Biographies & Memoirs

Appendix: The Outfit and Gambling

It has been called the “meat and potatoes” of organized crime, providing an uninterrupted flow of income for the nation’s generations of hoods. Gambling was also a close runner-up to booze and sex as the most desired vice secretly coveted by the repressed Puritans of early America. Boston mob boss Vinnie Teresa opined, “Gambling is the standby and the foundation. From it comes the corrupt politicians and policemen, the bribes and the payoffs, and sometimes murder. If you could crush gambling, you would put the mob out of business.”

Gambling, like alcohol consumption, was recognized by the nineteenth-century Euro immigrants as a fundamental human drive that would probably someday be legalized. Luckily for them, it wasn’t yet, allowing the new arrivals to have the playing field to themselves if they so desired. The early gangs knew what it took officialdom many years to admit. In 1985, law professor Jerome Skolnick told the President’s Commission on Organized Crime something it probably already knew: “Clearly, gambling is not perceived as a deplorable evil by an overwhelming majority of Americans.” Dr. Gustav Carlson, a sociologist and gambling expert, pointed out that gambling is a universal human activity.

Although gambling is most obviously tied to the genetic mandate for self-preservation (i.e., money = security), Skolnick pointed out that there was much more to the subject. He noted that the compulsion to gamble is an extremely complex drive, but is clearly linked to a person’s desire to exponentially increase his interest in any event he or she is observing. “Gambling seems, above all, then, to offer self-interested recreational involvement,” Skolnick said. And it does not take a large wager to greatly affect the gambler’s interest in an observed event. “A ten-dollar bet is what keeps a Chicago fan from turning off a televised football game between Miami and Chicago,” Skolnick testified. The eminent University of California scholar went on to point out the many paradoxes in the long history of illegal gambling, especially noting the otherwise antigambling Catholic Church’s flourishing bingo enterprises. Social scientist Robert Herman, writing in Gamblers and Gambling, asserts that the tug of gambling is also linked to the need for personal autonomy. Herman wrote, “[Gamblers] seek an activity that allows them to set themselves individually apart, to establish their distinctiveness, and their autonomy.”

Skolnick also addressed the more serious gambling associated with horse racing and casinos, noting that “deep play” was a mark of social status dating back to sixteenth-century English noblemen. Anthropologist Geoffrey Gorer, in The American People: A Study in National Character,called the gambler’s winnings “the adult equivalent of the marks and grades which signified the schoolchild’s relative position in regard to his fellows.” Legendary Las Vegas oddsmaker Nick the Greek perhaps summed up all the theorizing most succinctly: “Money is just a way of keeping score.”

It is doubtful that Joe Accardo and his crew spent any time debating the allure of gambling. But they certainly were experts in the ways of satiating the gamblers’ cravings. Like alcohol, gambling (especially lotteries, off-track betting, and slots) would eventually be legitimized by the upper-world. But until that day, gangs like the Outfit were more than happy to fill the supplier void.

Chicago enjoyed a long history with gamblers and their culture. And since the days of nineteenth-century gambling czar Mike McDonald, Chicago officialdom happily looked the other way - at least as long as the graft kept flowing. After McDonald, Jacob “Mont” Tennes took up the baton, using the newly devised telegraph wires to transmit instant horse-racing odds and results to “handbook” operators (authorized bet-takers operating in poolrooms and bars). In 1911, Tennes spent a rumored $20,000 to insure the election of Mayor Carter H. Harrison. Former director of the Chicago Crime Commission (CCC) Virgil Peterson wrote: “With the election of Harrison it was commonly understood that gambling would be permitted to flourish without interference from the police.” The CCC learned that the number of gambling establishments in the Loop was doubling every two months. Harrison’s City Hall and police department were even found to have sided with Tennes in his war with the wire service competitor, the Payne New Agency. A Civil Service Commission inquiry concluded that the pols had conspired with Tennes’ General News Bureau to drive out “nonsyndicate” gamblers, essentially guaranteeing an uninterrupted flow of payoffs to the corrupt officials. It also guaranteed the constant reelection of Harrison, who served for five terms.

After the Tennes-Harrison association came the Capone-Thompson arrangement, which permitted the Capone Syndicate to propagate in the twenties. Now, with Capone’s heirs running the games, the latest pushover to occupy the mayor’s office was the notorious Ed Kelly. When Outfit adversary Mayor Anton Cermak was assassinated in 1933, it fell to Cook County Democratic Party chairman Pat Nash to appoint a successor. Nash, a tax cheat to the tune of $175,000, chose the even more corrupt chief sanitation engineer, Ed Kelly, to assume the mayoralty. Kelly had already been indicted three times for fraud involving civil workers who had grown rich off patronage without having worked a single day. Kelly later admitted that, while with Sanitation, he had an annual salary of just over $13,000, but a total income of $66,000.

