“We Intend to Run It”: Racial Politics,
Illegal Gambling, and the Rise of
Government Lotteries in the United
States, 1960–1985
Matthew Vaz
In early January 1960, Harlem congressmen Adam Clayton Powell Jr. opened the new
year by tying the conduct of everyday illegal gambling in New York to larger forces of
racial discrimination. Speaking to a crowd of several thousand at the Abyssinian Baptist
Church on West 138th Street, Powell asserted that corrupt officers in the New York City
Police Department were working in conjunction with the East Harlem mafia to drive
black numbers bankers out of business. Small-time black operators were constantly being
harassed, while big-time white numbers bankers went unmolested. In response to Powell’s claims, Police Commissioner Stephen P. Kennedy declared, “The law is color-blind.”1
The following week Powell continued to press the issue. Once again speaking from
the pulpit, he discouraged his parishioners from engaging in gambling yet noted that the
true shame was in sending so much money outside the community “to support Italian
and Jewish policy bankers.” Police Commissioner Kennedy responded with a rebuke of
Powell, arguing that race had no place in the discussion of gambling enforcement. In the
words of Kennedy, “The only community the racketeer money supports is the criminal
community.”2
New York and many other northern cities had a history of racial conflict over gambling
dating back to the 1920s, yet such conflict was centered in the criminal underworld and
was thus largely hidden from public view. The dispute between Congressman Powell and
Police Commissioner Kennedy marked the beginning of a period of overt political contestation over the status of gambling in urban America. The discourse on gambling that
unfolded over the subsequent twenty-five years intersected with demands for racial justice, a growing body of thought on the relationship between the law and personal liberty,
elite anxiety regarding public safety and the erosion of order, and a crisis of policing that
demanded significant police reform. Such questions of justice, morality, liberty, order,
Matthew Vaz is lecturer of history at the City College of New York, City University of New York (cuny). This project has benefitted greatly from the guidance of Elizabeth Blackmar and John Coatsworth, and from the careful attention of the editors and readers at the Journal of American History. The research received generous support from
the Professional Staff Congress–cuny, the cuny Research Foundation, and the Department of History at Columbia
University.
Readers may contact Vaz at [email protected].
“Inquiry Is Begun into Charges of Bias in Policy-Bank Arrests,” New York Times, Jan. 5, 1960, p. 14.
Emanuel Perlmutter, “Powell Demands Numbers Inquiry,” ibid., Jan. 11, 1960, p. 33; Emanuel Perlmutter,
“Kennedy Assails Powell ‘Appeal,’” ibid., Jan. 12, 1960, p. 16.
1
2
doi: 10.1093/jahist/jau328
© The Author 2014. Published by Oxford University Press on behalf of the Organization of American Historians.
All rights reserved. For permissions, please e-mail: [email protected].
June 2014
The Journal of American History
71
72
The Journal of American History
June 2014
and law were further shaped by the ever-present class conflicts at the root of disputes over
apportioning the tax burden. Ultimately, the process that began with Powell’s demands
for racial justice in the policing of illegal numbers ended with a massive transformation
of the state’s posture toward gambling, as New York and other northern states established
government lotteries, recasting the social, economic, and political dynamics of gambling
for many millions of people.
The establishment of the New York State Lottery in 1967 was quickly followed by the
initiation of lotteries in New Jersey in 1970, Connecticut, Pennsylvania, Massachusetts,
and Michigan in 1972, Maryland in 1973, and Illinois and Ohio in 1974. In each state
the legislative process was dominated by concerns over illegal gambling and with what a
Maryland legislator called a “tax rebellion,” in which citizens supported lotteries as an easy
way to raise revenues without imposing additional taxes. Yet the early state lotteries of the
American Northeast were by no means an immediate success. Policy makers assumed incorrectly that the establishment of a government lottery would draw gamblers away from
highly popular illegal games, and these state lotteries all floundered in their earliest years.
The reason for their failure was simple: gamblers of the urban North were loyal to the illegal games known as “the numbers” and “policy.”3
“The numbers” is a game played at odds of 1 in 1,000 with a payout of $600 on a $1
bet. To play, the gambler simply chooses a number between 000 and 999. The winning
numbers for the day are determined by an agreed-upon figure that everybody can see
yet nobody can control. Invented in 1921 by a West Indian immigrant named Casper
Holstein, the game initially relied on published daily figures from the New York Clearing House. In the early 1930s the source for daily numbers shifted to intake totals for
agreed-upon horse racing tracks. To this day, the Brooklyn number is determined by the
first three digits in front of the decimal point for the daily handle of a particular racetrack.
If Belmont Park racetrack takes in $47,542.21 on a given day, then the Brooklyn number for the day is 542. The so-called New York number is determined in a slightly more
complicated manner using totals from the third, fifth, and seventh races. Anyone who is
in on the secret can find the winning numbers by glancing at the right spot in the sports
section of the newspaper.4
The game of choice in Chicago has long been “policy.” The terms policy and numbers
are often used interchangeably, yet they are in fact two different games. Winning numbers in policy are determined by the spinning of a wheel, and a bettor picks three twodigit numbers from 1 to 78, with the wheel picking twelve winning numbers for the day.
The odds and payouts in policy are slightly worse than those of the numbers, and in most
northern cities the numbers overtook policy in popularity, with Chicago as the exception.
While the two games have genuine differences, they are also deeply similar. Both games
allowed bettors to wager mere pennies, both games offered reasonable odds of winning
a useful sum, both games were played daily, both games played a central role in the economic and social life of black communities in the North, both games spawned vast networks of police and political corruption in their respective cities, and the customers of
3
On the establishment of the various state lotteries, see Duane V. Burke, “Timeline of North American Lotteries,” Public Gaming Magazine (Aug. 1993), 23–24. Peter A. Jay, “Maryland Affairs: Gambling Bills Kept Assembly
Occupied,” Washington Post, March 25, 1969, p. C1.
4
Shane White et al., Playing the Numbers: Gambling in Harlem between the Wars (Cambridge, Mass., 2010),
13, 63.
Racial Politics, Illegal Gambling, and Government Lotteries
73
both games were eventually targeted by state lotteries. Thus, they will be treated in this
article as a singular phenomenon to be referred to as numbers gambling.
Perhaps the key common feature shared by the two games is the ability of bettors to
choose their own lucky numbers in each. In contrast, early state lotteries of the 1960s and
1970s offered only raffle-style tickets with no possibility for bettors to use their children’s
birthdays, numbers that appear on the hymnal in church, or the content of their dreams
in picking a lucky number. As it became clear that urban gamblers were not interested in
the games offered by the state lotteries, state legislators, governors, and lottery directors
redoubled their efforts and sought to replicate the form of the numbers game to penetrate
the urban gambling markets of New York City, Newark, Baltimore, Philadelphia, Cleveland, Chicago, and Detroit. The lottery laws of New Jersey, Pennsylvania, Michigan,
Ohio, and Maryland were flexible enough that the lotteries there could initiate a daily
numbers game without new enabling legislation. Yet New York and Illinois proved a different matter. The restrictions on prize structure within the lottery laws of those two states
forced a return to the legislative process to create new government-run numbers games.
Those efforts met staunch resistance from black communities and their political representatives. Black political leaders expressed proprietary notions over the game and defended
numbers gambling as a community pastime that provided abundant employment to the
poor. Those leaders opposed the state taking over numbers gambling, and they pressed instead for community control over a legalized game, with legislators in both New York and
Illinois proposing laws to bring daily gambling in black communities under local control.
A detailed study of the New York illegal numbers game conducted in 1972 revealed
how high the stakes were in the conflict. It described an industry with 24,000 employees and annual revenue of $600 million. The fate of numbers gambling was debated in
print, on the airwaves, at the pulpit, and in the halls of state legislatures. This essay examines the conflict surrounding gambling policy during the 1960s and 1970s, with a
primary focus on New York and a secondary focus on Illinois and other northern states.
It is the contention of this essay that for black New Yorkers, and for poor urban communities throughout the Northeast, conflict over gambling policy centered on the question
of whether their communities would be allowed access to taxed gambling (in the form of
jobs and profits) or if they would be taxed through their gambling practices (in the form
of centralized state lotteries).5
5
Fund for the City of New York, Legal Gambling in New York: A Discussion of Numbers and Sports Betting (New
York, 1972), 62, 4–5. Other indicators put the number of persons employed in the numbers game during the era
reasonably within range of 24,000. In 1960 the New York City Police Department made 16,935 numbers arrests.
Given that it is highly unlikely that everyone involved in the numbers business was arrested at some point that year,
it would seem that the figure 17,000 provides something of a minimum estimate. A master’s thesis written in 1966
by Ronald Reis, a New York police detective intimately involved in gambling enforcement, estimates the figure to
be around 20,000. Writing before the conflict between the lottery and the black community emerged, Reis was
prescient, noting that the numbers of people employed in the business are “more than are employed, for instance,
at the Brooklyn Navy Yard, whose proposed closing caused a major political crisis. Moreover, as a class, numbers
workers are by and large otherwise unemployable. If, therefore, we succeed in driving the numbers game out of
existence, we shall also have added measurably to the unemployment and poverty problem that besets New York’s
Negro neighborhoods.” See Ronald Reis, “A Study of Gambling Enforcement in the New York Police Department”
(M.A. thesis, City College of New York, 1966), 182. Supporters of lotteries often referred to them as a form of “voluntary” taxation, while detractors of lotteries referred to them as “a tax on the poor.” Public policy scholars Charles
Clotfelter and Philip Cook refer to lotteries as an “implicit tax.” They write, “the lottery’s profits derived as they are
from a state owned enterprise, are no less useful than revenues that are labeled taxes, so it is altogether appropriate
to label them implicit taxes. . . . Once a lottery is established, the implicit tax can be raised or lowered in the same
way as conventional taxes.” See Charles T. Clotfelter and Philip J. Cook, Selling Hope: State Lotteries in America
(Cambridge, Mass., 1989), 215.
