Title: New York's Gambling History [MUSIC]

Matt Katz: It's The Brian Lehrer Show on WNYC. I'm Matt Katz. I used to be a reporter here at WNYC, and today I'm keeping the seat warm for Brian. With sports betting on the rise and state officials deliberating over proposals for three new casinos in the New York City area, we'll now take a look at the history of gambling in New York City with New Yorker staff writer Adam Gopnik.

He's got a new piece out, headlined The Engines and Empires of New York City Gambling. He joins us to talk about the kingpins that made New York the national center of illegal gambling in the last century. Adam, how are you? Thanks for coming on.

Adam Gopnik: Delighted to be with you, Matt.

Matt Katz: Before we get into the history of the gambling trade, you wrote that just as New York is about to grant a gaming license to three of eight bidders looking to build a casino in New York City, and I'm wondering if you were hoping to learn about the new era that we're about to enter in New York in terms of gambling by looking at the past. Was that one of your intentions, either personally or otherwise? Yes.

Adam Gopnik: Excatly. Yes. Now I have nothing to say because that's exactly it. Getting in with all of the talk about a new casino, particularly the idea of a Times Square casino, I got fascinated with what had happened in the past because New York is both the center of illegal gambling and also a national center of gambling, but rather than writing what we technically call a thumb sucker, where you try and bring together the many threads and make too mid generalizations, I thought I would write about individuals, particular people who had been central to the history of gambling in New York and allow them, so to speak, to pass the torch or the deck of cards from one to the next over the past century, like an anthology musical, more than a somehow a synthetic piece.

Matt Katz: Very good, and one of your central characters in that anthology musical is Arnold Rothstein, who you identify as the figure at the center of gambling in the 1920s and the 1910s. You say that's the time when gambling became a "lucrative, criminal and increasingly national enterprise." Tell us about Ross.

Adam Gopnik: Yes, exactly. Well, Rothstein is a name I think most people have heard vaguely or specifically. It's a little like Houdini, right? No, we may not know the history of magic. We've all heard of Houdini. We may not know the history of gambling. We've all Heard of Arnold Rothstein. What fascinated me about Rothstein was a couple of things that I didn't know till I started reporting it.

One is that he did nationalize gambling through a system of what are called layoffs. The problem, always, for any bookie is that you get too many bets coming in on the favorite and you have to even it out so you don't take too big a loss, and one way of doing it is to get another bookie to get a matching bet on the underdog, so you're constantly trying to balance it, and what Rothstein realized is that in an age of mass communications, as it already was, you could lay off the bet someplace outside the immediate vicinity.

In that way, he began to build up a national network which became the underlying infrastructure of national organized crime, and Rothstein also was someone of certain kinds of social, and you could even say sartorial pretensions. Nick Pileggi, the great chronicler of American gangsters, pointed out to me that he was the one who got gangsters well dressed. We think of all of the Italian gangsters of, if I might call it, the high period of New York crime as being turned out in well-made suits and ties and hats and so on. That was Rothstein's influence.

Matt Katz: Oh, so interesting, and then sports gambling is the other influence that he had. 1919 World Series scandal, another period in our history that people might be familiar with to some degree, but Rothstein's involved in that.

Adam Gopnik: Yes, we all think of Rothstein as the model for Meyer Wolfsheim in Scott Fitzgerald's The Great Gatsby, and he's simply the guy who fixed the World Series, and there again turns out to be a more complicated story because the latest research on that shows that while Rothstein was somehow involved, he may not have been directly directing the fix, that in fact that fix began with the players themselves who had a kind of culture war going on within the Chicago White Sox dugout between the Ivy League-educated players and the more blue-collar players. Very much prescient of our own time, it was the culture war that produced the fix, and Rothstein was delighted to take credit for it because it increased his legend.