In the years after Kelly’s mayoral ascension, the Internal Revenue Service found that he had grossly underreported his income. It seemed Kelly had earned at least $750,000 per year above his salary from “incidental income” - in other words, graft. That estimate may have been conservative. The Chicago Crime Commission estimated that the Kelly-Nash machine received $20 million per year from the Outfit alone to allow its gambling empire to proceed undeterred. “The fix is in at the top,” said one local observer. The CCC’s Virgil Peterson called the Kelly-Nash machine “one of the most ruthless political organizations in American political history.” The machine operated smoothly for fourteen years, thanks in large part to the self-perpetuating nature of the patronage system and the flagrant vote fraud that accompanied Kelly’s reelections. Adding in the muscle of the Outfit for good measure, Chicago had the greatest vote-producing machine in American history.

Much like Volstead’s nonimpact on America’s thirst, the outlawing of gambling parlors in the nineteenth century only forced the players to go underground, and not very deep at that. Thus, before legalized casino gambling in the twentieth century, the only place a blackjack, craps (dice), or poker aficionado could obtain any real action was at illegal gambling parlors run by the local crime syndicate. Often, the big-stakes players were forced to locate a movable feast, otherwise known as a floating game. In this version, only gamblers who were known to the organizers were directed by intermediaries to the one-night-only site for the big game, usually in a well-guarded rural locale.

The Chicago underworld not only profited from indoor table games, but from outdoor sporting events such as horse racing. It is generally believed that Al Capone became involved in the races in 1927. At the time, the sport of kings was in transition. When horse racing debuted in nineteenth-century Europe, it was the domain of the leisure class. However, the lower classes soon co-opted the sport for themselves, not by competing for ownership of the expensive equines, but by wagering on the races they ran. This led to rampant race fixing by anyone with access to the stables: jockeys, trainers, stable boys, etc. In America, the Whitneys and Vanderbilts were shocked to learn that their “pets” were being routinely doped, jabbed with electric prods, or raced under false names. In 1894, industrialist J. P. Morgan joined banker August Belmont in providing low-interest loans to a failing U.S. Treasury. Their resultant influence in Washington virtually guaranteed that the government would take a laissez-faire attitude when Morgan, Belmont, and others set up their own racing monopoly in New York, The American Jockey Club. This trust gave the upperworld total control of licensing for jockeys, trainers, and owners. In 1905, Morgan and Belmont built Belmont Park racetrack in New York.

But the abuses continued unabated, and pressure mounted from prohibition-type reformers to enact the thoroughbred version of Volstead. Much as they would with the sale of alcohol, most states outlawed horse racing altogether during a reform wave in 1908. Some entrepreneurs, such as Kansas City boss Tom Pendergast, ran “underground” horse-racing tracks despite the bans. By the 1920s, operators like Al Capone embraced dog racing, as yet not rendered illegal, as their entry-level sport. Fronting for Capone, before the ascent of Accardo, were Johnny Patton and “Artful” Eddie O’Hare, nicknamed for his sartorial splendor. Patton was known as the Boy Mayor, being the twenty-five-year-old mayor of the Chicago suburb of Burnham. He was known to associate with the Syndicate since at least 1925, when he convinced Johnny Torrio to purchase the Arrowhead Inn and convert it into a brothel/saloon (see Prologue). Torrio made Patton the club’s manager, and Mayor Patton hired his chief of police to tend bar while many Burnham town officials moonlighted as waiters. That same year, 1925, the Boy Mayor was briefly arrested with Frank Nitti. After Torrio returned to New York, Patton was absorbed first into the Capone gang, for whom he also dabbled in political fixes, and eventually the Outfit.

A natural athlete who excelled at golf, horseback riding, and swim ming, Edward O’Hare was a cultivated and skilled attorney, who gave the impression that his only criminal activity involved his racing businesses with Capone and Patton. “You can make money through business associations with gangsters,” O’Hare said, “and you will run no risk if you don’t associate personally with them. Keep it on a business level and there’s nothing to fear.” It was a fine line that O’Hare futilely attempted to walk. In actuality, during prohibition, O’Hare had been arrested for using his office to store $200,000 worth of whiskey for national bootlegging king George Remus. He was released only after cutting a deal with Remus, with each refusing to testify against the other. In addition, it is commonly understood in Chicago that O’Hare took a hefty agent’s fee for managing the gang’s Wall Street investments. As with innumerable other upperworld businessmen, O’Hare was happy to use the gangs to get rich, but would sell them out at the drop of a hat. When he tried to scam the Outfit, his luck ran out. Years after the Big Guy’s conviction, Nitti and Accardo learned that O’Hare had tipped off the court that Capone possessed the jury list and was prepared to fix his 1931 tax trial. (Recall that it was the last-minute jury switch that sealed Capone’s conviction.) O’Hare had also pointed the feds to Capone’s bookkeeper, a turn that became a critical component of the prosecution’s case. Worse still, “the boys” were told that O’Hare had continuously informed for the government in the years after Capone’s trial. Thus on November 8, 1939, while the stoolie O’Hare was driving down Ogden Avenue, another car pulled alongside and its two occupants drew their shotguns, blasting him into oblivion. Eight days later, Al Capone was released from prison. Those on the streets of Cicero understood that O’Hare’s murder was intended as a coming-out gift for the Big Guy. So much for there being “nothing to fear.”1

The Capone-Patton-O’Hare triumvirate chose Capone’s town, Cicero, as the site for their first dog track, the Laramie Kennel Club, later renamed the Hawthorne Kennel Club. (In a few years, the track would be switched over to harness horse racing, once Capone’s councilman, “Mr. Malaprop” Libonati, introduced legislation authorizing the change. In this incarnation, the track would be called Sportsman’s Park.)

