filled the gaming rooms at the prospect of coexistence with a regime that seemed both clean and pragmatic.

    In April 1958, nine months before Batista's departure, when the recently opened hotels-casinos of Havana were going full swing, the Nevada Gaming Board had banned the holders of Nevada gaming licenses from operating in Cuba. The spectacular success of the Havana Riviera, Capri, Nacional, and Hilton hotel-casinos was hurting business in Las Vegas, where the most recently opened hotels were all in financial difficulties.

    Five Nevada gamblers had acted immediately to safeguard their positions in Las Vegas. In the autumn of 1958, Moe Dalitz, Wilbur Clark, Sam Tucker, Morris Kleinman, and Thomas "Black Jack" McGinty all sold out the interests they had developed in Havana. Cuban gaming now rested solely in the hands of Batista, Lansky, and his associates from the east coast. Nevada's contribution to Cuban gaming had been to supply the "know-how" of the operations for Lansky's dreamed of "Las Vegas" style casinos. On New Year's Day 1959, they looked very clever indeed. They got themselves clear of Cuban gambling, and they even had a profit to show for it. Lansky did not look so clever. The Riviera Hotel had cost $14 million to build and equip. Six million dollars of that investment was provided by the Batista government under the provisions of Hotel Law 2074. No paperwork survives to provide exact figures, but $8 million to $12 million seems to be a fair estimate of what Lansky and his associates personally invested in the Riviera's bricks and mortar, chandeliers, roulette tables, and mosaic tile. At the time of Batista's departure, the Riviera Hotel had been open for a few weeks longer than a year, and by the estimate of the Hilton's analysis, who studied the Riviera's success in order to predict how much revenue their own casino might be expected to generate, gaming at the Riviera showed a clear annual profit of some $3 million. But after little more than a year of operating profits, that still left $5 million to $9 million of investment paid out and buried in the hotel - with the deficit getting larger, since the Riviera did not register a single month of clear profit in the period that it operated under the unwilling and unhelpful regime of Fidel Castro.

    On October 24, 1960, the Gaceta Oficial de la Republica de Cuba announced the confiscation and nationalization of the Havana Riviera Hotel. The gazette announced the same fate for 165 other American enterprises. This marked the end of Lansky's dream of Las Vegas style gaming in Cuba. Gaming in Cuba was growing so fast, that if it weren't for the revolution, Las Vegas might not be what it is today. Reports of gaming in Cuba after the confiscation of all the American operated casinos, consist of casinos operated for the pleasure of eastern block tourists.

    A recently reported joint venture with French gaming interests in partnership with the Cuban government as recently as 1991 indicate that the operations have labored under the difficult problem of having the government as a partner. The glorious days of Havana gaming are now more than 40 years old, but the urge for gambling, long a sport in Cuba, continues to run in the blood of the country. The Cuban National Lottery was such a deeply rooted institution that even Fidel Castro could not ban its existence and today it serves as an indication that Cuba will once again revive the spirit of gaming if and when its government is so inclined.

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The Batista-Lansky Alliance
How the mafia and a Cuban dictator built Havana's casinos
By Matthew Reiss

It was December 31, 1958. Cuban dictator Fulgencio Batista raised a New Year's Eve toast to his cabinet members and senior military officers and wished them hasta la vista. After seven years of building Havana's tourism industry by inviting gangsters such as Meyer Lansky to construct casinos, helping to fund their enterprises and taking a large chunk of the proceeds for himself, Batista knew his presidency was over. His plundering had weakened Cuba's treasury and demoralized the army. He filled three cargo planes with all he could carry and was on his way to the Dominican Republic before the sun came up on 1959.

Nine days later, Fidel Castro's guerrillas took the capital and installed what would become the longest-lasting communist government in the Western Hemisphere. But while Castro could close the casinos, arrest the gangsters and deport or imprison Batista's henchmen, he could not bury the skyscrapers that had drained the wealth of the island. Castro inherited from Batista a Havana of overt poverty and ostentatious wealth, where the haves of the world's richest nations had come to exploit the have-nots; where statues of Lenin and Marx would be dwarfed by glass and stone monuments to the Mob; where the nation's architectural landmarks would be a constant reminder of the days when criminals were in charge and the Mafia roamed free.

