Celebrities
Howard Hughes' Bizarre Takeover of the Desert Inn and Vegas
In 1966, Howard Hughes arrived in Las Vegas with one directive: buy the Desert Inn. Two months later, he bought it. Six months later, he bought the Sands, the Frontier, and the Castaways. By 1968, he owned a quarter of the Strip.
By Kwame Mensah3 min read
A man in the Desert Inn penthouse looked out the window. He saw the Strip. He decided to own it. He didn't do this over years. He did it in eighteen months.
Howard Hughes, the industrialist, arrived in Las Vegas in 1966. He was eccentric, reclusive, and extraordinarily wealthy. He had made his fortune in aviation and film. He'd never run a casino.
But he decided to.
The First Purchase
Hughes checked into the Beverly Hills Hotel in Los Angeles. He was supposed to stay for four days. Complications in his stay (an incident with local authorities, depending on the account) made him decide to leave Los Angeles.
He flew to Las Vegas instead. He stayed at the Desert Inn. Then he never left.
The Desert Inn's management asked Hughes to leave (his stay was becoming long). Hughes responded by offering to buy the casino. The owner, Moe Dalitz, agreed to sell for 13 million dollars.
Hughes paid in cash. The sale closed in January 1967.
The Expansion
Once Hughes owned the Desert Inn, he wanted to control more. He bought:
- The Sands (1967) for 14.6 million dollars
- The Frontier (1967) for 13.2 million dollars
- The Castaways (1967) for 5.3 million dollars
- The Landmark (1968) for 5.6 million dollars (and an additional 6 million later)
By 1968, Hughes owned four major casinos on the Las Vegas Strip. His investment: approximately 60 million dollars.
For context, 60 million dollars in 1968 is equivalent to 500 million dollars in 2020 dollars. He was making one of the largest real estate acquisitions in Nevada history.
What He Changed
Hughes was an outsider. He didn't run his casinos like traditional operators. He spent little time on the floor. He managed through intermediaries.
He modernized the properties. He invested in technology (closed-circuit television, computer systems). He upgraded amenities. The Desert Inn, which had been a mid-tier property, became a luxury destination.
He also changed the culture. Traditional Vegas was run by organized crime figures (Moe Dalitz, for example, had ties to organized crime). Hughes was a legitimate businessman. His entry marked a shift toward legitimate corporate ownership.
The Decline
Hughes's influence over his casinos weakened over the late 1960s and 1970s. He became increasingly reclusive. He delegated more to managers. His health deteriorated.
By the late 1970s, he was selling off properties. The Landmark went to new owners. The Frontier changed hands. Eventually, Hughes divested from Vegas almost entirely.
His legacy: he proved that a legitimate businessman could own and operate major casinos. Before Hughes, Vegas was underworld territory. After Hughes, it became possible for corporations to own casinos.
What It Tells Us
Howard Hughes entered Las Vegas as an outsider with money and vision. He changed the industry by introducing corporate discipline and investment.
But he also showed the limitations of outsider ownership. Hughes didn't understand gambling. He didn't understand the margins. He didn't understand the operational complexity of casino management.
He left Vegas poorer in wealth but richer in legend. The story of the billionaire who decided to own Vegas and almost succeeded remains one of the great American tales of eccentric ambition.