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The Kefauver Committee in Las Vegas

By Launce Rake

The Las Vegas hearing of the Kefauver Committee, on November 15, 1950, was not among the most gripping of the 27 investigative hearings held in 14 cities. It lacked the drama of Frank Costello’s testimony in New York and the entertainment value of Virginia Hill’s ribald repartee.

But the Las Vegas hearing was very educational in explaining the Mob’s role in the “race wire.”

Before cable television, satellites and cell phones, transmitting information to gamblers on horse and dog races, prizefight results and other sports action was handled by the race wire. For a time before his murder in 1947, Benjamin “Bugsy” Siegel controlled the race wire in California, Arizona and Nevada. Siegel is best known for building the Flamingo Hotel, but he also generated healthy profits from the race book at the Golden Nugget and other casinos in Las Vegas.

Siegel’s control of the race wire also can be added to the possible reasons why someone wanted him dead.

All of this came out three years after Siegel’s bloody demise in his girlfriend Virginia Hill’s Beverly Hills house. The man who fingered Siegel was William J. Moore, a hotel manager and member of the Nevada Tax Commission, the state agency that regulated casinos in Las Vegas at the time. Moore revealed Siegel’s role with the race wire in front of the famous Kefauver Committee.

Senator Estes Kefauver and other senators investigated organized crime in a series of high-profile and closely watched hearings across the United State in 1950-51. On November 15, 1950, the committee met in the federal courthouse in Las Vegas — the building The Mob Museum occupies today.

The basic issue: To get the sports results wired into your casino, you had to send some of your money to the Mob. Some of the casinos didn’t want to part with their profits. One casino, the Santa Anita Club, put a microphone in a competitor’s casino, the Frontier Club, to listen to the racing results without paying.

Rudolph Hally, the Kefauver Committee’s lawyer, led the questioning of witnesses, and started with Moore. Two years earlier, the Nevada Legislature had significantly beefed up the Tax Commission’s authority over Las Vegas casinos.

“Would you say that it became known that in return for giving people race wire service, Siegel would demand an interest in the proceeds of such service?” Hally asked.

Moore affirmed.

“In other words, he seemed to have the say-so on who would get the wire service, is that right so far? … And those who got it would have to allow him to participate in the profits of their racing book? So the people who were not getting such service were bitterly opposed to Siegel, is that right?”

“Yes,” Moore told the committee.

Moore, executive vice president of the New Frontier, told the committee that for a while, it looked like the feud between the casinos and those who controlled the race wire would turn into a brawl that would be embarrassing for Las Vegas and everyone. He warned that the fight over the wire was “building up to a pitched battle, frankly.”

It was at the height of the race wire dispute that Siegel was shot to death. The murder remains an open case today with a number of theories circulating as to who killed him and why.

Changes in state gambling laws signed by Governor Vail Pittman in 1949 said that every licensed casino had to have access, for a charge, to the race wire. No longer would mobsters decide who got it and who didn’t.

Another person who was questioned about the race wire was Moe Sedway, a onetime friend of Siegel’s and one of three men who took over the Flamingo on the night Siegel died. Senator Charles Tobey of New Hampshire had no great affection for Sedway, who was already known to be associated with the Mob, including Mob boss Charlie “Lucky” Luciano, who had been exiled to Italy five years before the committee hearing.

“We have a country we love, all of us, and you and I are a part of it…” Tobey said. “You are in cahoots with a lot of people like Bugsy Siegel and you wonder whether it pays or not or what it amounts to, and why men do these things. I look upon these people in my state of New Hampshire that till the soil and make $2,000 a year as a lot richer than these people down here. They have got peace of mind and can look everybody in the eye. … You say you knew Lucky Luciano? He is a moral pervert and the scum of the earth, Lucky Luciano, and he is playing the game over there still in Italy. When decent men want to make a living, these men peel it off. They are rich [but] they are poor. They may have money but that is all they have.”

Sedway didn’t disagree. The work of the Mob, he suggested, wasn’t all wine and roses.

“Senator, you see what it got for me, three coronaries and ulcers,” he said. “We don’t get as rich as you think we do. This is hard work. I work pretty hard in this business. …”

But not too hard.

“I stay in bed 15 or 16 hours a day,” he told the committee while explaining that he was just in charge of the dining room at the hotel.

Nobody seemed to take Sedway’s claim very seriously.

Launce Rake is the content development specialist at The Mob Museum.