
In 1983, Sam “Ace” Rothstein (De Niro) exits a restaurant and gets into his car, which explodes when he turns it on. Sam then narrates the story, and flashes back to the beginning.
Going back ten years, Sam, then a sports handicapper for the mob, is entrusted by Chicago Outfit bosses to run the Tangiers Casino, which is under their control through corrupt representatives of the Teamsters. Sam is at first reluctant to manage the Tangiers due to his criminal record, but is able to do so through lax gaming laws which simply require employees to make an application for a casino license; and can work at the casino while awaiting a license hearing, which often take years due to a large backlog. Sam’s expertise enables him to quickly double the casino’s profits, which are skimmed by the mafia before the records are reported to income tax agencies. Impressed with Sam’s work, the bosses send Sam’s friend, enforcer Nicholas “Nicky” Santoro (Pesci), to protect Sam and the whole business. Nicky, however, begins to become more of a liability than an asset, as his brash attitude quickly gets him banned from every casino, and his name is placed in the black book. Nicky then gathers his own crew and begins his own businesses, such as a restaurant and a jewelry store, but also engages in burglary, which is not sanctioned by the bosses.
Sam, meanwhile, meets and falls in love with a hustler, Ginger McKenna (Stone). Despite Ginger’s reluctance, they soon conceive a daughter, Amy, and marry. But their relationship slowly begins to fall apart when Ginger is caught by Sam and Nicky aiding her former boyfriend, a con man named Lester Diamond (James Woods). Sam also makes an enemy in Clark County Commissioner Pat Webb (L. Q. Jones) by firing his brother-in-law Donald Ward (Joe Bob Briggs) from the casino for his incompetence and resisting pressure from Webb to reinstate him. Webb retaliates by pulling Sam’s casino license application from the backlog, forcing Sam to have a license hearing, but secretly arranges for the gaming board and State Senator Harrison Roberts of the State of Nevada (Dick Smothers) to reject the license. Sam responds by appearing on television and openly accuses the city government of corruption. The bosses, unappreciative of Sam’s publicity, ask him to return home, but he stubbornly blames Nicky’s reckless lawbreaking for his mess. Nicky chastises Sam to never “go over his head” in a heated argument in the desert.
The bosses soon notice that the suitcases of money from the skim have decreasing amounts of money, meaning that the money counters have begun skimming some for themselves. They put Artie Piscano in charge of overseeing the skims, but he complains about the expensive costs. Despite the bosses warning Piscano not to keep financial records, he secretly starts writing down how much he spends in a ledger. Piscano’s rants about the extra work and the costs are overheard by the FBI, who bugged his grocery store. Sam finally reaches the end of his patience with Ginger after she and Lester are in Los Angeles with plans to run away to Europe with his daughter Amy. Sam talks Ginger into bringing Amy back, but her addictions anger Sam so much that he kicks her out of the house. She returns, on the condition that she carry a beeper on her for Sam to contact her whenever he must. Ginger turns to Nicky for help in getting her share of her and Sam’s money from the bank, and they begin a sexual affair, which according to mob rules, could get the three of them killed (as well as Nicky’s crew for covering it up). Sam reaches his limit with Ginger when she ties Amy to her bedposts to have a night with Nicky. Sam confronts Ginger in the restaurant and disowns her. She turns to Nicky, but he has lost patience with her as well. The next morning, Ginger goes to Sam’s house, creates a domestic disturbance, and takes the key to their bank deposit box. She takes some of the savings, but is then arrested by FBI agents.
With Ginger’s arrest and the FBI’s discovery of Piscano’s records, which are then matched with the skimming operation, the casino empire crumbles and the bosses are arrested. During a meeting, they decide to eliminate anyone involved in order to keep them from testifying. The slain include Andy Stone, the head of the Teamsters Pension Fund; John Nance, the money courier; and three casino executives. Ginger, who runs away from Sam to Los Angeles, sinks deeper into drug and alcohol addiction and dies penniless of a drug overdose.
Nicky and his brother, Dominick, arrange a clandestine meeting in a cornfield, but are suddenly turned on and severely beaten with baseball bats by their own crew. Nicky is held down while Dominick is beaten unconscious, then he is next. The brothers are stripped and buried in a freshly-dug grave while still breathing. Sam narrates that the bosses ordered the hit on account of being fed up with Nicky’s hotheadedness and disregard for order, and apparently granted Nicky’s crew clemency in exchange for it.
Returning to the film’s opening scene, Sam survives the car bomb, but knows that the bosses were not responsible for it. With the mob now out of power, the old casinos are purchased by big corporations and demolished to make way for much gaudier gambling attractions financed by junk bonds. Sam laments that this new “family friendly” Las Vegas lacks the same kind of catering to the players than the older and to his perception classier Vegas he saw when he ran the Tangiers. In the final scene, an older Sam is shown living once again as a sports handicapper for the mob, or in his words, “right back where [I] started”.
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