The Journal of American History
74
June 2014
As the Harlem activist James R. Lawson testified in favor of local control to members
of the New York State Legislature in 1971, if a legal numbers game were to be created,
“We intend to run it, come hell or high water.” As the contest over gambling unfolded,
black as well as Hispanic numbers operators in New York and Chicago relied on appeals
to racial justice in their efforts to protect their corner of the economy. These appeals
found little favor in the late 1970s environment of increasing racial backlash, growing
hostility toward taxation, and an emerging demagoguery regarding welfare cheats. Ultimately, lottery expansionists prevailed, and the social practice of clandestine numbers
gambling among friends and neighbors was supplanted by participation in publicly advertised government lotteries.6
While studying the fight over numbers gambling broadens our understanding of the
ways key black communities sought to position themselves during the 1960s and 1970s,
it also deepens our knowledge of the modern origins of the widespread use of lotteries as
tools of governance. In Selling Hope, the definitive account of lottery growth in the United States, the authors Charles T. Clotfelter and Philip J. Cook acknowledge that the numbers game was vital to the success of early lotteries. Yet they overlook the complexity of the
struggle over the numbers game, and in particular they fail to recognize how urban communities resisted the state’s entry into the numbers market. A fully fleshed out account of
how gambling policy was contested during the transformative period from 1960 to 1985
is crucial to any understanding of our present context, in which government lottery play
is a normative aspect of everyday life in much of the nation. In 1960 no government lotteries existed in the United States, and significant federal barriers stood in the way of lottery implementation and success. By 1985 sixteen states ran lotteries, the lottery trend
had broken out of the Northeast, a multistate lottery consortium had been formed without federal interference, and lotteries had achieved the social legitimacy and the political
and economic momentum necessary to become a nationwide phenomenon. The numbers game was the hinge upon which the national approach toward gambling pivoted.7
Beyond the study of gambling policy, the examination of the struggle over gambling
during the 1960s and 1970s contributes to a number of historiographical areas. In particular, study of the relationship between illegal gambling and lottery growth enhances
our understanding of the antitax politics of the 1970s and the related fraying of the New
Deal order. Antitax politics built steady momentum from the late 1960s onward, arriving
at the fore of national political consciousness in 1978 with the so-called tax revolt within
which California voters overwhelmingly supported an amendment to the state constitution that limited the growth of property taxes. The California amendment came on the
heels of a state supreme court decision requiring that property tax revenue be distributed
more equitably to school districts throughout the state. Thus, for many in California, the
issue of property taxes acquired a racial subtext as these taxes were perceived to be subsidizing free education for the state’s poorer black and Latino residents. The work of Thomas Edsall and Mary Edsall describes the tax revolt as a “complex interweaving of race,
taxes, rights, and broader social and cultural conflicts.” Tax politics became racial politics
as “the division of the electorate along lines of taxpayers versus tax recipients dovetailed
with racial divisions.” Regional studies of the broader tax revolt phenomenon, by Kevin
6
7
Eric Pace, “Harlemite Urges Legal Policy Bets,” New York Times, Sept. 16, 1971, p. 19.
Clotfelter and Cook, Selling Hope, 6–7.
Racial Politics, Illegal Gambling, and Government Lotteries
75
M. Kruse, Robert O. Self, and Matthew D. Lassiter, have emphasized a similar theme:
suburban white homeowners in the South and the West felt they were subsidizing public
services for inner-city blacks.8
The political fight over early lottery expansion offers a window onto how antitax politics played out in the Northeast. As was the case elsewhere around the nation, education
funding was a flashpoint for antitax politics, and in the Northeast legislators promoted
lotteries as a means of preventing further tax increases to support public education. As
Illinois legislator John G. Fary said of the state’s original lottery bill, “Passage of this Bill
will be a victory for the taxpayer . . . this is a substitute for taxes. Income therefrom will
delay any thought of increasing taxes.” In New York the issue was wedded with the need
to confront urban criminal gambling. Legislators fused anxieties over taxation, welfare,
and crime to bring the state into the urban gambling market in an attempt to defray the
cost of public education. Meanwhile, as political fights over lotteries unfolded, divisions
surfaced within state Democratic coalitions, with the interests of white suburban districts
seemingly diverging from those of inner-city black and Latino districts.9
In the area of criminal justice, study of the remaking of the nation’s gambling laws
elucidates how shifting meanings of criminality intersected with race and class during
this transformative period. Loïc Wacquant, David Garland, and Heather Ann Thompson
have all explored the expansion of the carceral state and the simultaneous withdrawal of
public services from inner-city America. The recalibration of gambling laws provides a
complementary narrative to the history of mass incarceration driven by drug laws. Drug
consumption and gambling were often grouped side by side within the criminological
discourse of “victimless crimes” during the 1960s and 1970s. Yet the public policy response to drugs was an embrace of harsh punishment and the attendant growth of mass
imprisonment, whereas the response to criminal gambling was the emergence of the state
as a monopoly retailer in the market. Despite these differences, both public policy configurations led to marginalization and disempowerment in inner cities, and both approaches
relied on a heavy-handed state role in regulating the consumption habits of the poor.10
Most importantly, this study expands on the scholarly work that has analyzed the early
history of “numbers” and “policy.” In Playing the Numbers, Shane White, Stephen Garton, Stephen Robertson, and Graham White offer a fully realized account of the numbers
game in Harlem during the 1920s. They point to the importance of the numbers in the
“context of black business history,” explaining that “in the 1920s, numbers had been the
largest black business and largest employer in Harlem.” As local entrepreneurs, the bankers of the game “filled the vacuum left by the failure of banks to service Harlem’s credit
needs.” Yet those who ran the numbers game were not mere profiteers: “Almost to a man
8
Thomas Byrne Edsall and Mary D. Edsall, Chain Reaction: The Impact of Race, Rights, and Taxes on American
Politics (New York, 1992), 131. Kevin M. Kruse, White Flight: Atlanta and the Making of Modern Conservatism
(Princeton, 2005); Robert O. Self, American Babylon: Race and the Struggle for Postwar Oakland (Princeton, 2003);
Matthew D. Lassiter, The Silent Majority: Suburban Politics in the Sunbelt South (Princeton, 2006).
9
State of Illinois, transcript of floor debate, “House of Representatives, Seventy-Eighth General Assembly,
Fiftieth Legislative Day, May 8, 1973,” Illinois General Assembly, http://www.ilga.gov/house/transcripts/htrans78/
HT050873.pdf.
10
Loïc Wacquant, Punishing the Poor: The Neoliberal Government of Social Insecurity (Durham, N.C., 2009); David Garland, The Culture of Control: Crime and Social Order in Contemporary Society (Chicago, 2001); Heather Ann
Thompson, “Why Mass Incarceration Matters: Rethinking Crisis, Decline, and Transformation in Postwar American History,” Journal of American History, 97 (Dec. 2010), 703–34.
76
The Journal of American History
June 2014
or woman, Harlem bankers were what was then known as ‘race men,’ champions of black
enterprise and fervent believers in the importance of the black community in Northern
cities.” And this phenomenon was not confined to New York. Davarian L. Baldwin points
to the Chicago policy game as “both a cultural and economic institution” that played a
direct role in financing black newspapers, black politics, legal black businesses, black music, and black athletics.11
In cities throughout the North, the lucrative business of numbers gambling attracted
the attention of white organized crime groups. With the repeal of Prohibition, gangsters
who had prospered in the illegal alcohol trade scrambled for new sources of revenue, and
the numbers business, with its position outside the bounds of police protection, seemed
like an easy target. Black numbers bankers and workers, however, did not quietly hand
over control of the gambling business, resisting take-overs through a variety of means.
In New York, numbers operators engaged in various “forms of collective action,” such as
forming associations, encouraging customer boycotts of white-controlled numbers operations, engaging in work slowdowns and strikes against white numbers bosses, using
black newspapers to sway local opinion, and employing violence to push back against the
gangster incursion. In Harlem, numbers queen Stephanie St. Claire became a local legend
for her public denunciations of corrupt police and for her refusal to bow to the gangster
Dutch Schultz. In Chicago, policy man Ted Roe achieved similar fame for bucking mob
control until the day he was gunned down in 1952.12
Despite these episodes of resistance, white organized crime groups in the northern
cities successfully subordinated or eliminated black-controlled numbers gambling operations during the 1930s and 1940s. While numbers play in black communities continued
and many blacks continued to staff the game, whites gained financial control over most
operations. As white involvement in the upper levels of the policy business increased, so
too did the playing of the daily numbers among poor and working-class whites in big
cities. Eventually, white racketeers went from extorting what was a black practice to operating a game with a substantial white customer base and a significant number of white
workers at all levels. Racketeers partnered with the police in an organized and systematic
way, making the 1940s through the early 1960s the heyday of mob-police cooperation in
numbers gambling. This arrangement was frequently maintained at the expense of black
and Hispanic numbers bankers.13
The 1960s and 1970s featured a renewed struggle for control of daily gambling, with
the new state lotteries altering the dynamics of the contest. Baldwin notes the game’s
eventual “co-optation” by state governments, and White and his co-authors conclude that
“numbers was eventually made redundant by the state run lotteries in the 1970s.” This
study reveals that the process of co-optation was actively resisted and that this resistance
11
White et al., Playing the Numbers, 22, 248, 215, 213. Davarian L. Baldwin, Chicago’s New Negroes: Modernity,
the Great Migration, and Black Urban Life (Chapel Hill, 2007), 44–51, esp. 45.
12
White et al., Playing the Numbers, 185. On similar efforts against white incursions in Detroit, see Gustav
Carlson, “Number Gambling: A Study of a Culture Complex” (Ph.D. diss., University of Michigan, 1940), 54.
Stephanie St. Claire’s campaign against corrupt police coincided with other community movements against police
harassment and brutality. See Irma Watkins-Owens, Blood Relations: Caribbean Immigrants and the Harlem Community, 1900–1930 (Bloomington, 1996), 142.
13
Ellsworth “Bumpy” Johnson was key in negotiating a degree of autonomy from mob control. See White et
al., Playing the Numbers, 238. William Foote Whyte, Street Corner Society: The Social Structure of an Italian Slum
(1943; Chicago, 1955), 112.
