It's game-on between Nucky and Rothstein in the finale. Can you explain how the wheels were turning?
Much like Nucky, Rothstein is a master manipulator, a really terrific chess player who is usually three or four moves ahead of his opponent. When Luciano and Lansky came and pitched Rothstein on the idea of the heroin business, he knew they'd be disappointed when he said "no." What they didn't realize is that Rothstein would now assume, "They really want this deal. They may be going to one of my rivals." So Rothstein—behind the scenes—arranged for Luciano to be arrested by two detectives who we come to learn are in Rothstein's pocket.
Everything is an angle for this guy. When Nucky calls and says he has this "huge distillery," ever the chess player, Rothstein thinks, "OK, well, I have these cops in my pocket, I have access to 50 pounds of heroin that belongs to Joe Masseria—who happens to be in a war with Nucky Thompson. How can I turn this situation to my advantage?" He realizes what Nucky wants is Masseria to back away. And what does Nucky have that Rothstein wants? This big distillery. What Rothstein doesn't realize is that he is also playing with another good chess player—Nucky.
Rothstein's gamble effectively ends his mentorship of Lucky.
This is Rothstein saying goodbye to Luciano; "You made your decision, you want to align yourself with Masseria. As long as your interests don't conflict with mine, we'll be OK, but it's time for you to move on." Rothstein knows there is a lot more profit in keeping somebody alive and working with them than simply killing them. And Luciano is very good at what he does. He'll probably be useful as an ally or a business partner down the road. So Rothstein's first instinct is to work out a business deal rather than resort to violence.
With Masseria's guys ready to leave town, why have Chalky and Capone ambush them?
Nucky now has created a tremendous problem for Arnold Rothstein. Nucky didn't agree to anything; it was Rothstein who promised Masseria: "If you pull your men out, we can go into the heroin business together." So once Nucky got what he wanted—getting those guys outta there and having access to Gyp Rosetti—he completely turned the tables on Rothstein by assassinating all of Masseria's men. This is Nucky's "f**k you" to Arnold Rothstein.