Matt Katz: It's The Brian Lehrer Show on WNYC. I'm Matt Katz, filling in for Brian, and we're speaking with New Yorker staff writer Adam Gopnik. His new article is headlined The Engines and Empires of New York City Gambling. Listeners, we can take your oral history calls and texts on the history of gambling in New York City. Did your relative win big enough to buy your family home, as I learned that Colin Powell's father did in Harlem from your article?

Does your family have a legend from prohibition-era layoffs and the organized crime ring surrounding it? Maybe your family members' love of dice or poker games led to hardships at home. Call or text us at 212-433-WNYC, 212-433-9692, and we actually already have callers coming in. I'm going to go right to the phone lines. How about Jason in Brooklyn? Hi, Jason.

Jason: Yes, thanks very much. You mentioned organized crime. I want to just mention that what I call organized exploitation in the form of the explosion of state lotteries across the country, your guests will probably know that in the '60s and '70s, this was a controversial movement. Anyway, in New York State, there's been a 50-fold increase since the 1970s in how much New Yorkers spend on the New York State lottery.

It's over $10 billion a year, and the net revenue for the state is about $4 billion annually. I could go on, but let me be concise with a couple of more points. The lottery certainly preys on disadvantaged individuals, and the message is that it raised money for education in New York State. Former Comptroller of State Carl McCall indicated that that's misleading, that there's fungible funding, so to speak, and that it does not raise additional money for education.

Again, this to me just drives me crazy whenever I'm in a disadvantaged neighborhood and I see people playing the scratch-offs, and lastly, I promise that there's been research that in many disadvantaged communities, people see this as their best chance of improving their financial situation. How sad is that? What does that say about our economic system?

Matt Katz: Thank you, Jason. Thanks for calling in. Adam, go ahead.

Adam Gopnik: Matt. What's fascinating about that is that the second episode in my essay is about Madame St. Clair, who was this extraordinary Black woman numbers runner in Harlem in the 1920s and 1930s. What's fascinating about it is that that was essentially a lottery of a self-produced kind in Harlem in an underprivileged neighborhood, and as exactly as you said, though it was predatory and rapacious in some ways, it actually did enable Colin Powell's father to buy their family home.

I think it's an error to think of that kind of thing as being produced from the top down. When people had a chance to self-organize, like Madame St. Clair was a legend in Harlem in the '20s and '30s, they did it for themselves. That seems to be a human appetite that the state has subsumed or appropriated, but there was a time when it was very much part of the organic culture of Harlem.

Matt Katz: Yes, she was the queen of numbers, as you wrote.

Adam Gopnik: She was the queen of numbers and a social legend in her time, and just to add to it, one of the things I wanted to do in the piece was to show how each period of gambling affected the next with that kind of fatalistic certainty, so the reason she eventually went out of business is because she didn't have a decent layoff system. There's a famous incident called Black Wednesday, where everybody in Harlem essentially bet on one number the day before Thanksgiving, and it wiped out the local numbers runners because they were redlined, so to speak. They didn't have sufficient resources to pay off.

Matt Katz: Wow. But you can draw a throughline from the queen of numbers, Stephanie St. Clair, to the current lottery system we have today that the state relies on for revenue.

Adam Gopnik: Exactly. One of the reasons that organized crime in New York receded to some degree is because the state took over many of its functions. The state runs the lottery now, not the local numbers runner, who my own father can well remember, and we don't have loan sharking quite as much because we all are on credit cards. That's the way that our society has evolved for good or ill.

Matt Katz: When did this begin in earnest in New York? Much of your piece takes place in the 20th century, but bets were being made before that. In The Gilded Age, the HBO series, there's a gambling scene in the 1800s with a visit to a house of ill wills. What was it like in the 1800s in New York City in terms of gambling?

Adam Gopnik: Well, that isn't as you exactly say. I really begin my story with Rothstein in the 20th century, but one of the fascinating things was what's called the Faro game, which was the most popular gambling game in New York in the 19th century and was a complicated machine kind of game that was usually rigged, and yet people seemed not to have protested it.