Racial Politics, Illegal Gambling, and Government Lotteries
77
A Chicago woman making a policy bet in 1950. Voting instructions appear on the
wall because the location was used as a polling place in the next day’s primary elections. The policy game was deeply intertwined with black machine politics in Chicago. Photo by Francis Miller. Courtesy Getty Images, the LIFE Picture Collection.
echoed many of the earlier forms of opposition to white incursions. This struggle also
built on the tradition of the Don’t Buy Where You Can’t Work campaigns so prominent
in 1930s black activism in New York and Chicago. Black political leaders in both cities
strenuously attempted to restore black control of daily gambling and to wrest the game
from the tentacles of the mob and corrupt police, while simultaneously trying to fend
off state lotteries. Their fights exemplified what Baldwin calls an “overt desire for autonomous black cultural production through economic control.”14
When Congressman Powell leveled his charges of corruption and bias against the New
York City police in 1960, he pushed numbers gambling into plain view, transforming the
issue into an overtly political matter to be contested within the public discourse and the
arena of public policy. In the wake of Powell’s accusations, the pioneering black journalist Ted Poston and a team of reporters from the New York Post (then a respected paper)
put together a ten-part series on the numbers game and the related system of police corruption. The paper detailed the employment structure of a typical numbers organization,
with the “banker” at the head, with the “controller” acting as something of a “branch
manager,” with “adders” working as the back office bureaucracy, and with tens of thou14
Baldwin, Chicago’s New Negroes, 47, 7. White et al., Playing the Numbers, 249.
78
The Journal of American History
June 2014
sands of “runners” working on the street taking bets. Most importantly, the articles
outlined the elaborate police protection scheme known as “the pad.”
The New York Post identified a pattern of black bankers being reduced to controllers because they could not afford to keep up with the increased costs of the pad.
As controllers, the former black bankers worked for the East Harlem mob. A black
former banker told the New York Post, “I don’t think that there has been a Negro
banker—what few there are of us left—on a full pad for the last few years.” Meanwhile, the lower echelon workers in the numbers business remained highly vulnerable
out on the street. A black lawyer speaking to the New York Post pointed out that 82
percent of the over four thousand people arrested for numbers gambling in Harlem
in 1959 were black. These thousands of people were street-level numbers workers,
for the most part runners and lookouts. The lawyer explained, “This means that this
community is being criminalized. Once a person is arrested for numbers, it is impossible to receive private employment any more.”15
Despite his public feuding with Congressman Powell, Commissioner Kennedy
had, in fact, taken the gambling corruption issue seriously throughout his career.
More intense than his conflicts with Powell were his feuds with his own rank and
file of the department. He insisted on “by the book” policing, while officers on the
street jealously guarded their prerogatives. Kennedy’s successor, Michael J. Murphy,
also attempted reform, establishing a Gambling Enforcement and Inspection Review
Board, but despite such efforts the problems remained. By 1964 Murphy arrived at
the conclusion that public demand for numbers-play must be undercut.16
The persistence of corruption coupled with several cases of police violence brought
into sharp focus the tensions between police and New York’s poorest communities.
With the killing of fifteen-year-old James Powell by Lt. Thomas Gilligan in July 1964,
the hostility between the Harlem community and the police erupted into a substantial disturbance remembered as the “Harlem riot.” While the shooting of Powell was
certainly the immediate cause of the riot, the role of long-standing grievances relating
to corruption should not be underestimated. In the aftermath of the riots, Barbara
Benson, a black woman from Brooklyn captured the sentiment of distrust toward
police in a letter to the New York Times titled, “Why Harlem Negroes Riot.” Benson
wrote, “A ghetto police force is a force in league with all of the underworld, a bribed
force.” Whether serving illegal evictions on behalf of slumlords or working in coordination with white mobsters to control the numbers business, the police were perceived to be enforcing a political economy of exploitation by outsiders.17
While the rioting in the summer of 1964 showcased the frustrations of black
New Yorkers in upper Manhattan and in central Brooklyn, the episode crystallized a
growing fear held by elite New Yorkers that a general erosion of order was underway.
While editorialists and politicians denounced the rioters, the issue of police behav15
Ted Poston et al., “Inside the Policy Racket,” New York Post, March 1, 1960, p. 3; Ted Poston et al., “Policy:
The Harlem Story,” ibid., March 7, 1960, p. 25.
16
“Taciturn Detective: John Francis Walsh,” New York Times, Jan. 21, 1961, p. 5; “Murphy Summons 175 Aides
to Talk on Gambling Law,” ibid., April 15, 1961, p. 23; “Attitude of the Public Called Crux of Battle,” ibid., June
26, 1964, p. 17.
17
Barbara Benson, “Why Harlem Negroes Riot,” ibid., July 27, 1964, p. 32. For a work that points out that
the basic resentments toward police that fed the 1964 Harlem riot had been equally “endemic” leading up to the
1935 Harlem riot, see Janet L. Abu-Lughod, Race, Space, and Riots in Chicago, New York, and Los Angeles (New
York, 2007), 180.
Racial Politics, Illegal Gambling, and Government Lotteries
79
ior had also become increasingly difficult to ignore. The status quo of tolerating the
pay envelopes of the “pad” in exchange for a maintenance of order was disappearing
in the mid-1960s. While the need to confront brutality by police was muddled and
undercut by racism and fear of crime, the need to confront economic corruption by
police emerged as a much more straightforward issue. The legitimacy of the police
force, and thus the legitimacy of the government itself, hung in the balance. As gambling corruption repeatedly proved intractable, reformers in the mid-1960s began
to look at the law itself as part of the problem. In the wake of a series of revelations
by Manhattan district attorney Frank Hogan of yet more corruption related to gambling, the New York Times editorial board adopted the posture that “the real corrupter
is not gambling per se but the gambling laws themselves.”18
While the debate over gambling practices in New York was driven largely by local
considerations, the discussion was also shaped by an emerging body of thought on
the concept of the victimless crime. During the 1960s and into the 1970s a number
of legal scholars, sociologists, and criminologists began to examine certain categories
of illegal behavior in the context of personal freedom, sovereign authority, and social
well-being. Scholars of the victimless crime, among them Edwin M. Schur, Thomas
C. Schelling, Norval Morris, and Gordon J. Hawkins, forced a reconsideration of the
use of criminal sanction. The standard menu of victimless crimes consisted of prostitution, public drunkenness, drug use, gambling, and abortion. Supporters of the decriminalization of these behaviors argued that their illegality produced a set of negative consequences that outweighed the problems caused by the behaviors themselves.
The theory of decriminalization as a method to undercut crime was for the most part
rejected in political circles. Gambling, however, proved to be the outlier. Political actors who saw liberalization of gambling laws as a potential solution to problems of
police corruption fused their interests with politicians seeking to raise revenue without nominally raising taxes as northeastern states began to experiment with government lotteries.19
The first legal lottery in twentieth-century America was instituted in New Hampshire in 1963.20 New York quickly followed suit, and the development of the lottery
there drove events nationwide. As the New York lottery scheme went from idea to reality, Americans came to consider and reconsider the proper function of government,
the relationship between federal and state authority, the nature of taxation, the social
obligations attendant to education, the proper function of the banking system, the
types of materials to be broadcast over the airways, the appropriate use of the mails,
the use of money from welfare and social security, and the widespread impulse to get
rich quick. The intensity of the controversy and the level of confusion produced by
the state’s entry into the lottery business highlights the fact that lottery adoption was
more than a simple revenue measure attached to an amusing game. The adoption of
a state-run lottery forced the repositioning of a broad array of institutions and recast
the dynamics of citizenship.
“Scandal in the Police Force,” New York Times, June 27, 1964, p. 24.
Edwin M. Schur, Crimes without Victims: Deviant Behavior and Public Policy (Englewood Cliffs, 1965); Thomas C. Schelling, “Economic Analysis and Organized Crime,” in The Crime Establishment: Organized Crime and
American Society, ed. John E. Conklin (Englewood Cliffs, 1973), 75–97; Norval Morris and Gordon J. Hawkins,
The Honest Politician’s Guide to Crime Control (Chicago, 1972).
20
Clotfelter and Cook, Selling Hope, 13.
18
19
80
The Journal of American History
June 2014
A Philadelphia police sergeant stares at a pile of paperwork seized during a raid of a numbers spot in 1966. Photo from the Philadelphia Evening Bulletin. Courtesy Special Collections
Research Center, Temple University Libraries.
In March 1965, a lottery bill was offered in both houses of the New York State Legislature with projections of $250 million annually for education. Although the bill passed
the state senate by a vote of 35 to 18, opposition was passionate. Senator Samuel Greenberg of Brooklyn lamented, “passage of this bill means we are confessing we have reached
a point in this state where we cannot provide for our needs by legitimate methods.” Supporters of the bill dismissed the moralizing and argued that the state had reached “the
limit of existing forms of taxation.” The lottery received even stronger support in the state
assembly where it passed 116–18, with the opposition made up of two Democrats and
sixteen Republicans. The bill itself was in the form of a constitutional amendment, and
thus required its passage by two separately elected legislatures and then its approval by
the voters in a public referendum. Going forward, the lottery amendment would have to
be approved all over again during the legislative session of the following year, and then it
would appear on the November 1966 ballot for a public vote.21
As the New York lottery bill was coming up for its second round of consideration, the
New York Daily News, the city’s most popular newspaper, urged legislators to support the
project. The editorial board of the New York Times, meanwhile, pushed the lottery as an
21
John Sibley, “Bill Authorizing a Lottery Approved by State Senate,” New York Times, June 15, 1965, pp. 1, 33;
Sydney H. Schanberg, “Albany Trying Again on Lottery,” ibid., Jan. 30, 1966, p. E4. On the $250 million figure,
see “Democrats Planning Poll on Proposed State Lottery,” ibid., April 5, 1965, p. 45. On the vote in the state assembly, see Paul L. Montgomery, “Proposal for Lottery Seems to Be a Winner,” ibid., Nov. 9, 1966, p. 1; and John
Sibley, “Assembly Passes Bill for Lottery to Aid Education,” ibid., June 17, 1975, p. 1.