But until that last day of 1958, the only revolution that mattered to Mafia financier Lansky involved a roulette wheel. During the Batista years, Cuba was a place where a crooked man could make an honest living. After a half century on the wrong side of the law in the United States, the celebrated gangster was legit. America's high rollers and celebrities were living large in the casino of Lansky's luxury hotel, the Riviera, and the drinks were on the house.

As a kid in Manhattan's Lower East Side ghetto in the early part of the century, Meyer Lansky learned how to cheat, bribe and split fees with other cheats. He ran into Charlie ?Lucky? Luciano, as legend has it, in a street fight, and Lansky's tenacity convinced the Sicilian Luciano that this Jewish kid had possibilities. Together with another local Italian, Frank Costello, and a young tough named Benny "Bugsy" Siegel, they created a powerful network of numbers runners and bookies throughout the city. With Luciano at the helm and Lansky at the register, the combination soon expanded nationwide.

When Prohibition took effect in 1919, Lansky's and Luciano's gambling alliances helped provide contacts with illicit liquor distributors across the country. The pair soon controlled a healthy share of the import and transportation of bootleg liquor.

After 14 years of windfall profits, many bootleggers were put out of business by the market forces of competition when Prohibition was repealed in 1933. Lansky's financial success had already made him a target of law enforcement. When New York started getting too hot, Lansky looked for other places to take his gambling operations.

 

In the mid-1930s, a Cuban army sergeant named Fulgencio Batista took advantage of political chaos in the former Spanish colony and formed his own government. At the time, the island republic was foundering, as was its gambling industry. Years before, Havana's nightlife had attracted wealthy entertainers from the United States, such as Sarah Bernhardt and Enrico Caruso. But Cuba's gaming industry had become mired in cheating and corruption by the 1930s. So, in 1939, Batista recruited a New England racetrack owner named Lou Smith to revive Havana's Oriental Park track and Meyer Lansky to clean up the casinos.

Soon, gamblers who were familiar with the professionalism of Lansky's stateside operations were eagerly making the flight to Havana, where they could be separated from their earnings in style. Within months, Cuba was back on the map as a gambling destination. Lansky's success did not escape Batista. The pair developed a close relationship, which is best chronicled in Robert Lacey's biography of Lansky, Little Man.

The resurgence of gambling and the return of rich tourists helped foster a wave of confidence in the island's economy. Batista scheduled an election in 1940 and won handily, only to have his hand-picked candidate defeated in 1944 by Dr. Ramón Grau San Martín of the opposition Autentico party. Under Grau, gambling was frowned upon. Lansky returned to the States to take care of his other investments. (He did, though, attend a Mafia summit in Havana in 1946 when the leaders decided Bugsy Siegel's very brief future.) Grau was followed by Autentico's Dr. Carlos Prío Socarrós in 1948. Both Grau's and Prío's terms were tainted by corruption.

Two months before the 1952 presidential elections, Batista snatched control of the government that he had relinquished, and quickly put gambling back on track. Once again, the dictator contacted Lansky, but this time he gave him an annual salary of $25,000 to serve as an unofficial gambling minister.

The high rollers followed Lansky to his new project, the Montmartre Club. While the casino was a hit, every night Lansky's customers would cash in their chips and hustle off to catch the floor show in the outdoor gardens of the Tropicana or at the Capri's Red Room nightclub, which was controlled by Tampa-based Mob boss Santo Trafficante Jr. Both nightclubs offered larger, more comfortable settings. To compete, Lansky persuaded Batista to give him a piece of Cuba's national treasure, the Hotel Nacional, built in the 1930s. The Nacional was where the cream of Cuban society went to wet their whistles. Under Lansky's impetus, a wing of the Nacional's grand entrance hall was refurbished to include a bar, a restaurant, a showroom and a casino. Lansky put his brother, Jake, in charge of the room, which by the spring of 1957 was bringing in as much cash as the biggest casinos in Las Vegas.

