They Come From Everywhere to Study Us

In the 1990s, I met a Russian criminal-businessman who was snapping up swathes of real estate around Moscow. He was paying bargain-basement prices thanks to bribes, intimidation and insider connections. With great satisfaction, he described the nation’s post-communist privatization programs as “like Vegas—and we’re the house.”

Russian organized crime has been one of the depressing success stories of the modern world. When the Soviet Union fell apart, it unleashed this new breed of gangster, combining a toughness learned in the Gulag labor camps with a street-smart entrepreneurialism that made them unparalleled criminal deal-makers. They laundered money for the Italians, traded Afghan heroin for Colombian cocaine, trafficked women into Europe and guns into Africa. In the United States, they established beachheads in immigrant hubs such as New York’s Brighton Beach and have moved into all kinds of underworld activities, from multimillion-dollar Medicare frauds to human smuggling.

But beyond dropping wads of their dirty cash in the casinos and bars, where are they in Las Vegas? I have been studying the Russian mob for some 20 years now, as an academic, consultant to various law-enforcement agencies and adviser to the British Foreign Office. I’ve listened to intercepted cellphone calls and cautiously drank with gangsters in Moscow. When I agreed to come to the Mob Museum in Las Vegas to speak about the Russians, I decided to look at what they were doing in the city. Trawling through my files and talking to contacts on both sides of the legal divide, the unexpected truth was that the answer was: very little. We’ve seen Bulgarian gangs defrauding car dealers, Armenians skimming ATMs, but very little Russian activity.

Why? Answering this question tells us something interesting about the Russian gangsters.

First of all, for all their reputation for casual violence, they know that turf wars are bad for business. They would much rather take over vacant territory or business sectors where they can, and cut deals where they can’t. In Las Vegas, the Russians aren’t battling for supremacy but trying to make money working with other criminals. So, they help smuggle in girls and drugs, launder dirty money and generally make themselves useful.

Secondly, they learn fast. In 2009, Russia banned gaming throughout the country, outside of four specific territories. The result has been an upsurge both in underground casinos and gaming tourism, as the Russian nouveau riche head everywhere from Macao to Bolivia. However, the big money will be made in the new generation of casinos being built in places such as Russia’s far eastern port city of Vladivostok and the impoverished garrison district of Kaliningrad in northern Europe.

Moscow says it will closely regulate who gets licenses to build these casinos and how they are run, but the government is riddled with corruption. Russian organized crime is viewing these new developments as potential gold mines.

So the Russian gangsters are coming to Las Vegas. Not to take over, but to learn. Maybe to pick up some partners, some investors. Today’s underworld is a global business, where money and experience gets traded from gang to gang. Las Vegas’ high-rolling and freewheeling past may yet become Russia’s future. And thanks to Russia’s mobsters and their dirty money, Las Vegas is going to be acquiring new global competitors very soon.