Racial Politics, Illegal Gambling, and Government Lotteries
81
anticrime measure. The bill passed both houses in February 1966 despite strenuous opposition from many upstate Republicans uncomfortable with the moral implications of
legal gambling.22
The period from February until the public referendum in November allowed plenty of
time for both sides to mobilize. The fifteen-member State Board of Regents, the highest
body governing education in the state, joined the opposition, declaring in a unanimous
statement that “the obligation of the state to provide adequate funds for education is so
fundamental that it should not be discharged, even in part, by the encouragement of public participation in a state lottery.” In general, the opposition was centered in the education community and in Protestant churches. Yet their efforts proved insufficient, and in
early November, New York voters approved the lottery measure by a 3–2 margin.23
Even before the first ticket was sold, however, the legislature undercut the professed
goal of supporting education. Legislators, in anticipation of lottery revenue, began to reallocate education funds to other parts of the budget. Lottery gambling would therefore
in no way augment state aid to education. More gambling in a given year would not mean
more money for education, rather it would mean more of the education budget could be
allocated elsewhere. This tactic has proven to be a long-standing problem in the conduct
of New York’s lottery, with lottery money there historically functioning as a substitute for,
rather than as a supplement to, education funds.24
Meanwhile, as institutions struggled to position themselves in relation to the new
lottery, confusion prevailed. The New York City Welfare Department announced that
should any of the 656,000 welfare clients win a sizeable prize they would have to use it
toward repaying what they had received in welfare payments. Tickets were to be sold in
banks and hotels, yet many eligible locations chose not to participate, as St. John’s Episcopal Church in Manhattan organized a boycott of participating banks. Rather than report on the confusion, the news media was caught up in it. Broadcast news outlets were
uncertain how they should approach the lottery. Federal criminal law threatened fines and
even imprisonment for “the broadcasting of, any advertisement of or information concerning any lottery.” The National Broadcasting Company and the American Broadcasting Company were deeply cautious and adopted “a virtual blackout on news about the
state lottery.” The apprehension within the news media both reflected and reinforced the
ambiguous status of gambling as it inched across the line from illegal to legal.25
22
“Vote Right on Lottery,” New York Daily News, Jan. 25, 1966, p. 29; “Legalizing the Lottery,” New York Times,
Jan. 27, 1966, p. 32; “N.Y. Assembly Passes State Lottery Bill,” Chicago Tribune, Feb. 9, 1966, p. 18.
23
Richard L. Madden, “Regents Opposed to Lottery Plan,” New York Times, Aug. 27, 1966, p. 25; Robert Hummerstone, “State Lottery Is Approved,” New York Newsday, Nov. 9, 1966, p. 7; Frank J. Prial, “Lottery’s Muddy
Track,” Wall Street Journal, Dec. 28, 1966, p. 22.
24
“Real Aid for Education,” New York Times, Feb. 15, 1967, p. 43. Substituting rather than supplementing aid
to education has been the norm among state lotteries nominally attached to education. In the words of the New
York State comptroller writing in 1998, “When the lottery was approved . . . the public was promised that it would
support education. Implied in that promise was that the lottery would add to state aid, rather than merely replace
it. . . . The truth is that the Legislature and Governor decide how much state aid will go to local schools.” The comptroller calls the attachment of lottery funds to the education budget “an artificial accounting device.” The comptroller points to the 1991–1992 budget, which anticipated a $10 million increase in lottery sales, while cutting the education budget by $891 million, and the 1996–1997 executive budget, which anticipated an increase of $69 million
in lottery sales, while simultaneously cutting the school aid budget by $117 million, as egregious examples. H. Carl
McCall, The New York Lottery: Role in Financing Education (New York, 1998), 5–7.
25
“Lottery Winners on N.Y. Relief Must Repay City,” Washington Post, May 26, 1967, p. A14; “Minister Urges
a Boycott of Banks Aiding Lottery,” New York Times, May 22, 1967, p. 35; Robert E. Dallos, “News Media Divided
on How to Handle Lottery,” ibid., May 24, 1967, p. 58.
82
The Journal of American History
June 2014
First-day lottery sales occurred in something of a frenzied atmosphere. Lines were long
at the Waldorf Astoria, the New York Hilton, and the Americana, where patrons lined
up thirty deep in the lobby. Mayor John Lindsay purchased a ticket, but Gov. Nelson
Rockefeller did not. The only hitch in the day came “at a hearing in Washington, [D.C.,]
where committee support was indicated for a bill that would bar virtually all banks in
New York from selling lottery tickets.” The bill passed the U.S. House of Representatives
in mid-July by a vote of 271–111. Bronx representative Paul A. Fina called the new law
“a product of hillbilly morality.” The bill’s sponsor, Rep. Wright Patman of Texas, argued
that “banks, which should promote thrift, should not be used to promote gambling.” In
the U.S. Senate, supporters of the bill expressed worry about the nation’s moral fabric
and contended that patrons who went to banks “to cash their Social Security or welfare
checks were subjected to a ‘come-on’ to buy lottery tickets at the same tellers’ windows.”
The bill passed by a vote of 56–17, and President Lyndon B. Johnson signed it into law
on December 15, 1967.26
Back in New York, when the figures were calculated, the lottery’s revenue proved to be
disappointing. To meet the initial projections, the lottery would have needed to bring in
about $30 million a month, but in its first month it made less than $6.5 million. A reporter for the Wall Street Journal posed this rhetorical exchange: “Can a rich, respectable
state like New York play the betting game as well as a local numbers operator? The answer
seems to be, at least right now, not by a long shot.” The final tally for the New York State
Lottery’s first year of operation was unimpressive. The gross sales amounted to $62.4 million, a figure approximately $300 million short of predictions. The following year, 1969,
was no better. It was difficult to call the state’s lottery anything but a failure. The revenue
had fallen short, problems of educational funding persisted, illegal gambling remained
entirely unaffected by the new game, and thus police corruption continued unabated.27
Lottery proponents in New York State had misread the situation by assuming that all
illegal gambling activity would be converted into state lottery gambling when the new legal game arrived. Yet, they learned, the two types of gambling were not interchangeable.
The new lottery was significantly different from the gambling practices most enjoyed by
New York City residents. In September 1967 the New York Amsterdam News spoke to a
number of black New Yorkers to gather opinions on the reasons for the lottery’s weak
performance. A beauty shop operator offered the simple advice that “Maybe New York
State should study the numbers.” Any hope for success would clearly require a more direct
confrontation with the old-fashioned illegal numbers game.28
Illegal numbers play in the black and Hispanic communities of New York in 1970 was
as strong as it had ever been. The popular illegal numbers game represented a particular
26
Sydney H. Schanberg, “Lottery Players Rush for Tickets,” New York Times, June 2, 1967, pp. 1, 44; Richard Dougherty, “Lottery Tickets Sales Open in New York to Brisk Business,” Los Angeles Times, June 2, 1967, p. 1;
“House Bars Bank Role in Lottery,” Washington Post, July 14, 1967, p. A2; Richard L. Madden, “Senate Restricts
Banks in Lottery,” New York Times, Nov. 14, 1967, pp. 1, 36; “Senate Bans Lottery Ticket Sale in Banks,” Los Angeles Times, Nov. 14, 1967, p. 9; “Bank Lottery Sales to Be Barred April 1,” New York Times, Dec. 16, 1967, p. 55.
27
James Gardner, “Sagging Lottery and Moral Unease,” Wall Street Journal, July 17, 1967, p. 12. “Lottery Ends
Year below Predictions,” New York Times, June 15, 1968, p. 58; “State Lottery at New Low,” ibid., Feb. 17, 1970,
p. 35.
28
“Hope and the Lottery,” New York Amsterdam News, Sept. 2, 1967, p. 17.
Racial Politics, Illegal Gambling, and Government Lotteries
83
form, and this form had a long-established and loyal customer base. The ability to choose
a favorite number allowed gamblers to make use of their children’s birthdays, their favorite ballplayer’s batting average, and, above all else, the subject matter of their dreams. The
sequential raffle-style tickets of the New York State Lottery offered no such possibilities.
When the state came to realize its miscalculation, officials began a decade-long effort
to recalibrate its gambling offerings to attract the urban numbers player. Unsurprisingly, their efforts to enter the numbers market were met with substantial opposition from
black and Latino politicians and activists. The 1970s was a period of intense wrangling
over the numbers, with black leaders pushing to bring numbers gambling under community control and state lottery proponents attempting to bring the state into the numbers business. The principal goals for black leaders in this fight were to keep gambling
revenue circulating locally, to legitimize the excluded numbers workers, and to preserve
the large employment base provided by the illegal numbers game. The main goal for lottery proponents was to capture revenue for the state, through what amounted to regressive taxation.29
No figure fought for community control of the numbers with more vigor than Harlem activist James Lawson. A longtime presence in Harlem and a follower of Marcus
Garvey, Lawson made a name for himself during the 1930s as the business manager for
the Harlem Labor Union and as a prominent advocate for black employment in New
York’s breweries during the 1940s and 1950s. Combative, uncompromising, and known
for employing strong-arm tactics, Lawson headed several black-nationalist organizations
during his career, and maintained a focus on jobs and economic empowerment for black
Americans. He was featured prominently in the 1959 television documentary The Hate
That Hate Produced, and controversy was never far from his name. During the mid-1960s
Lawson founded the Harlem Council for Economic Development with the declared goal
of helping blacks “gain control of business.” For Lawson no business was more important
than numbers gambling.30
Shortly after the 1964 Harlem riot, Lawson told a crowd of one thousand gathered
on 125th Street that blacks must “control all the businesses in the black community.” He
declared “that the end of August was the ‘absolute deadline for the Mafia to get the hell
out of the numbers and narcotics rackets in Harlem.’” His threat was bold and how he
intended to make it a reality was unclear, yet it appears that the atmosphere of increasing violence in Harlem was making it more difficult for white gangsters to assert uniform
control.31
29
Lotteries can be described as a regressive tax because the tendency to play is higher among low-income groups
and because a single lottery play represents a greater portion of a low-income bettor’s expendable resources. As
one article puts it, lotteries “provide a mechanism for shifting the funding burden for state services from higher
to lower income citizens.” Robert Martin and Bruce Yandle, “State Lotteries as Duopoly Transfer Mechanisms,”
Public Choice, 64 (no. 3, 1990), 253–64, esp. 263. See also Brent Kramer, “The New York State Lottery: A Regressive Tax,” State Tax Notes, March 29, 2010, http://fiscalpolicy.org/wp-content/uploads/2012/04/StateTaxNotes_
LotteryRegressive.pdf; and Charles T. Clotfelter and Philip J. Cook, “Implicit Taxation in Lottery Finance,” National Tax Journal, 40 (Dec. 1987), 533–46.
