The men hoping to make a killing out of the mafia

The Mayor of Las Vegas is at war with one of the city's hotels over who has the better exhibition of mob memorabilia

In the reception area, under a glass screen, you can see a collection of bow ties which belonged to Meyer Lansky, the legendary underworld figure known as "the Mob's accountant". On a flickering screen next door, they're showing home movies shot by Tony "The Ant" Spilotro, a feared Mafia enforcer who liked to tie his victims to a chair and torture them with an icepick.

When Spilotro, played by Joe Pesci in the film Casino, wasn't busy killing people, he was quite the family man. You can see vintage footage of him dressed as Santa Claus, handing out presents at Christmas, and posing with his children alongside Donald Duck at Disneyland. Like all good Catholic boys, Tony appears to have been very kind to his mother.

The intimate and somewhat bizarre artefacts are among 1,000 items of personal memorabilia belonging to a generation of the most famous gangsters in America's 20th-century history. They are under lock and key in a heavily guarded warehouse, on a discreet side-street a mile from the Las Vegas Strip.

Inside, a team of curators and designers is busy assembling them into what they hope will soon become Sin City's next big draw: an interactive, museum-style exhibition called "The Las Vegas Mob Experience", trying to turn the public's enduring fascination with the murky world of organised crime into hard tourist dollars.

The attraction is scheduled to open at the Tropicana Hotel this year. Its creator, a legitimate East Coast businessman called Jay Bloom, says he hopes it will fuse education and entertainment, using state of the art, theme-park-style technology to create Mafia-themed fun and games for the masses. One multi-media exhibit of which he's particularly proud will be called "Final Fate", he says. Visitors will be taken on a fictional, interactive journey which – depending on decisions they take along the way – will end up with them getting either "made" [a slang term for being accepted into the Mafia] or "whacked".

Bloom says: "We've bought the estates of a string of major named mobsters, people everybody would recognise, and assembled an important collection. There's huge public interest in this subject. How many mob movies are there? How many TV shows like The Sopranos? It's part of our history, yet we'll be the first people to chronicle it in this way."

And Bloom certainly won't be the last. A few miles down the road, the Mayor of Las Vegas, Oscar Goodman, is busy creating a rival, publicly owned museum dedicated to the city's time-honoured links to the Mafia, who grew rich in the post-war years "skimming" a cut from the profits of its enormous casinos. It will be called the Las Vegas Museum of Organised Crime and Law Enforcement.

In one of those cross-town rivalries that could perhaps happen only in Sin City, Goodman and Bloom are now preparing to compete, head-to-head, for the hearts and minds of visitors who fancy a bit of culture with the typical Vegas diet of 24-hour entertainment. And their trash-talking has already reached fever pitch. "I am not the least bit worried about them," Mayor Goodman claimed, in an interview with The New York Times. "They are no competition because we are the real thing. My whole life has been competitive. And I don't lose."

Mayor Goodman, who in his previous career was a defence attorney for underworld figures including Spilotro, Lansky, and Frank "Lefty" Rosenthal, said the rival venue won't be able to compete with his 17,000sq ft, $42m (£29m) attractions, which he says will include an interactive courtroom, where visitors can be finger-printed.

His museum, to open in downtown Las Vegas next March, will also showcase perhaps the most famous piece of brick and mortar in the history of organised crime: the Chicago wall against which six of Al Capone's gangland rivals were lined up and shot, in the Prohibition-era St Valentine's Day Massacre of 1929.

Bloom laughed off Goodman's attempts at one-upmanship when he invited The Independent to the warehouse where the Las Vegas Mob Experience is being assembled. His collection includes the belongings of every significant local mobster, he said, including Sam "Momo" Giancana, whose 74-year-old daughter Antoinette is backing the project.

"Look," he said. "We've bought up all the estates from all the major mob members you could possibly want. So honestly, I've no idea what the other place can have that will be worth seeing. We'll be first to market. We'll have a Strip location, while they're miles away from the major hotels. Their exhibition will be static, like a traditional museum. We'll be more dynamic."