It's a curious thing, Matt, that people don't seem to be as indignant about getting caught up in obviously rigged games as they might. You see the crowd around the three-card Monty players in Times Square, and that game is simply rigged, right? It's simply a scam, and yet we're all drawn into it almost magnetically. As I say at the beginning of the piece, it's as if the appeal of gambling is that people like to lose money by predicting future events.

Matt Katz: It's a deep psychological insight there. I wonder.

Adam Gopnik: Yes, addiction. Well, gambling is a kind of addiction. After Madame St. Clair, one of the figures I talk about is a once well-known writer named Jack Richardson, writer, playwright of enormous gifts who essentially threw away his career in order to play and lose money playing poker in the back room at Elaine's, the famous writers' restaurant and club of a kind in the 1960s and '70s. Again, a fascinating study in addiction and self-destruction through card playing.

Matt Katz: We have a gambling story coming from Dante in Brooklyn. Hey, Dante, thanks for calling in.

Dante: Hey, how are you guys doing? Adam, I really liked your article. I read it on Sunday on the beach.

Matt Katz: Ooh, nice.

Dante: Reading it reminded me of a story my dad told me, and I thought I'd call in and talk about it. I can't use anybody's name. My dad, I'd say, a few times a year goes and plays a close poker game in Brownstone off of Pierrepont Street in Brooklyn Heights, and the guy who runs the game is a known Wall Street billionaire, and these are all Wall Street guys who play.

I remember the buy-in is pretty steep, like what you're mentioning in the article, like $1,000, $10,000 a buy-in, and my dad noticed that the billionaire's best friend was cheating at the card games. He was stacking decks, and I think he was counting cards, and my dad, in confidence, told the billionaire who was running the game, and the billionaire did nothing about it.

My dad realized it was better for this Wall Street guy's reputation that people didn't know that he didn't figure out that his best friend was cheating on him, so it's better for the best friend to keep cheating, and so this guy has probably fleeced the billionaire; it was like at least $50,000. It's not like Molly's Game. It's not as high stakes as that, but it's just a great little New York gambling story that it reminded me of that when I was reading the article on the beach on Sunday.

Adam Gopnik: Well, I'm glad you enjoyed it. [crosstalk] Yes, Molly's Game, referencing Molly Bloom, who ran a high-stakes poker game in New York hotels a while back in the 21st century, though, and what's fascinating about she said to me, we had an interesting series of conversations that she ran a game in Los Angeles that was dominated by Hollywood people, and they hated to lose.

They couldn't tolerate losing, whereas the New York finance people who played in her game were accustomed to losing. That was what happened to them every day. They had highs and lows, and that the temperament of the game was surprisingly much more equitable, exactly as you're describing. It just went along in a certain sense.

Dante: Yes, and I think it's because this billionaire staked his reputation on seeing the odds and being able to predict things that he didn't want people to know that he didn't see his own best friend cheating in the cards.

Adam Gopnik: Yes, you have to keep your reputation.

Dante: [unintelligible 00:13:37]

Adam Gopnik: You have to keep your reputation intact for penetration. Exactly, and that's more important than the money you might win or lose at a poker game.

Matt Katz: Thanks for calling in, Dante. Appreciate it. Cheating, as Dante brought up, is central to the history of gambling, Adam. You talked about that.

Adam Gopnik: Yes, one of the things I'm pleased with and proud of, if I may say, in this essay, is that I think we cracked the case of Arnold Rothstein's murder, which has been a hugely argued-over, controversial event. When he was killed in the 1920s at the Park Central Hotel, which is still intact, because he was infuriated by the idea that he had been cheated at a card game, which puzzled people because, A, how would you cheat Arnold Rothstein?