In 1955, the Batista government passed a law granting a gaming license to anyone who invested $1 million in a hotel or $200,000 in a new nightclub. And that meant anyone. Unlike the procedure for acquiring gaming licenses in Vegas, this provision exempted venture capitalists from background checks. As long as they made the required investment, they were provided with public matching funds for construction, a 10-year tax exemption and duty-free importation of equipment and furnishings. Although Batista's ostensible aim was to create new jobs, he gutted the labor laws to allow casino owners to bring their American croupiers.

Under the Batista-Lansky administration, Havana was ripe for foreign investment, especially for the glut of illegal earnings that Lansky and his cronies had accumulated from bootlegging, numbers and other rackets. The FBI was developing new ways of tracking down dirty money; to gangsters with loads of tainted cash, Havana looked like a stable offshore depository. The climate was so attractive that Lansky decided to build his own hotel, the Riviera, on the Malecón, Havana's wide boulevard along the seawall. In 1957 it rose over the horizon like a beacon, advertising the city as a refuge from the law.

"In the '50s there was this byzantine atmosphere," recalls Cuban émigré Arturo Quintana. "Every connection, every kind of deal. Everybody was so sure about everything." Quintana recalls meeting Lansky during that time. "You wouldn't imagine he was any kind of gangster," he says. "On the contrary, he looked more like a professor. Short, with glasses. Smiling."

In that lawless atmosphere, Lansky became a respected businessman -- and not without reason. He rid the casinos of cardsharps and cheats, offering legit games to attract the high rollers. His hotel had the best food on the island and it was the only one with central air conditioning. The Riviera and neighboring hotels "played a role in the '50s and later on by concentrating a lot of life in certain spots in the city," says Havana architect Mario Cuyola. "With the people going in and out, it radiated to the surrounding areas, making the city more livable."

Havana became the destination of choice for thousands of Americans, the famous and tourists alike. Tony Bennet sang at the San Souci; Ginger Rogers opened the Copa; Nat King Cole played the Tropicana. Frank Sinatra and John Wayne were regulars at the Hotel Nacional.

During the same period, however, the people of Cuba suffered. Government corruption was endemic, while in Havana's streets prostitution and poverty were rampant. In the countryside, the peasants were suffering as well; Batista poured the nation's wealth into the capital. He gave the gangsters millions in government funds for hotel construction and spent millions more reclaiming valuable waterfront real estate from the sea. Construction of Lansky's Riviera went for about $18 million, while the Hotel Continental cost $20 million. The $14 million Capri, which housed Trafficante's Red Room nightclub, was the only hotel that did not receive any money from the government.

But Batista's plan for building a Monte Carlo in the Caribbean was not complete until the Hilton Hotel's logo was hoisted above the coast. Conrad Hilton had stayed away from the island for years, concerned about possible run-ins with Cuba's powerful unions. Under Batista, however, even this risk seemed manageable, as the $23 million cost of constructing 650 rooms of luxury accommodations was financed by the pension funds of the Cuban restaurant workers' union. Finally, the chain agreed to operate Cuba's biggest hotel. A lot of cigars were lit in celebration of the economic fortunes of those who were lucky enough to have a piece of the Cuban capital.

 

As Batista's regime grew more decadent, Cuba became increasingly divided. A young Fidel Castro took advantage of the growing gap between rich and poor to advance his own agenda. On July 26, 1953, he and a small band of guerrillas attacked the Moncada and Bayamo military barracks in Oriente Province, at the eastern end of the island, giving a name to Castro's revolutionary July 26 Movement. Batista captured and tried him, but it gave Castro the opportunity to register an impassioned sound bite to the world. "Sentence me," he declared. "No matter. History will absolve me."

