In honor of my recent trip I thought I would write about one of the more unusual moments in Las Vegas, NV history – the short period from 1966 to 1970 when Howard Hughes became Las Vegas. Hughes prior to his 1966 interest in Las Vegas had developed a reputation as something of an eccentric billionaire, with a penchant for investing in strange projects and cutting edge ideas. Hughes had made his fortune in the tool and die business, aircraft, and movies as well as investing in efforts to promote medical research. But by the 1960s Hughes had gone from being often in the public eye to being a near total recluse.
His concerns about germs and degenerating mental state combined to push him towards trusting a small cadre of advisers to run his business empire. (The car above was fitted with an airline grade air filtration system to protect against germs.) Hughes though also had a pathological hatred of taxes, income tax, corporate income tax, sales tax, it didn’t matter, Hughes hated them all. He had gotten into a lifestyle of shifting between hotel suites, in part to keep away from the press and also to avoid any state being able to claim him as a resident and demand taxes from him. This trend in 1966 led him to Las Vegas, for a ten day stay at the Desert Inn near New Years Eve.
When the ten day reservation was up, Hughes simply refused to leave, the hotel casino owners planned to force him to depart but Hughes aid pushed to get them to leave him be. Eventually when things became too difficult for the hotel owners Hughes negotiated to simply buy the hotel, turning the Desert Inn into the new center of his business empire. Hughes kept the top floor for himself and the floor below that for his business operations. Hughes also went on a buying binge in Las Vegas, purchasing a total of four additional casinos and a local television station. In doing so Hughes also indirectly ended the era of mob-rule in Las Vegas and gave the city a needed infusion of capital which helped push it through an economic rough patch in the late-1960s and early-1970s, due to its rising Mob image and regular federal investigations into Las Vegas operations.
Hughes didn’t build anything, or remodel his holdings, with one exception, the purchase, conversion, and operation of the Landmark hotel and casino, an odd mushroom hotel built on the strip. It never made much money and eventually closed after Hughes fled Las Vegas. Now there are many stories about why Hughes got into Las Vegas as an investment, but the reason I find most compelling based on Hughes long-standing personality is the report it was, again, for tax evasion purposes.
Hughes had recently sold Transworld Airlines in 1966 for around $540 million – a sale taxed at a higher rate by the IRS because it was considered “passive income” rather than “active income.” When Hughes learned that the gross proceeds from casinos however were taxed as “active income” he become very enthusiastic about suddenly owning and operating casinos. Hughes also made a point of buying large amounts of undeveloped land in Las Vegas, land his corporate holdings contained after his death in 1976.
Hughes himself fled Las Vegas in 1970 to move on to new projects, having been a player in state politics in Nevada but finding the changing landscape of the city, and the politics of the state, no longer to his liking. Rumor says that his suite in the Desert Inn was only opened for cleaning after he departed the city – it had remained closed to outsiders for four years. (Just one sample of the weirdness, many reported finding sealed containers of Hughes waste products stored throughout the suite.)
This story has an additional, odd cultural legacy, the James Bond film Diamonds are Forever. In this 1971 film Sean Connery ends up investigating a diamond smuggling ring that operates through Las Vegas, where he infiltrates a casino owned by a mysterious and reclusive billionaire named Willard Whyte. Later it turns out that Whyte is being impersonated by an evil Bond super-villain and Whyte’s corporate empire is being used for evil. (An empire which includes heavy tech research, airplanes, and resource extraction.) Oddly the film chose not to depict Whyte/Hughes in his classic attire of nakedness covering his genitals with only a napkin, which would have made the movie even more interesting I think personally.