And, B, he knew that you won and lost, but it seems that he was cheated by what's called a really diabolical scam called papering the neighborhood where you fill every place that sells cards nearby the game with marked cards, with packs of sealed marked cards, so that the guy who's being played goes and buys the cards, thinking that they'll be impeccable, when in fact, they've already been rigged, and through the help of a kind of network of card sharks and magicians, I'm lucky enough to know, it seems clear that the people who took advantage of Rothstein were papering the hotel, were papering the Park Central Hotel, and he realized it too late and was infuriated by it.

Matt Katz: Wow. Wow. This had not been reported before that, and you were able to figure this out?

Adam Gopnik: It had appeared in a couple of very specific-

Matt Katz: Got it.

Adam Gopnik: -books and in some privately printed notes, but we were able to fish it out with the help of some brilliant magicians.

Matt Katz: We have a call from Francesca in the Bronx, who's going to tell us another side of the gambling story. Hi, Francesca. Thanks for calling in.

Francesca: Hi, so I like history as much as the next girl, but I would love it if we could maybe try to not romanticize all of this. My grandfather was involved in a lot of this, and this stuff ruined families. It ruined lives. It ruined so much. My grandfather, he had a stake in a casino in Cuba that he lost at the same time, as he couldn't cover some very large bets. The family lost the house because he had to cover it somehow, or we were all going to be in danger.

My grandmother was homeless. As a result, my aunt and my mother were traumatized growing up with this kind of stuff in and out of the house. I remember this stuff in and out of the house. We were under surveillance. I found out later as a grandkid. It's not funny. It's not cute. It's not romantic. It's not. It's not, and it's dirty money. I'm just as well that the money was lost, to be honest, because it's dirty money as far as I'm concerned, with a lot of the origins of this. I just don't want it to be cute and romantic. You know what I mean?

Adam Gopnik: Yes. Nor would I want it to be. In fact, I made, as I was saying a moment ago, the central protagonist of the story, the writer, Jack Richardson, exactly because he was someone who was ruined by his addiction to gambling and poker playing. Molly Bloom, who's the most recent protagonist, got out of the game exactly because she saw how essentially ugly it was.

You're absolutely right that we shouldn't romanticize it. At the same time, it's part of our civic history, and in order to understand the history of the social history of New York, it's important to understand the ways in which gambling has provided a kind of illegal and, as you say, destructive foundation for so much else that has happened here.

Matt Katz: Thank you for the call, Francesca, and sorry for the pain your family experienced because of this. You mentioned, Adam, Molly Bloom. What was the game that she brought to Manhattan?

Adam Gopnik: Well, she brought a high-stakes poker game to Manhattan, imported it here from Los Angeles, where she'd been running it at a time when, as you may remember, Texas Hold'em was the game of the period, and it drew in all kinds of high-rollers, big finance guys, and players. She had a kind of fascinatingly detached and analytic view of it, and she saw the degree, which, as our caller was saying, it was an addiction.

Now, it was an addiction that the people who were playing with her or playing in her game could afford. They were very wealthy men, but the elements of self-delusion that went on as the game went on were extraordinary, and she talks about it. She also told me something very interesting that speaks to the question of gambling today, and that is that the romance, the seeming romance of gambling, has been wildly reduced by the appearance of what she called the quants.

That is mathematically trained gamblers who can see and compute instantly what the odds are on any given bet, and they just play a rigorous algorithmic game, and it's much more successful than the old-fashioned kind of marauding pirates game, but it's also, she told me, far more boring and far more tedious, and that's one of the new elements that's come in. Of course, I end the piece with the explosion of Internet gambling. All of those sites which are now legal that enable you to bet on sports and on horse races, and so on. We're in a very different world of gambling now than we were a century ago.

Matt Katz: Molly was operating in the '90s, in the early aughts, in a legal gray area, I guess.