30
According to Martha Biondi, James R. Lawson’s nationalist outlook rejected “the social welfare policies of urban liberalism,” focusing instead on “self-reliance, patriarchy, and ethnic solidarity.” See Martha K. Biondi, To Stand
and Fight: The Struggle for Civil Rights in Postwar New York City (Cambridge, Mass., 2003), 257. The Hate That Hate
Produced, prod. Mike Wallace and Louis Lomax (5 parts, wnta-tv, July 13–17, 1959). James R. Lawson, “Nationalist Program,” New York Amsterdam News, Aug. 8, 1964, p. 19.
31
“Unity Pleas Made at Harlem Rally,” New York Times, Aug. 2, 1964, p. 56; Paul L. Montgomery, “Speaker at
Harlem Rally Seized,” ibid., Aug. 9, 1964, p. 65.
The Journal of American History
84
June 2014
As the numbers structure of the city began to fragment—with the police under heightened scrutiny and with black illegal operators resisting control by white organized crime—
parties on both sides of the law scrambled to shape a new framework for gambling. Initially, black political leaders did not see the lottery as a threat to the numbers economy.
In fact, shortly after the lottery legislation passed, thirty-six-year-old Harlem assemblyman Charles Rangel attempted to capitalize on the impulse toward liberalization of the
gambling laws by proposing legislation to create a legal, community-controlled numbers
game. This type of optimism was not confined to New York, with a black legislator representing Philadelphia in the Pennsylvania General Assembly proposing a bill to legalize
the numbers within the city limits. Both Rangel’s bill and the Philadelphia bill failed, but
expectations were high that black communities in New York and elsewhere would soon
be able to bring legitimacy to their favored gambling pastime.32
Optimism quickly gave way to defensiveness after the New York City government attempted to gain control over the numbers revenue stream beginning in 1971 under the
auspices of the newly created New York City Off-Track Betting Corporation (otb). Before the public benefit corporation even took in its first horse racing bet, its ambitious
head, Howard Samuels, attended a meeting at the Harlem Young Men’s Christian Association (ymca) to discuss the possibility of otb getting into the numbers game. Community residents pushed back and defended the numbers as a local institution and compared the game to Catholics playing bingo. At the head of the opposition was Livingstone
L. Wingate, the executive director of the Urban League, who argued that the numbers
should be controlled by the community rather than by the government.33
The hostile reception that Samuels received at the Harlem ymca revealed the inherent
tension between elite liberals and poor black communities. At the meeting Samuels asserted that blacks were being victimized by organized crime through the numbers game.
Wingate responded that it should be up to blacks, not outsiders, to purge organized crime
from their communities. Wingate’s assertion characterized the political climate of the
time, as blacks and Latinos in the urban North increasingly demanded control over key
issues in their communities such as education, police protection, drug treatment, health
services, parks, and government construction. A month after the meeting in Harlem, two
black state legislators representing Brooklyn introduced a constitutional amendment in
Albany to “legalize the numbers under community control.” The proposal for community-controlled numbers involved local numbers boards to operate the parlors and provide revenue for community needs such as additional policing and drug treatment. The
proposal was blocked by a triangular dynamic in the state legislature, which featured
gambling expansionists (both liberal and conservative) pressing for state control, political
representatives of black and Hispanic communities demanding local control, and rural
social conservatives opposing any gambling expansion. The resulting deadlock prevented
all initiatives on legalization from advancing in the early 1970s.34
While legislation was stalled, changes in policing allowed black numbers operators
to free themselves from domination by the mob and the police. In 1970, as yet another
“North Phila. Legislator Urges Legalized Numbers Game,” Philadelphia Tribune, Jan. 18, 1966, p. 20.
Barbara Campbell, “Wingate Defends Harlem Numbers,” New York Times, Jan. 21, 1971, p. 70.
On schools, see Jerald E. Podair, The Strike That Changed New York: Blacks, Whites, and the Ocean Hill–
Brownsville Crisis (New Haven, 2002). On the construction industry, see David Goldberg and Trevor Griffey, eds.,
Black Power at Work: Community Control, Affirmative Action, and the Construction Industry (Ithaca, 2010). Thomas
A. Johnson, “Numbers Called Harlem’s Balm,” New York Times, March 1, 1971, p. 1.
32
33
34
Racial Politics, Illegal Gambling, and Government Lotteries
85
police corruption scandal unfolded in public view, the newly appointed police commissioner Patrick V. Murphy (the fifth police commissioner with that surname during the
twentieth century) implemented an unofficial moratorium on low-level gambling arrests,
thus depriving crooked cops of their principal tool for shaking down runners. His moratorium was coupled with the pursuit of corruption within the ranks, and the policies he
initiated began the process of destroying the “pad” system that had been a feature of New
York policing for so many decades. The initial scandal that brought Patrick Murphy to
the job also resulted in the creation of the Knapp Commission to investigate police corruption. The commission’s conclusion, that “the criminal laws against gambling should be
repealed,” became the backdrop for the gambling debates of the era.35
As the legal status of numbers gambling in New York appeared poised to change, and
as police corruption and mob extortion receded in the face of public scrutiny, Harlem
activist James Lawson began to focus on securing amnesty for previous numbers-related
crimes so that the thousands of numbers workers with criminal records would not be excluded in any new legal framework. In early 1972 he announced the formation of the
New York Committee for Amnesty and Community Control of Policy (accop). Lawson
recognized that the biggest obstacle to community control going forward would come
from emerging lotteries. While gridlock in the New York State Legislature prevented the
New York State Lottery from implementing a numbers game, in New Jersey the situation
was different. Lawson warned his brethren in Newark that the newly instituted New Jersey Lottery would soon attempt to undercut their numbers operations.36
The New Jersey Lottery was approved by a voter referendum in 1969 and began sales
in late 1970. The enabling legislation was particularly flexible, giving the new lottery the
authority to respond to market conditions. Although New Jersey could not initially design a method of allowing bettors to choose their own numbers, officials met with some
success selling cheap tickets and daily play. With the flexible law of New Jersey as a model,
Connecticut, Pennsylvania, Massachusetts, and Michigan began sales in 1972, followed
by Maryland in 1973. Yet all of the new lotteries failed to tap the revenue stream flowing in the illegal numbers game. As New Jersey Lottery director Ralph Batch testified to
a commission in 1973, “Black people in New Jersey, in the inner city, are accustomed to
numbers. It is part of a way of life.” He went on to explain that black New Jersey residents
had supported the creation of a state lottery at a far lower rate than whites and that they
were participating in the lottery at a substantially lower rate than whites. He concluded,
“The game we offer is not the game they want to play.” According to Batch, the New Jersey lottery would need to replicate the numbers “to penetrate and to be effective in the
inner city.” He noted that such a move “may not be too far in the offing.”37
While the New Jersey Lottery attempted to chart a path to a state-operated numbers
game, in New York, Washington, D.C., and Illinois, black political leaders as well as liberal groups that embraced the ethos of community control began detailing proposals for
legal numbers. Because the issue of state control was set against that of local control, the
35
The Knapp Commission Report on Police Corruption (New York, 1973), 18, 74–83. The report was submitted
to Mayor John V. Lindsay on December 26, 1972. Interestingly, the report explicitly noted a trend of increasing
autonomy for black and Hispanic numbers operations. See ibid., 79.
36
James Lawson, “Amnesty Is Answer to Policy Betting,” New York Amsterdam News, Jan. 29, 1972, p. A5.
37
Washington Lawyers’ Committee for Civil Rights under Law, Legalized Numbers in Washington: Implications
with Respect to Law Enforcement, Civil Rights, and Control by the Community (Washington, 1973), d-24, d-25, d-15.
86
The Journal of American History
June 2014
priority of revenue was set against the priority of preserving jobs. In New York, black leaders and elected officials, the Fund for the City of New York (an arm of the Ford Foundation, which was heavily involved in designing the plan for community control in New
York’s education system), and even the Off-Track Betting Corporation, which had been
influenced by its initial rebuke from black leaders, all put forward proposals that emphasized jobs and high prize levels to keep money circulating in the communities where bets
originated. The black leaders’ and elected officials’ proposals and the Fund for the City
of New York proposal envisioned licensing local contractors to operate the game, with
the Fund for the City of New York placing more emphasis on prize levels and black legislators placing more emphasis on salaries. The otb envisioned hiring numbers runners
directly, promising to keep 95 percent of revenue in the community with only 5 percent
given over to operating costs. In contrast, the lottery proposals for legal numbers games
that emerged in New York, New Jersey, and elsewhere typically involved an automated
game (thus requiring no runners) with a 50–55 percent return in prizes, with another 5
percent for store owners who sold the game, and the remaining 40–45 percent going to
the state.38
In Washington, D.C., the Washington Lawyers’ Committee for Civil Rights published Legalized Numbers in Washington: Implications with Respect to Law Enforcement,
Civil Rights, and Control by the Community in 1973. The project was driven by the fact
that “although black people constitute only 12 percent of the nation’s population, over 70
percent of the persons arrested on gambling charges, nationwide, are black.” Ultimately,
the proposal from the Washington Lawyers’ Committee sought to preserve the employment of the roughly two thousand numbers runners working in the District of Columbia,
while simultaneously minimizing the further spread of gambling. Yet the initiative predated the 1973 Home Rule Act, and the inexperienced political class that began to govern
the District of Columbia in 1974 and 1975 remained subordinated to Congress and was
in no position to break new ground in legalizing the numbers.39
In Illinois the push to legalize daily gambling under local control was driven by Lewis
Caldwell, representing the 24th District in the state assembly. Caldwell voted in favor of
the establishment of the Illinois State Lottery, embracing the logic that liberalization of
the state’s gambling laws could open the door to a legal policy game. In late 1973, shortly
after the lottery vote, Caldwell and Assemblyman Harold Washington (who later became
Chicago’s first black mayor), sponsored and successfully passed legislation to fund a study
of the feasibility of a community-controlled policy game. The next year, Caldwell opened
the hearings of the Policy-Numbers Game Study Committee by stating, “As a professional
social worker for sixteen years, dating from 1933, I learned that policy was a major factor
38
On the proposals of the black leaders and elected officials, see Steve Cady, “New Game in Harlem: otb vs. the
Numbers,” New York Times, Oct. 4, 1971, p. 55; Averta Moore, “Legal Numbers Gain in Jersey as N.Y. Moves toward Own Game,” Afro-American, June 28, 1975, p. 8; Thomas A. Johnson, “Numbers Called Harlem’s Balm,” New
York Times, March 1, 1971, p. 1; and James Lawson, “Amnesty Is Answer to Policy Betting,” New York Amsterdam
News, Jan. 29, 1972, p. A5. On the proposal of the Fund for the City of New York, see Fund for the City of New
York, Legal Gambling in New York, esp. 4–6. On the proposal of the Off-Track Betting Corporation, see Staff of the
City of New York City Off-Track Betting Corporation, A Plan to Operate a Legal Numbers Game Now (New York,
1973). On the trend toward automated games, see Moore, “Legal Numbers Gain in Jersey as N.Y. Moves toward
Own Game”; and “New York Cuts Its Odds in a New Numbers Game,” Wall Street Journal, Sept. 3, 1980, p. 15.
