Crime Library: Criminal Minds and Methods

Arnold Rothstein, Dark Genius of the Mob

Bookmaking and Casinos

By 1914 Rothstein was already on his way to becoming the go-to-guy for lay-off betting in the bookmaking business. Since its early years, America has had a love affair with horse racing — and betting on horse races. As placing wagers on the sport became more popular, especially in the country's larger cities, the art of bookmaking, also known then as pool operating, became popular too. It was not until Rothstein came along to organize the various bookmakers that it became a huge money making venture. By the mid-teens Rothstein's ever-growing bankroll allowed him to set the terms for what became known as the lay-off bet. This is the process of evening out a bookie's slate when one horse has so much money riding on it that the results can break the bookie's bank. He simply bet's the other way with someone with enough money to handle the bet and the two split the winning percentage from the bets placed.

Rothstein was soon known from coast to coast as the man who could handle any lay-off bet. Assembling a loyal group of men who worked around the clock for their master, Rothstein's ability to take care of this type of betting would last until his death.

Meanwhile, as the country moved through the 1910s, Rothstein's gambling contemporaries in New York fell by the wayside. Having one of the few reputable gambling houses in the city Rothstein decided to close up shop because it had become too well known. In 1916 he opened a new casino in Hewlett, Long Island where the cost of "protection" was not nearly as high as in Manhattan. Both the building and the land the gambling house occupied were owned by a state senator who was recognized as a major political figure in the area. The casino was lavishly furnished and provided the gamblers, who arrived by invitation only, with the best in food and drink. All of the casino's employees were required to dress in appropriate eveningwear.

Rothstein took advantage of what he termed "snob appeal" for his gambling den. "People like to think they're better than other people," Rothstein once told Damon Runyon. "As long as they're willing to pay to prove it, I'm willing to let them." For three years he allowed them to "pay," to the tune of $500,000 in profits, before he closed the club in 1919 after the local authorities became greedy.

Rothstein did not remain out of the casino business for long. In 1917 he was approached about bankrolling a gambling house at Saratoga, which he did until closing his Long Island operation. Rothstein then opened his own place in Saratoga, which he named the "Brook." The combination cabaret, gambling casino, nightclub and restaurant was described as one of the grandest of its kind. The Brook drew the wealthiest gamblers in the country. Katcher claims, "Rothstein wanted only the best people as customers. To him 'best' and 'wealthiest' were synonymous. He had no other gauge than money by which to judge."

After the 1922 racing season was completed a reform mayor was elected in Saratoga. The candidate ran on a platform to rid the area of bookmakers and gamblers. Shortly after the election an "emissary" of the mayor-elect contacted Rothstein to let him know the new city leader was "willing to forget some of the promises he made."

"How much?" barked Rothstein.

"You can take care of it for $60,000," came the reply.

Rothstein shot back, "You go back and tell him to go to hell. Anyone who'd sell out a whole town wouldn't hesitate to double-cross one man."

The Brook was sold and, while Rothstein stayed clear of owning anymore casinos at Saratoga, he continued to bankroll various operations until he died. One of these gambling houses was the "Chicago Club," which came into the possession of a group of investors headed by Charles "Lucky" Luciano.

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