Like all good poker players, Bloom and Goodman are still keeping plenty of cards close to their chests and have yet to unveil many of the most important items of memorabilia that they will eventually be showcasing. But Bloom's firm, Eagle Group Holdings, will be first to show its hand: on 11 June, he plans to unveil a selection of his most headline-grabbing pieces at a press conference. It will include, he claims, "a major piece which will shed light on the assassination of a US president". Historians have long wondered if JFK was shot on the orders of Giancana, because (despite Kennedy doing business with the Mob early in his career) he tried to crack down on Mafia operations after he took office.

Bloom will also unveil a "dream team" of curators and designers who are creating a show which, he says, aims to become a Mafia equivalent of Vegas attractions like the "Bodies" exhibition, of dismembered corpses, and "Titanic, the Artefact Exhibition".

He went on: "We've got our curator from the Smithsonian. A team of former Disney imagineers is doing our design. They've got some amazing memorabilia to work with, stuff that's been sitting in the attics and garages for several decades. I'd say there are three dozen major, major pieces that are going to throw open historical doors. But the show's really about entertainment. We want to create an environment that's high-level interactive. For example, we'll be using technology to create holographic, life-size, full-motion apparitions of the gangsters, to tell their stories in the first person."

Getting the memorabilia together was a delicate task. Bloom tactfully approached the descendants of noted gangsters, asking if they had kept diaries, notebooks, and other personal effects which might showcase their forbears in a less damning light than they are usually portrayed. To his surprise, many of them said yes.

"You grow up the son or daughter of one of these guys, and all you'll ever see is the media portrayal, and you'll know that's not quite true. We went to them and said, 'Hey, we want your input', and the family members were ecstatic and threw open their doors to us.

"The families of big-name gangsters are a very diverse group. Some of them are sophisticated, some are a little rough around the edges. But none of them took up crime. For a lot of these mobsters, their dream was to make enough money so their children wouldn't have to follow them into this line of work."

Also working with Bloom are Spilotro's former wife and son. They passed him a treasure-trove of his personal effects, which had been stored in an attic since the day in 1986 when they learned that the badly disfigured bodies of "The Ant" and his brother Michael had been discovered in a cornfield in Indiana.

Bloom adds: "One of things we've found that's fascinating is that a number of these mobsters, whatever they did during the day – and some of them are clearly murderers and thieves – but at night they'd go home and they were model family members, loving husbands, loving fathers. Most of them could have been your neighbour and you'd never know."

How the mob built Las Vegas

*1933: The rise of Las Vegas emerged from the end of Prohibition in the US. When the law that banned the sale and manufacture of alcohol was lifted in 1933, it severely hit the Mafia's multimillion-dollar black-market booze rackets. Mobs turned to illegal gambling, drugs and prostitution to maintain revenues. But pressure to find a legitimate avenue for their activities grew.

*1941: Infamous partners in crime and key members of the Syndicate, Meyer Lansky and Benjamin "Bugsy" Siegel saw a lucrative opportunity to go straight(ish) and turned their attentions to the up-and-coming casinos in the desert town of Las Vegas, Nevada, where betting was legal.

*1946: Siegel opened the first Mob-funded hotel on the Strip, a high-class resort for serious gamblers called "The Flamingo". But he overspent, racking up construction costs of $6m, which seriously angered fellow mobsters who helped finance the project. Siegel was duly "whacked". The murder shone a spotlight on Vegas, which was glamorised as an edgy tourist destination.

*1950s: The Cleveland and Chicago gangs arrived, opening scores of lavish resorts. Legitimate owners fronted the operations while gangsters skimmed untaxed millions from gambling profits divided by Mob "accountant" Lansky.

*1970s: A new Chicago generation, led by Tony "The Ant" Spilotro, took control of the casinos. Reportedly, more gangland murders were committed in the first three years of Spilotro's leadership than in the previous 25 years combined.

*1970s, 1980s and 1990s: Legitimate big-business tycoons such as the reclusive Howard Hughes and Steve Wynn began to cash in. The Mob days came to an end in Sin City. Enjoli Liston