39
Washington Lawyers’ Committee for Civil Rights under Law, Legalized Numbers in Washington, 1, 4. Home
Rule Act, 87 Stat. 777 (1973). On early District of Columbia elected officials, see Burt Solomon, The Washington
Century: Three Families and the Shaping of the Nation’s Capital (New York, 2004), 260–62.
Racial Politics, Illegal Gambling, and Government Lotteries
87
in the economic and social life of Black communities in the city,” and, he asserted, “the
time has come that policy should be legalized.” After holding hearings around the state,
Caldwell and Washington issued their report to the legislature in 1975 and submitted a
bill to legalize policy gambling under local control. Debates over gambling at the state
and local levels were quickly overshadowed by the anticipation that the national government would soon articulate a coherent and consistent national policy, as the Commission on the Review of the National Policy toward Gambling wrapped up its two years of
work.40
That commission was established by the Organized Crime Control Act of 1970 and
charged with developing recommendations for the states to follow as they formulated
gambling policies. Between April 3, 1974, and September 23, 1976, the commission
conducted thirty-seven days of hearings, taking testimony from 265 witnesses, including
law enforcement officials, lottery directors, illegal gamblers, and clergy. On November
19, 1974, representatives from each of the nation’s thirteen lotteries came to Washington, D.C., to testify. Of great importance to these lottery representatives were the federal
restrictions on the use of the mails and the broadcast airwaves for communications regarding lotteries. In September of that year, the U.S. attorney general had made clear his
intent to act against offending states within ninety days, unless Congress took action.41
The lottery men spoke with a singular voice as they demanded “flexibility in the use of
mails, radio, and television,” and urged Congress “to allow the lotteries to conduct their
business as any other bona fide business may do.” A lottery “should have the same marketing opportunities as any other business,” they argued. The lottery representatives also
pushed the repeal of “stultifying” and “archaic” laws. Anything less would “only work to
the direct benefit of the illegal game.” In sum, they demanded that, “all present federal
statutes that impinge in any way upon the freedom of state-created lotteries to operate as
autonomous business enterprises be abrogated.”42
With the demands of supporters that lotteries be treated as a business, already, in 1974,
the walls between public function and private enterprise were collapsing, and the nation’s
lottery directors were of like mind and virtually unanimous in their declarations of the
need to expand. Congress acted in time to save the lotteries from prosecution by the attorney general, and in January 1975 Gerald Ford signed a law allowing state-run lotteries
to use the federal mails as well as radio and television to disseminate information and to
advertise.43
The Commission on the Review of the National Policy toward Gambling’s final report,
Gambling in America, declared that enforcement of the nation’s current gambling laws
was truly and totally “impossible.” The rest of the report read like a wish list written by
40
The Policy-Numbers Game Study Committee (Springfield, 1975), 1. State of Illinois, transcript of floor debate,
“House of Representatives, Seventy-Eighth General Assembly, Fiftieth Legislative Day, May 8, 1973.” For the Lewis
Caldwell quotation, see Policy-Numbers Game Study Committee, unpaginated introduction.
41
Commission on the Review of the National Policy toward Gambling, Gambling in America: Appendix 3, Summaries of Commission Hearings (Washington, 1976), viii. Organized Crime Control Act, 84 Stat. 922 (1970). On
the U.S. attorney general’s intent, see Warren Weaver Jr., “Saxbe Threatens Suit to Shut Down State Lotteries,” New
York Times, Aug. 31, 1974, p. 1.
42
Commission on the Review of the National Policy toward Gambling, Gambling in America: Appendix 3,
30–38.
43
Clotfelter and Cook describe a long-term trend in which private lottery contractors became “an exceedingly
influential player in the operation of state lottery agencies.” See Clotfelter and Cook, Selling Hope, 183. “Lottery
News Bill Signed,” New York Times, Jan. 4, 1975, p. 51.
88
The Journal of American History
June 2014
Illinois State representatives Zeke Giorgi, Lewis Caldwell, Harold Washington, and Project Coordinator Margaret Eldridge at a 1974 hearing of the Policy-Numbers Game Study
Committee. Courtesy Illinois House of Representatives.
the nation’s state lottery directors. The report privileged states’ rights over federal regulation of interstate commerce, as the commission “determined that gambling policy is the
proper responsibility of the government entity closest to the lives of the citizens—the
State.” Going forward, the commission urged, “the Federal Government, in the exercise
of its regulatory and tax powers, should not unnecessarily impair State efforts to compete
with illegal gambling operations.” The report defined the emergence of lotteries as “State
entrepreneurship” that should be accepted and encouraged as “an anticrime measure of
assistance to law enforcement.” As for the numbers game itself, the report pointed to the
great potential for state expansion into the field, with encouraging experiments already
underway in New Jersey and Massachusetts.44
The remaining tensions between state and local authorities over lottery expansion and
the fate of numbers gambling would be fought within the individual states. Michigan,
Maryland, and Pennsylvania acted quickly, with all three launching daily numbers games
in 1976 and 1977. The flexible lottery laws of these states allowed for the implementation
of a numbers game without new legislation, and thus opportunities for resistance were
limited. Nonetheless, many black political leaders in those states worked within existing
constraints to secure the benefits of taxed gambling for their constituents and to shield
them from the state’s effort to use the popularity of gambling in urban communities as a
vehicle for revenue capture. The black leaders’ efforts met with mixed success. In Pennsylvania, lottery money has historically funded programs for senior citizens, and while most
44
Commission on the Review of the National Policy toward Gambling, Gambling in America: Final Report
(Washington, 1976), ix, 1, 6, 15, 143.
Racial Politics, Illegal Gambling, and Government Lotteries
89
state lotteries function to defray the cost of a mandated commitment such as public education, Pennsylvania’s lottery stands out as providing services that might not otherwise exist. Black legislators in the state, notably the vocal advocate on behalf of seniors K. Leroy
Irvis, worked to expand lottery-funded programs beyond the original goal of “property
tax relief ” for seniors, to include rent rebates, free public transit, and other services to
reach poor senior citizens who did not fit the category of property owners. Black legislators in Michigan, in contrast, could do little beyond complain of the overconcentration
of lottery terminals in the Detroit area.45
In Maryland, the most prominent black numbers banker in the history of Baltimore
collaborated with the lottery. William “Little Willie” Adams worked directly with the
Maryland Lottery from its arrival. He was hired by the lottery as a consultant in 1973. Although he was a “race man” through and through, Adams was also a shrewd businessman
and an inside political player. By 1973, with substantial influence in politics and with
prominent business ventures such as Parks Sausages, Super Pride Markets, and a development company that built a number of federally subsidized housing projects, he had long
since crossed the threshold to legitimacy. He clearly perceived that he had more to gain in
welcoming the lottery than he did in reviving a public association with the illegal numbers. When the Maryland Lottery began its numbers game in 1976, his bars and liquor
stores were among the earliest locations to receive lottery terminals for the new game. As
the gambling framework in the North was reordered in the 1970s, Little Willie was one
of the few black political figures positioned to access the profits of taxed gambling, and
thus he pursued an inside strategy. Adams, perhaps the most politically and economically
successful black numbers banker in the history of the country, died a rich man in 2011 at
ninety-seven years old and claiming to have never spent a night in jail.46
Yet Adams was not the only influential figure in Maryland black politics. A group associated with Congressman Parren Mitchell that was oriented more toward social activism, pushed for higher payouts from the lottery on behalf of the betting public. A black
state legislator, who referred to the new lottery as “a shackle around the necks of the poor,”
introduced a bill in 1979 to raise the prize in the state numbers game to $700 on a $1
bet. The state’s lottery director testified that such a payout would essentially destroy the
revenue purpose of the lottery, and the bill was defeated. Yet the political pressure led the
Maryland lottery to increase its payout from $500 to $550 on a $1 bet.47
In Ohio the implementation of numbers was impeded by the stumbles of the scandalridden state lottery, and thus black Ohioans were afforded a brief opportunity to resist
state take-over of the game. The state’s lottery was a weak performer, and its failure was
highlighted by a front-page headline in the Cleveland Plain Dealer: “Blacks Bet the Numbers, Shun Ohio Lottery.” Lottery officials argued that a new daily numbers game could
turn the Ohio Lottery from a failure to a success. As the lottery began to maneuver, black
representatives on the Cleveland City Council introduced legislation to legalize numbers operations within the city limits, hoping to “offset” the lottery’s “intrusion into the
45
K. Leroy Irvis, “Time to Meet Needs of Elderly,” Pittsburgh Courier, Dec. 17, 1977, p. 6; Joy Haenlin, “Tiff
over Terminals: Lottery Plan Faces a Fight,” Detroit News, Feb. 11, 1980, p. 1B.
46
Frederick N. Rasmussen, “Former Numbers Runner Became Venture Capitalist,” Baltimore Sun, June 29,
2011, p. A1.
47
“Md. Lottery Chairmen Hits Bigger Jackpots,” Washington Post, Jan. 27, 1979, p. B3. See also “Md. Lottery
Payouts Going up 10 pct.,” ibid., April 24, 1979, p. C7.
90
The Journal of American History
June 2014
street game.” Meanwhile, a columnist for the state’s most prominent black newspaper,
the Cleveland Call and Post, initiated an effort to put the issue of a locally controlled legal numbers game on a statewide ballot for a referendum. These efforts fell short, and the
state launched its daily numbers game in late 1979. The game appeared just as a bill to
abolish the state lottery began to move in the state senate, but the returns from the daily
numbers game allowed the Ohio Lottery to avert abolition.48
The Illinois Lottery, meanwhile, was forced to return to the state legislature to start a
legal numbers game. But standing in the way were Lewis Caldwell, Harold Washington,
Charles Chew, and the supporters of a community-controlled policy game. In the spring
of 1977, four years after the creation of the Policy-Numbers Game Study Committee,
Lewis Caldwell was finally able to get his bill for a community-controlled policy game
up for a vote in the Illinois House of Representatives. Upon presenting the bill, Caldwell
stated, “The black community needs the jobs. I solicit your ‘aye’ vote on this proposal.”
