The numbers racket in various forms has been known to the world since at least 1530 when the Italian national lottery started (well before the political unification of Italy, indicating perhaps that gambling may have been more of a driving force than nationalism). Through the centuries—and certainly in our time under Mafia rule in the United States—the numbers game has been without doubt the biggest and most profitable gambling racket of all.
According to recent estimates, at least 20 million people a day engage in this illegal pastime, and the total annual take is in the billions, with organized crime reaping a quarter billion in profits in New York City alone. Even state lotteries have not crippled the illegal racket; numbers players don’t have to make the IRS their partners in big scores.
So-called policy shops, where people go to play the numbers, showed up in America in the 1880s. Al Adams, a New York operator, had about 1,000 policy shops in the city, and was one of the biggest bribe donors to Boss Tweed’s Tammany Hall. Adams became known as “the meanest gambler in New York” because he rigged the numbers results not only to cheat his clients but also so that he could then bet heavily on the correct numbers with other operators so that he could drive them out of business and take over their shops.
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Eventually Adams went to prison after Tweed was dethroned. To reassure numbers players that everything thereafter would be legit, operators switched to taking the numbers from Treasury Department figures, released daily by telegraph, and obviously not to be fixed.
While numbers had been played in the United States since 1880, the game has changed many times, and, although long popular in Harlem, penny-ante numbers, which was to prove the most lucrative of all, came into being only in the 1920s. Before that even black operators in Harlem sold only 50¢ and $1 numbers tickets.
Later they experimented with a 10¢ ticket. Over the years both Lucky Luciano and Meyer Lansky told various interviewers that Lansky was the true inventor of numbers, meaning the game, which could be played for as little as a penny by inhabitants of the poorest ghettos. Certainly among the players on the Jewish Lower East Side the opinion was that numbers was Lansky’s game.
Interestingly the Chicago Outfit did not discover numbers until the 1940s when Sam Giancana was doing time in the federal prison at Terre Haute. Black racketeer Edward Jones bragged to him how much profit he was making out of the numbers racket, with most of his customers making bets as little as one cent to a nickel.
The Chicago Outfit then slaughtered the black operators and took over. Even though there was a national crime syndicate and the New York mobs under Luciano and Lansky had made millions out of the racket, they had never informed Chicago how profitable the business was. Within organized crime the fact remains that things operate the same as in legitimate business.
The term policy applied to the numbers game has its derivation in the penny insurance that was highly popular in the poor ghettos; both were a cheap gamble on the future. The winning number, one in a thousand ranging from 000 to 999, paid off at 600 to one. Meaning that for 1¢ a winner would get back $6 (or less in certain localities).
Since mathematical odds against the player were actually 1,000 to one the profit potential in numbers is far greater than in any other form of gambling. Numbers operations thus could support a whole bureaucracy from the “banker” on top down through operators, distributors, agents and runners. Basically, only the agents and runners face much risk of arrest, and it is the duty of those above them immediately to bail them out and put in a fix to prevent a conviction, or, at worst, to support the families of those sent to prison.
Whether or not Lansky was the inventor of pennyante numbers or not, it was hardly a copyrightable idea, and it soon was embraced by armies of independent operators. A Madam St. Clair, a Harlem operator, became a millionaire from numbers and would have done so even if she hadn’t thrown in an extra fillip—her policy wheel was credited with providing a magical potency to the players.
The mobsters were not about to let independents like St. Clair clean up in numbers. Prohibition beer czar Dutch Schultz pioneered the forcible takeover of the numbers racket in Harlem, terrorizing individual bankers into buying his protection and then simply announcing he was assuming control of their businesses.
Madam St. Clair once avoided mob executioners by hiding in a pile of coal in a Harlem cellar. Schultz reintroduced the old Adams method of cheating on the numbers results which had been switched by then to the wagering totals of various racetracks. Schultz’s “mathematical brain,” Otto “Abbadabba” Berman, worked out a system to rig the numbers so that only low-played numbers won.
After Schultz was murdered by the syndicate the numbers racket in Harlem was effectively taken over by Luciano and Lansky, with operations under the supervision of Vito Genovese, Luciano’s right-hand man.
Over the years probably as many murders have been committed to gain control of and hold onto the numbers racket as were done during the old mob bootleg wars. Certainly, numbers money remains in many areas the prime source of illegal payoffs to politicians and police for protection.
It is often said that the Mafia has been losing control of the numbers racket as the ghettos turn increasingly black and Hispanic. It is a theory nurtured by the Mafia. The fact remains that the mobs in some places have simply granted “franchises” to certain ethnics (as in the past to Poles and Jews, among others, in their ghettos) and for their pay guarantee full protection to the numbers operators.