Adam Gopnik: In a legal gray area. It's not against the law to have a friendly poker game where people make bets; it's against the law to make money running a friendly poker game, so she had to walk a kind of tightrope, and eventually she fell off it and got arrested and indicted for it. It's not a very safe game to play. Although, as I say, it's being washed away, that history of illegal gambling, by the appearance of all of those online gambling sites. She had her game played at the Plaza Hotel. I wish it had been at the Park Central because then there would have been a direct line between Rothstein and Molly Bloom, but there's an effective line of New York hotel life.

Matt Katz: Now, let's keep it in the present. Now, Susan from Sarasota, Florida. Hi, Susan. Thanks for calling in.

Susan: Hi, can you hear me?

Matt Katz: We can, yes.

Susan: Oh, good. Yes, I'm calling about the legalization of all this online gambling. I have a 27-year-old son who became addicted to online gambling and lost his entire inheritance and wound up in huge debt, which completely destroyed his mental state, became very, very depressed, threatened suicide, and this all started in high school, where these FanDuel and others target young men in particular to get involved in gambling, and it can be done 24/7 on their phone.

They can just sit by themselves and place bets on the most minuscule, every single pitch, every home run, even how many times they're going to show Taylor Swift at a cancer game [crosstalk], and this is ruining lives, ruining. I belong to a group of other parents whose sons and daughters became involved in this, and the pain and suffering is horrible, and there's no regulation. There's no regulation targeting these young people, especially young men. To romanticize it in any way infuriates me. Why is this all legal now? They're really ruining lives.

Matt Katz: Thank you.

Adam Gopnik: Well, one of the things that's fascinating about it is that historically, professional sports tried rigorously to keep away from professional gambling. That's why the White Sox fix in 1919 was such a national scandal, and now, on the whole, professional sports have made their peace with exactly what our caller is describing, all of these various apps for online gambling.

They're very much part of the commercial texture of professional sports now, and I'm hugely sympathetic to somebody whose life is in ruin because, as I try to make plain in the piece, compulsive gambling is a deadly affliction. It ended with Arnold Rothstein's death, just to take our leading protagonist and stretches out through that history, but it is like so many of the things that are products of the smartphone and Internet generation, extremely hard to eliminate or discipline, and they do become not just addictive, but as our caller said, addictive in a non-social way.

If there was a partial, I wouldn't say blessing, but a beneficial aspect of gambling is always part of a social community, part of a social network, like Colin Powell's father, and online gambling clearly is not.

Matt Katz: Arnold Rothstein's mind would be boggled by the availability of sports betting and how many different kinds of bets, as the caller mentioned, and Susan, I'm so sorry for what you've experienced, but as the caller mentioned, it's unlimited how much you can gamble on a particular game, during a game. It's amazing.

Adam Gopnik: You can gamble on who will score the next point, who'll score the most points. It's a constant revolving thing. It's no longer who will win and who will lose. That's always been true about gambling, but much more so now than ever before.

Matt Katz: It's not just the sports gambling now, then it's the casinos. As we mentioned at the top, we're getting new casinos in New York. You write in the piece, casinos have a chancy reputation for a reason: they promise economic growth, but tend to end up as factories of bad faith. Each of the eight bidders, these are the eight bidders for the casinos, are promising job creation, tourism, big business if their casino is built. What about this history that you've laid out casts doubts on those promises by the folks who are bidding for a casino license?

Adam Gopnik: Well, two things. One, as our callers have reminded us in this conversation, gambling is an addictive and destructive thing. One of the people who was testifying before the hearings on the possibility of new casinos said there's no Broadway Anonymous or Restaurants Anonymous, and Gamblers Anonymous. There is. It's not simply another recreation.

For what it's worth, Matt, I'm opposed to the scheme of a casino in Times Square. I think it would warp and alter the fabric of the things we do love about Times Square, that we love about Broadway, and we love about the whole world that it creates. I think that on the whole, one only need think of Atlantic City. The promise that casino gambling will bring affluence and broad-based prosperity has proven to be illusory again and again, so I'm extremely skeptical of it.

Matt Katz: Before I let you go, Adam, I want to take one more call. This is from Mike in Hackensack. Hi, Mike.