An opponent of the bill asserted, “we are going to have people taking their welfare checks
and spending it on gambling.” But Caldwell pushed back, arguing that no more welfare
money would be spent on a legal policy game than was being spent in the illegal game.
After more than an hour of debate, Caldwell and his supporters, both black and white,
carried the day as the billed passed 96–62. It was a genuine accomplishment for a man
who had been a student of the policy game since his days as social worker and probation
officer on the South Side of Chicago in the 1930s.49
Unfortunately for Caldwell, the bill met immediate complications in the Senate Executive Committee where it was amended to bring the new game under the operational
control of the state lottery. Senators Chew and Harold Washington (now in the state senate) succeeded in tabling the amendment, and the bill finally saw the light of day as a genuine proposal for community control. “It is Charlie Chew asking you for a vote,” pleaded
the popular senator. “I need your help. I need jobs for my people. I need my people to
be regulated. I no longer want to see my people engaged in illegal business.” At the end
of the debate, supporters of lottery control and social conservatives skeptical of gambling
expansion combined to defeat the bill by a margin of five votes.50
Caldwell retired the next year, and in his absence lottery supporters quickly pushed
through a lottery-controlled numbers game. The new game went on sale in 1979. Illinois
governor James Thompson indicated that the daily game might be the last chance for the
“lottery to prove itself,” stating, “If it doesn’t work, . . . maybe we’ll gradually phase the
lottery out.” But work it did, and with the success of the new numbers game, the Illinois
Lottery entered a period of significant growth, ultimately establishing dominance in the
market at the expense of the illegal policy game.51
48
“Blacks Bet the Numbers, Shun Ohio Lottery,” Cleveland Plain Dealer, March 13, 1977, p. 1A; “Operator
Says State Can’t Stop Numbers,” Cleveland Call and Post, Jan. 28, 1978, p. 1A; “Legalize Numbers Game,” ibid.,
April 23, 1977, p. 3B; “4 Legislators Want to Abolish Ohio Lottery,” Cleveland Plain Dealer, Dec. 7, 1979, p. 1A.
49
State of Illinois, Eightieth General Assembly, transcript of floor debate on hb 41, House of Representatives,
June 10, 1977, pp. 12, 13, Illinois General Assembly, http://www.ilga.gov/house/transcripts/htrans80/HT061077.
pdf. On Caldwell, see Policy-Numbers Game Study Committee, unpaginated introduction.
50
State of Illinois, transcript of floor debate on hb 41, State Senate, “80th General Assembly, Regular Session,
June 28, 1977,” p. 245, Illinois General Assembly, http://www.ilga.gov/senate/transcripts/strans80/ST062877.pdf.
51
Mitchell Locin, “Fate Rests on New Daily Game: Lottery in Jeopardy—Thompson,” Chicago Tribune, Sept.
28, 1979, p. 1. The Illinois Lottery revenue increased from $32 million in 1978 to $215 million in 1983. Meanwhile, arrests for numbers (policy) in Chicago went from 833 in 1974 to 26 in 1986. See John Obi Ifediora, “The
Racial Politics, Illegal Gambling, and Government Lotteries
91
For black New Yorkers involved in the gambling business, the issue became urgent
in April 1977, when the director of the New York State Lottery sent a proposal to Gov.
Hugh Carey outlining a state-run numbers game. The April 16 front-page headline of the
New York Amsterdam News read, “Whites Planning to Take Over Numbers in Harlem.”
James Lawson told the paper that a state take-over of the game would put thousands of
people out of work. Lawson and the numbers men sent a telegram to Carey that read,
“Mr. Governor, if you have this taken away from us, we will all have to apply for welfare
which you say you don’t have a budget for. We do not intend for anyone to take numbers away from us because we invented it.” In May, Lawson went on the radio to offer a
proposal to the governor. The black and Hispanic numbers bankers were prepared to pay
$20 million to buy out the state’s four hundred otb locations, and they proposed to buy
franchises for four thousand state-licensed numbers spots at $10,000 each.52
The political climate in which Lawson floated his proposal was vastly different from
that in which black leaders had successfully blocked the Off-Track Betting Corporation
from entering the business in 1971, however. White ethnics in the city had grown increasingly resentful and bitter toward black and Latino demands. The city had consistently lost
population for a decade, shifting the balance of power within the state. Most importantly,
the city came frighteningly close to declaring bankruptcy in 1975. According to the historian Joshua Freeman, the bankruptcy scare “became the occasion for a broad reordering
of city life as bankers, financiers, and conservative ideologues made an audacious grab for
power.” The atmosphere had drastically changed, and a “national distaste for the city, its
residents, and their way of life” had set in.53
In the spring of 1977 Governor Carey ignored the proposal by Lawson and the numbers lobby. But Lawson appealed to the state legislature to block Carey’s bill, and the legislature agreed to delay any action pending further study of the impact of state numbers
game on ghetto employment. While such a study never materialized, the political and
social climate became increasingly hostile toward the demands of black New Yorkers.54
The tragic and violent blackout of the summer of 1977 was followed by the election
of Manhattan’s Ed Koch as mayor. The arson and looting during the blackout tilted the
city electorate to the right in pursuit of law and order, and Koch rode the backlash. Koch
had famously shifted with the political tides, and in 1977 his campaign for mayor succeeded by focusing on his support for capital punishment and his vows to hold “poverty
pimps” and “welfare cheats” accountable. The numbers gambling operators could expect
little sympathy from Koch, as Lawson and the accop had mobilized a get-out-the-vote
operation for Harlem Democrat Percy Sutton in his unsuccessful bid to defeat Koch in
the primary. The Koch victory, according to John Mollenkopf, amounted to the arrival of
“a new conservative dominant coalition in New York City politics.”55
Impact of the Illinois State Lottery on the Economy of Chicago” (Ph.D. diss., University of Illinois at Chicago,
1989), 27, 78.
52
“Carey Given a Proposal for State Numbers Game,” New York Times, April 12, 1977, p. 53; “Whites Planning
to Take Over Numbers in Harlem,” New York Amsterdam News, April 16, 1977, pp. A1, A3. “Black Number Bankers Offer to Buy Out otb,” ibid., May 7, 1977, p. A1.
53
Joshua B. Freeman, Working-Class New York: Life and Labor since World War II (New York, 2000), 256.
54
On Gov. Hugh Carey ignoring Lawson’s proposal, see “Black Number Bankers Offer to Buy Out otb.” On
Lawson’s appeal to the legislature and legislators agreeing to delay action, see State of Illinois, Eightieth General Assembly, transcript of floor debate on hb 41, House of Representatives, June 10, 1977, p. 3128.
55
On the blackout, see Jonathan Soffer, Ed Koch and the Rebuilding of New York (New York, 2010); and Freeman, Working-Class New York, 276. Jack Newfield and Wayne Barrett, City for Sale: Ed Koch and the Betrayal of New
92
The Journal of American History
June 2014
The new conservatism in New York also brought a rollback of the moratorium on
low-level gambling arrests. The criminology of victimless crime had faded significantly in
influence, and countless policy makers in New York and elsewhere adopted the position
that an overindulgent and tolerant attitude toward law breaking was leading to societal
breakdown, as had been vividly demonstrated during the blackout riots. As black and Latino numbers bankers and workers were finding themselves once again beset by police,
the legislature again took up the issue of a state numbers game, presenting legislation in
April 1980 to create a daily numbers game. During the debate of the bill, the issues of
welfare, law and order, and the erosion of morality in the city took center stage.56
Democrat George Miller spoke passionately on behalf of his Harlem constituents:
“There are in my community, as well as in some other minority communities, a lot of
people employed in this business, and I suspect that if this bill should pass, many of those
people will be out of employment.” Harlem Democrat Herman Farrell expressed fear of
a crime wave led by dislocated numbers workers, stating, “I am afraid that when they
become unemployed, that the form of unemployment insurance they are going to use is
going back to the streets and going back to some of their bad habits.” Thomas Boyland
of Brooklyn asserted that a state-run numbers game could push unemployment in his
district up to 60 percent. Assemblyman Clark Wemple then pressed Miller and Boyland
in a heated exchange, demanding to know if these numbers workers were also taking advantage of the tax system. “How about the people who run the numbers. Do they pay
income taxes? . . . Are they covered by the Occupational Health and Safety Administration?” he asked sarcastically, before proceeding to his final and all-important question:
“Are they on welfare too?” While Boyland conceded that he could not be sure, he continued to plead that the state should not be “scrounging for money from the very poor.”
But a fatal blow had been struck with the implication that numbers workers were gaming
the welfare system.57
Ultimately, the need to raise revenues outweighed the pleas on behalf of groups that
the majority of the assembly perceived to be welfare cheats, tax evaders, and criminals.
In the words of one legislator, the numbers game and its workers represented “everything
that is unsavory in our urban centers.” The coalition of those representing the New York
ghettos and those who were morally opposed to the expansion of state gambling failed to
block the passage of the bill, and the state numbers game became a reality with an 84–56
vote. Governor Carey signed Tax Law 1612 three days later. The front page of the New
York Amsterdam News on April 5 read, “State Takes Over Numbers: Police Expected to
Crackdown on Bankers.”58
Later that month, James Lawson and the accop organized one of the most unusual
protest marches in the city’s history. A citywide numbers strike was declared for April
York (New York, 1988), 137. John Hull Mollenkopf, A Pheonix in the Ashes: The Rise and Fall of the Koch Coalition
in New York City Politics (Princeton, 1992), 99. “Everyone Is Pitching In to Help Sutton-Dinkins,” New York Amsterdam News, Sept. 10, 1977, p. C12.
56
On changing conditions in New York and changing attitudes toward crime, see “Koch Warns Blacks,” New
York Amsterdam News, Dec. 31, 1977, p. 1; and E. R. Shipp, “City Makes a Big Issue of Little Crimes,” New York
Times, Aug. 30, 1981, p. 179.