Ordered to prison for 15 years, Fidel served less than two. Batista ran a rigged election in 1954 in an attempt to legitimize his government, and six months later he granted amnesty to political prisoners. Castro took advantage of his freedom by founding a guerrilla training camp 20 miles outside of Mexico City. In late 1956, he embarked with an expeditionary force of 81 men in an ill-equipped boat, the Granma, that he had acquired in Mexico. They sailed to Cuba and landed at Los Colorados beach, on the southwestern coast of Oriente Province. Castro's forces were attacked by the Cuban military, but he and 20 men survived by escaping into the wooded mountains of the Sierra Maestra.

Batista dismissed the action as a local problem without major significance and went back to his game of canasta, according to Cuban author Nestor Carbonell. Havana's prosperity appeared to have lulled Batista to sleep. Despite a growing gap between the urban rich and the rural poor, per capita income in Cuba by 1958 was higher than Japan's, nearly equal to Italy's and third highest in Latin America. Batista's own fortune was estimated to be as high as $300 million.

The July 26 Movement regularly conducted strikes against Cuban military and economic targets, and New York Times correspondent Herb Matthews, who traveled with Castro in the Sierra Maestra, romanticized the rebel's war. Soon Castro gained support in the States. In March 1958, amid rising pro-Castro propaganda, the U.S. government ordered an embargo on arms to Batista.

The writing on the wall did not escape the dictator. In an act of desperation, he sent one of his most feared officers after Castro with a force of 500 men. But even this effort backfired. Many troops pulled up lame with self-inflicted injuries. Others sold the rebels their guns. Castro captured the army's communications trailer and opened a number of fronts that went unchallenged.

President Dwight Eisenhower relayed a message to Batista that he was welcome to return to his Daytona Beach, Florida, estate.

On that New Year's Eve of 1958, while Batista was preparing to flee to the Dominican Republic and then on to Florida (where he died in exile in 1973), Meyer Lansky was celebrating the $3 million he made in the first year of operations at his 440-room, $18 million palace. At that time, Lansky "was very mellow," recalls Quintana. He could see no reason to be alarmed. "Intelligence was very deficient in those days," says Quintana, who is now an attorney on Long Island in New York. "And everyone underestimated Castro. The only one who believed in him was Fidel himself. People believed in mathematics; in logistical and military power. No one could dream of the development of a revolution."

In a pirate radio broadcast from the mountains, Castro stated that he preferred executing gangsters to deporting them. Now his bearded battalions were less than 500 miles away, marching to Havana. Ché Guevara would be in charge of public safety by the end of the week.

In a lifetime that spanned Prohibition, the Depression, the Second World War and the nuclear age, Meyer Lansky evolved from a Lower East Side schtarker (strong arm) to the business partner of a head of state. In that time, he had become a symbol of everything that Castro's revolution sought to overturn. On January 8, 1959, Castro marched into Havana and took over, setting up shop in the Hilton. Lansky had fled the day before.

When Castro nationalized the island's hotel-casinos in October 1960 and outlawed gambling, Lansky lost an estimated $7 million. After a lifetime of careful bets, this founding member of organized crime retired a loser. He settled in Miami Beach, where he died in 1983.

"When Castro came to power," says Wayne Smith, the former chief of the U.S. interests section in Havana, "the image of Havana was as the center of graft, corruption, vice and the Mafia. All the money in the country was siphoned off by Havana." After he took control, Castro announced that resources would be shifted to benefit those who had produced the wealth. Since that time, says Smith, "Havana has become quite run-down." Since 1959, the Castro government has concentrated its efforts on building rural schools and clinics.

For decades, the revolutionary government shunned tourism, Smith says. "To them, tourism was identified with the past, the Mafia, with Americans coming down and pissing on the statues of their heroes." Although Cuba's economic difficulties have again opened the country to foreign tourists, gambling and casinos remain illegal. Says Smith, "They're very careful not to let the Mafia back in."

 

Matthew Reiss is a freelance writer.

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