The Syndicate’s racing gig was so successful that it began expanding across the country. From Florida to California, Patton-O’Hare-Capone opened new tracks. The expansion also helped reinforce bonds with other crime cartels. In Coral Gables, Florida, for instance, the Syndicate partnered with its slot-machine colleague New York boss Meyer Lansky in running the Tropical Park track. With regional gangs working in concert, racing seasons were scheduled so as not to conflict. In Florida, Johnny Patton, already skilled at the art of the fix, greased the palms of the local pols, assuring that the mob tracks in Coral Gables, Miami, and Tampa were given wide berth. Patton eventually contributed $100,000 to the successful 1948 gubernatorial campaign of Warren Fuller.

With the gangs now running both legal and underground tracks, abuses quickly appeared. Horse-doping with drugs such as cocaine, bribed jockeys, and the use of ringers occurred regularly. After Volstead was repealed, it was wrongly believed that legalizing the tracks would drive the gangs out. Thus, after prohibition ended, the horse-racing ban was also lifted. But the gangs remained in control. In fact, descendants of the Capone family continue to run Sportsman’s Park to this day.


When the Chicago underworld expanded its gambling empire into Nevada, it chose a locale uniquely positioned to accept legalized gambling.

At about the same time that Thomas Jefferson was putting the finishing touches on the Declaration of Independence, a band of Spanish conquistadores led by Padre Escalante ventured northward from Mexico into a territory later annexed by Jefferson’s new world and subsequently named Nevada. When the explorers discovered an artesian spring in the southern part of the region, they christened the area Las Vegas, or the Meadows. After the conclusion of the Mexican-American War in 1848, the Spaniards ceded the harsh terrain to the new nation, and the settlement became little more than a comfort station between major cities. In 1855, Mormon leader Brigham Young dispatched missionaries to Las Vegas from Utah in a vain attempt to convert the Paiute Indians. After three years, the mission foundered, but the Mormons retained a strong presence in northern Nevada, especially in the area that would become Reno and the state capital, Carson City. The Mormons became the dominating force in the Nevada state legislature, where they inserted their belief system into the state’s legal code and licensing procedures. One of the religion’s core tenets is the superiority of fair-skinned people, with the Mormons holding that they are descended from a sixth-century explorer to the New World named Nephi, who was “white and delight some,” as opposed to his brother, the evil Laman, who was “dark and loathsome.” The Mormons’ dogmatic resentment of darker-skinned peoples would become important a century later when olive-skinned Sicilians appeared before them requesting gambling licenses. And although the Mormons were strictly forbidden to gamble, their leadership encouraged them to provide not only the workforce but the financing for the profitable casino industry. A century after the failed missionary settlement, the Mormon-owned Bank of Las Vegas would provide critical capitalization for some of the city’s most lucrative casinos.

Around the turn of the century, southern Nevada experienced a temporary gold and silver rush in the arid Eldorado and McCullough mountain ranges that encircle Las Vegas. With grizzled prospectors in need of R&R, Vegas became a low-class vice district that featured gambling, which was sporadically legal throughout this period. After the mines had been stripped bare in a mere ten years, many southern Nevada towns, including Las Vegas, began the slide toward their previous status as ghost towns. It now appears that when state officials considered ways to rejuvenate the state’s stalled economy, they were aided in their discussion by Curly Humphreys and the Outfit, who were conveniently expanding their dog-racing ventures in the state. The relaxing of Nevada’s gambling laws, which proved beneficial to both the Outfit and the Mormon gentry, was likely the result of graft dispensed by Johnny Rosselli and Curly Humphreys in 1931. And although the Outfit appears to have played a critical role in “opening up” Nevada in 1931, they became distracted from its potential for over two decades. Meanwhile, hordes of less organized hoods from all over the country flocked to Nevada, where they believed they could seize their last chance at the American Dream.

The remarkable history of this desert city is rich with irony. One would have been hard-pressed to find a Spanish explorer who would have believed that this parcel of uncultivatable desert would become the fastest-growing city in the world by the end of the twentieth century. Early Mormon missionaries would be appalled to know that their descendants would one day provide the indispensable workforce for America’s paean to hedonism and divorce, aka Sin City. Gold prospectors would likely have laughed off the suggestion that in time gullible tourists might journey here from points remote to voluntarily part annually with $20 billion of their hard-earned wages. As with the other Outfit rackets, the Las Vegas one would be superficially sanitized in advance of its complete takeover by the upperworld.

1. After World War II, Chicago renamed its airport after Eddie’s son, Butch, who died a war hero.

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