57
Transcript of New York State Assembly debates on Tax Law 1612, April 2, 1980, pp. 3128, 3138, 3148, available by request at Public Information Office, room 202, Empire State Plaza, Albany, N.Y.
58
Ibid., 3156. “Albany Discovers the Numbers,” New York Amsterdam News, April 5, 1980, p. 14. “Way Is
Cleared for State to Get Numbers Game,” New York Times, April 3, 1980, p. 30. “State Takes Over Numbers: Police
Expected to Crackdown on Bankers,” New York Amsterdam News, April 5, 1980, p. 1.
Racial Politics, Illegal Gambling, and Government Lotteries
93
29. All betting shops were closed for business. The organization chartered buses to carry
workers from Brooklyn and the Bronx to the Manhattan office of Governor Carey. The
New York Amsterdam News ambitiously put the crowd marching downtown in the rain at
2,000, but other estimates placed it around 1,500. It is remarkable that anyone showed
up at all, considering that the group constituted an assembly of illegal workers, willingly
exposing their faces to cameras and police. The signs that the marchers carried made their
concerns clear. One sign read, GIVE ME MONEY TO EAT, GIVE ME A BETTER
HOME, OR GIVE ME MY NUMBERS JOB AND LEAVE US ALONE.59
The protests were a futile exercise, as the law had already been passed, and the state
government was not about to concede its newly achieved monopoly on the legal market.
On September 2, 1980, New York State numbers went on sale in New York City. On that
day only two locations in all of Harlem sold the State Lottery, but points of sale began to
expand rapidly. Within four years, the New York State Lottery quadrupled its sales and
thus could finally claim success.60
The failure of black leaders in New York and Illinois to secure legitimacy for thousands
of numbers workers made it clear that no such thing would happen ever, anywhere in
the United States. After New York, the only remaining major numbers market without
a lottery was Washington, D.C. After voters there approved a lottery in a referendum in
1980 that featured heavy prolottery advertising funded by gambling technology firms
hoping to win contracts from the new lottery, a skeptical Congress refused to allocate
any resources for start-up costs. The many black leaders in the district who had opposed
a lottery thus came to support the lottery as a matter of “home rule.” The D.C. lottery
was eventually set up under the watchful eye of Congress, relying on New York lottery
director John Quinn and former New Jersey lottery director Ralph Batch as consultants
and thus leaving little chance of any experimentation with alternative approaches. The
pattern had already been set; the numbers game invented and popularized by blacks in
Harlem during the 1920s was henceforth to be the domain of government lotteries, and
government lottery play was quickly to become an aspect of daily life for blacks, urban
dwellers, and the poor.61
The introduction of a state-run numbers game did not cause the traditional illegal
game to disappear in New York, but it did set off a series of problematic trends in the illegal market. In the assessment of the criminologist Peter Reuter writing in 1983, “the impact of state competition is most keenly felt by the smaller and least well capitalized black
and Hispanic games.” These black and Hispanic operators “flourished after the Knapp
Commission, and now they find it increasingly difficult to survive.” As these smaller operators struggled to compete with the state, their illegal status left them open to attack by
aggressive and violent organized crime groups, which “typically dealt with their competitors through murder and arson.”62
59
Major Robinson, “2,000 March against State Policy on Numbers,” New York Amsterdam News, May 3, 1980,
p. 1. “1500 Protest State ‘Cut-In’ on Numbers,” Albany Times Union, April 30, 1980, p. 16. Michael Daly and Don
Gentile, “They Fear That Their Days Are Numbered,” New York Daily News, April 30, 1980, p. 5.
60
“Public Notice: New York’s Lottery, 1976–1988,” Newburgh Evening News, April 11, 1988, p. 7A.
61
Keith R. Richburg, “Lottery Company Starts $80,000 Blitz in District,” Washington Post, Oct. 29, 1980, p.
A1. An Act Making Appropriations for the Government of the District of Columbia and Other Activities Chargeable in
Whole or in Part against the Revenues of Said District for the Fiscal Year Ending September 30, 1983, and for Other
Purposes (Washington, 1983), 62.
62
Peter Reuter, Disorganized Crime: Illegal Markets and the Mafia (Cambridge, Mass., 1983), 84. Eric Schmitt,
“U.S. Panel Says Cuban Emigrés Run a Bet Ring,” New York Times, June 25, 1985, p. B4.
94
The Journal of American History
June 2014
Workers from New York City’s illegal numbers industry staged a protest outside Gov. Hugh Carey’s Manhattan office in April 1980 against the state government’s plan for a legal numbers game
to be controlled by the lottery. Photo by Pat Carroll. Courtesy New York Daily News.
The internal problems of the illegal market were also exacerbated by a shift in the enforcement practices of the New York Police Department. Initiatives of the Koch administration shepherded the gambling public away from the illegal numbers and toward the
state lottery. In 1984 Mayor Koch pushed a bill through the city council referred to as the
padlock law, which used principles of the real estate market to make it impossible to conduct illegal gambling operations. The new law enabled the police to padlock a location
after a series of gambling arrests were made at the site. As a city police official explained,
“we found that many of the people who are renting these illegal storefronts are evicting
the people rather than stand to lose a year’s rent.” Attempts by black political leaders to
oppose the new law were undercut by the death of James Lawson in July 1985.63
While there is no comprehensive account of how the state game and the increased
enforcement of the 1980s affected black numbers gambling activity in New York, the
Pennsylvania Crime Commission conducted a detailed study of illegal numbers in Philadelphia during this period. The study reveals a pattern of decline in black autonomy and
an increase in violent coercion within illegal numbers, all of which, we can extrapolate,
was also the case in New York. The report points out that “Philadelphia for decades has
had numerous well-established numbers operations run by Blacks. However, this situation began to change during the 1980s.” According to the report, “by the end of the decade a larger proportion of the illegal lotteries were under white influence.” In consider63
President’s Commission on Organized Crime, Organized Crime and Gambling: Record of Hearing VII, June
24–26 1985, New York, New York (New York, 1985), 71–82, esp. 74. “Stroke Kills Lawson Popular Harlem Man,”
New York Amsterdam News, July 13, 1985, p. 3.
Racial Politics, Illegal Gambling, and Government Lotteries
95
ing the reasons for the decline in black success in the numbers business, the commission
pointed to competition from the new state game, coupled with violent and “increasing
incursions of white-run operations in Black neighborhoods.” Amid this decline, “an increasing number of Black gambling operators have turned to drug trafficking to increase
their profits.”64
As illegal numbers activity dried up, deteriorated into violence, or transformed into
drug activity, the new legal games and their parent lotteries flourished. Between 1975
and 1983, New Jersey, Massachusetts, Maryland, Michigan, Pennsylvania, Ohio, Illinois,
New York, and Washington, D.C., all established daily numbers games within their lotteries. Every step of the way, the urban poor and working classes were the target customers for these new products. The rapid growth of legal numbers games transformed these
failing lotteries into successful enterprises and enabled the spread of lottery sales terminals
throughout the Northeast.65
Meanwhile, as state lottery networks saturated the old urban numbers markets, the
imperative of revenue growth eventually necessitated introducing rural Americans to the
numbers habit. Given that the illegal game had existed almost exclusively in urban areas,
newly targeted rural Americans needed to be schooled on how to play. Lotteries around
the country distributed brochures and ran television ads to explain the game, because, as
a lottery executive explained in 1985, “with the expansion of our system into more rural
areas, where they’ve never been exposed to the numbers before, education is needed.”66
What was once a criminal vice had been recast as a public virtue. People who had likely
never heard of the numbers game and had no possible way to place an illegal bet in 1975,
were being “educated” on how to play by 1985. In effect, as a matter of public policy in
dozens of American states, the urban poor were denied the opportunity to keep their employment in producing the numbers game, while the rural poor were given an opportunity—indeed they were educated and encouraged—to begin consuming the game.
The number of persons who derived their income from illegal numbers gambling during the 1960s and 1970s can never truly be known. That police sources as well as representatives of the illegal industry in New York asserted figures that hovered around twenty
thousand suggests that the number was substantial. Any counterfactual argument that
the legalization of these many thousands of workers would have drastically altered the dynamics of either employment or crime in the black sections of the urban Northeast cannot be supported. Yet it also cannot be denied that prominent black voices proposed a set
of alternative priorities for legal numbers gambling, and those alternative priorities were
entirely reasonable. As the director of the National Urban League, Vernon E. Jordan, explained in a 1974 editorial titled “Legalize the Numbers,” “a numbers operation could be
successfully run by a public benefits corporation employing many of the present numbers
runners and plowing profits back into the community.”67
Yet the proprietary claims of black urban communities regarding the numbers game
and the ample evidence that thousands of people were earning their living from numbers proved insufficient in the gambling debates of the 1970s. The twenty-year effort by
64
Pennsylvania Crime Commission, Organized Crime in Pennsylvania: A Decade of Change, 1990 Report (Conshohocken, 1990), 214–23, esp. 215, 223, 216.
65
“Jackpot Fever,” Public Gaming Magazine (Aug. 1993), 23.
66
Terri La Fleur, “Daily Numbers Game Still 1st in Sales,” Gaming and Wagering Business (June 1985), 12.
67
Vernon E. Jordan, “Legalize the Numbers,” Cleveland Call and Post, March 9, 1974, p. 3B.
96
The Journal of American History
June 2014
black leaders in New York and Illinois to bring numbers gambling under local control essentially failed. Support for a community-based, legal numbers game was broadly based
within black politics, with black nationalists such as James Lawson and mainstream politicians such as Charles Rangel and Harold Washington backing the project. At the same
time, black religious leaders voiced minimal opposition. Despite the significant strides
that black numbers outfits had made in freeing themselves from the domination of organized crime, the taint of mob involvement in the business proved highly useful to lottery
expansionists targeting the game for take-over. Meanwhile, the perception of numbers
workers as criminals who cheat the tax and welfare systems undermined their chances of
crossing the threshold to legitimacy. Appeals for racial justice, demands for economic selfdetermination, and claims of local prerogative in gambling practices all fell short in an
atmosphere of racial backlash, economic retrenchment, and heightened calls for stricter
enforcement of the law. After several decades of conflict and debate the question was settled. The urban poor would be taxed through their gambling practices, rather than have
access to profits and jobs from taxed gambling.