The Carpet Joints

When Prohibition ended, Meyer turned from bootlegging to gambling, which was always his first love. He never really left it, but had merely turned his attention toward the most lucrative racket at the time. When the Volstead Act was repealed, Meyer was pulling in a cool ten grand a year, about $125,000 in 1999 dollars. But as the country went wet, Meyer’s income began to dry up.

"He was driven back to the expertise with which he had won his first illegal nickel," wrote Lacey. "Like Charlie and Benny, Meyer had kept his crap games going throughout the bootlegging years, and the end of Prohibition brought him back to his primary virtuosity – his original love."

Unlike now, in 1933, every state except Nevada made gambling -- save for horse, and in some cases dog, racing – illegal. In New York, there was a huge underground gambling network, but it floated in almost every sense of the word. The games were held on street corners, in back rooms and in suites of hotels. But they were rarely permanent. In many cases, the games were rigged and their operators didn’t worry about their reputations for fairness because they would be running the game blocks away by the next day.

New York turned a blind eye to illicit gaming during the August racing season in upstate Saratoga Springs. A spa community known for its sulfur springs as well as its race track and casino, Saratoga was summer camp for hot Manhattanites roasting in the city 190 miles south. The racetrack opened during the Civil War and after the war Southern horse owners migrated north during the steamy summer months and brought with them the gambling games from the Mississippi riverboats.

"By the 1890s, the casinos of Saratoga in their month of summer glory rivaled those of Europe’s most glamorous spas," Lacey writes. "Saratoga’s two principal hotels on the main street, the Grand Union and the United States, were the two largest hotels in the world."

Ian Fleming, the creator of James Bond, centered the novel Diamonds Are Forever around the spas and racetrack of Saratoga Springs, a town he was not particularly enamored of. In the book, Fleming calls Saratoga "a stinking town, but then all gambling towns are," and points out how the city was permeated with the mob influence.

By the time Meyer Lansky and Lucky Luciano were in a position to have an effect on the market in Saratoga, AR was in charge of the spa town. He paid off the local officials and imported his dealers from New York but he still operated in his traditional manner by having others do the real dirty work. Lansky and Luciano were brought in to fix things with the local pols as well as to run the dining room and entertainment. It was through Rothstein’s patronage that Meyer, Siegel, Luciano and Costello honed the craft of casino and hotel operation.

Lansky and his chums approached casino operation with the same scruples as they had in bootlegging. They knew the percentages were in their favor and that the short-term gains from running a crooked game could never match the almost unimaginable profits from a fair casino.

"Everyone who came into my casino knew that if he lost his money it wouldn’t be because he was cheated," Meyer said proudly.

The Little Man recruited the best dealers and croupiers he could find and paid them a salary plus a commission – a percentage of the drop on their tables every night. This instilled loyalty and made the dealers pay closer attention to the games and to each other.

In the years leading up to World War II, Lansky had slowly but surely developed a reputation that attracted the highest rollers and most influential gamblers. He was partners with Frank Costello and Joe Adonis in the Piping Rock, a Moorish-style building that exuded elegance. Uniformed valets parked the cars for gamblers, and Costello had imported his chef and maitre d’ from his Manhattan club, the Copacabana.

Having cut his teeth on the Saratoga Springs casinos, Lansky began to branch out. In New Orleans for the 1932 Democratic National Convention, Meyer and his friend Doc Stacher met with Louisiana Governor Huey "Kingfish" Long and arranged for the governor to open a Swiss bank account so that he could accept the $3 to $4 million in cash annually that the mobsters were prepared to pay for the privilege of running casinos in the Big Easy.

"Deeply impressed by this sophistication, the governor gave his visitors from New York carte blanche," wrote Uri Dan. "The opening of the famous Blue Room at the Roosevelt Hotel and of the Beverly Country Club, also in New Orleans, was the beginning of the nationwide development of casinos."

Leaving New Orleans, Lansky went north to Hot Springs, Arkansas, where he worked a similar deal and put Owney "Killer" Madden – former operator of The Cotton Club in Harlem -- in charge. The Hot Springs set up was so luxurious and safe that it became known as a place for gangsters on the lam to hole up until the heat blew over. Lucky Luciano was extradited from Madden’s spa when he was indicted by New York special prosecutor Thomas E. Dewey.

Exercising considerable political muscle, Lansky proceeded to expand his gaming empire into Kentucky and eventually Florida.

The Florida "carpet joints" as the illegal casinos were known, breathed life into the depressed South Beach communities of Hollywood, Hallendale and Opalocka. Just across the county line from Miami, some small-time casinos and bingo houses provided Lansky with the perfect set up for a south Florida empire.

jake & meyer.GIF (41060 bytes)
Jake (left) & Meyer

The good people of Broward County were not necessarily ambivalent toward the carpet joints that people like Meyer Lansky, Jimmy Blue Eyes Alo and Potatoes Kaufmann were putting up on the outskirts of town. More than once, some high-minded citizens would approach a judge for an injunction against a particular piece of property, which would prevent the gamblers from operating on that site. The carpet joint owners would have to find another place to operate from, which created significant logistic problems for Lansky. So Meyer sent his brother Jake down to Broward County with a sack of cash.

"During the months preceding the reopening (of a Lansky casino), his operations manager, brother Jake, supervised the handouts: to the Benevolent and Protective Order of the Elks, to the Fort Lauderdale Shrine Club, to the Hollywood Fishing Tournament, to the South Florida Children’s Hospital – more than two dozen local organizations began receiving generous and helpful donations from the new owners of the bingo parlor near the crossroads on U.S. 1," wrote Lacey.

The ploy worked and there were no more complaints from citizens.

1. The Mythical Meyer

2. A Fortune Found

3. Bugs & Meyer Mob

4. Meeting with the Brain

5. Italian and the Jew

6. The Carpet Joints

7. Havana

8. Vegas

9. Israel

10. Lansky's Legacy

11. Bibliography

12. The Author
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