Mike: Oh, hi. How are you doing?

Matt Katz: Doing good. Thanks for calling in.

Mike: Sure.

Matt Katz: Do you have a story to tell about someone you know?

Mike: Oh, yes, okay, sure, sure. Well, I had an uncle. I'm talking about the late '50s through probably the mid-'60s, but I remember it as a very young lad, and he was a numbers runner, and at the time, it was for the Lucchese crime family. At the time, "Chin" Gigante was the boss, and I remember folks coming around and giving him the little pieces of paper and change or sometimes a buck or two.

He'd turn it in and that. It was that whole machine. Occasionally, also remember, the police kind of turned their back on that, for whatever reasons, but occasionally they would have what they called accommodation arrests. I remember every now and again my uncle. We lived down by Spring and Thompson and the West Village, but I remember my uncle getting hauled away to the Bronx, and he was back in a few hours, but that's just a memory I had. Every day, it was two numbers. You had the Brooklyn number and the New York number, and one of them was the last three numbers of the total mutual handle at the Aqueduct. That's how one of them came out. I don't remember the other.

Matt Katz: Wow.

Adam Gopnik: Yes. It was the parimutual. [crosstalk] It was the parimutual number that usually determined it. Matt, just as a more general reflection, it seems to me human beings will gamble. It's a deep drive we have. Just as human beings will take inebriants and intoxicants. We can try and prohibit them, but that never seems to work. What does? We can also try to regulate the habit as best we can and try and make it as harmless as is humanly possible.

That all seems to me valuable work to be done, and we also hate the corruption that organized gambling, that the Lucchese family might impose on it, but it's part of the social history of our city, and it's something that we can't overlook because it's such a rich subterranean current in what gives New York its specific character.

Matt Katz: It seems to me, in reading your piece, it also led to something of the melting pot in the City. I can imagine immigrants being here, being on these streets, and saying, "Oh, this is what you do. This is how it works," and then you had Italians and Jews working together, running numbers, right?

Adam Gopnik: One way to tell the history of New York is through a series of wars of ethnic succession, right? The Irish and then the Jews, and the Italians came together in the Rothstein era. The existence of an independent Black gambling establishment, the numbers racket, like Madame St. Clair, is in itself a significant thing that African American historians have taken up as a subject because it was so much about creating autonomy even within a limited realm, at a time when there was so little autonomy for African Americans in the country much, and in the City. Yes, the ways in which ethnic rivalry and ethnic ambition has worked its way necessarily into the inevitable human appetite for wagering is very vital to the social history of New York.

Matt Katz: I want to get one more historical anecdote from you. You had mentioned him earlier, Jack Richardson. He died from a heart attack after giving up his addiction to cocaine. How impactful were drugs in fueling the fervor around gambling during that time? Does that speak to some of these? Go ahead, please.

Adam Gopnik: One of the little subcurrents in the piece and that I discovered is that Rothstein, the original devil in this tale, was also a cocaine and heroin distributor. Much less well known, but he was one of the first people who brought it in, and certainly addiction, alcohol, cocaine, adds to gambling, adds to the other addiction, and it goes hand in hand. The ironic, pitiful thing with Richardson is that he finally got into rehab and got off cocaine, and then died of a heart attack since his system seemed to normalize to it.

He wrote a wonderful book, by the way, called Memoir of a Gambler, which is a dark tale of personal self-destruction, but like so many dark tales of personal self-destruction, it's extremely well told and is not perhaps a cautionary tale, but certainly a riveting confession for us all to read.

Matt Katz: Well, your story, also well told, your piece, The Engines and Empires of New York City Gambling, it's out now. Adam, thanks so much for coming on The Brian Lehrer Show. Really appreciate you walking us down memory lane and sharing some of these sometimes not-so-happy stories. Really appreciate it.

Adam Gopnik: Love talking to you and hearing from all your callers.

 

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