Midwest Illegal Gambling

Before there was Vegas there was the Midwest

Stories

My 16th Birthday and the Glenn Rendezvous Club

 

Covington Gambling Lid Gives Newport a Boom

 

Sin Center

 

Syndicate Eatery To Open

 

Newport, Kentucky Gambling 

 

Gambling's history: Colorful, Nasty, Corrupt

 

U.S. Senate Special Committee to Investigate

Organized Crime in Interstate Commerce : KENTUCKY

My 16th Birthday and the Glenn Rendezvous Club

                                                                                                                            The Glenn Rendezvous was located on Monmouth St. in Newport, KY... an infamous night club owned by Pete Schmidt and later his son Glenn Schmidt, who later opened the bowling alley of the same name, now the Coconut Grove on 5th street.
My father, Robert 'Bobby' Davis was a 'buck and wing' dancer during the vaudeville days, and later an assistant to Newport mayor Fred McClaine, yet as with several other family members, was always involved in show business. In the early 1930's he became MC of the Glenn Rendezvous, at the time a palace of gambling, live entertainment, and fine food.
As a young girl, I started dancing at the Glenn Rendezvous with my sister Marian, and we were billed as the Davis Sisters, and later on as a trio with a young Doris Day. For my sweet 16th birthday my Father threw a huge celebration at the Glenn Rendezvous, this would be in 1935. Since my father was involved in politics, the party was attended by most Newport officials, courthouse attorneys, and county judges. The gifts were mostly monetary, and quite large for the time, my sister and I were quite a popular dance team.
We played local clubs like the Cat and the Fiddle, where the stage would rise up from underneath, and we were dressed as Chinese girls in a production called 'China Town'. The 'Orpheum Circuit', made famous by Gypsy Rose Lee led us to clubs all over the Midwest and East Coast; places like Kelley's, the Schubert Theatre, the Albee Theatre, and many, many more.
About a month after my 16th birthday, my Father passed away after coming down with pneumonia and having a massive heart attack. I'll never forget the day he died, Marian and I were at home alone, and our screams actually brought him back to life for a few more hours, he was only 42 years old. Our lives changed after that, money was tight, my mother went to work at a shoe factory, now a widow with 3 kids, the youngest our brother Murph who was only 6 at the time. I danced for a few more years, with my sister Marian moving onto Detroit and her dancing career, and Doris Day went onto Hollywood to become a big star. I stayed home to raise a family, and eventually would have 8 kids and live my life in Newport, KY all these years.
The years passed, Newport as well as the Glenn Rendezvous saw darker days. The infamous mob frame job and arrest of a drugged Sheriff George Ratterman at the Glenn Rendezvous in the late 1950's signaled the end of Newport's gambling heyday. The organized crime families of Capone and the Cleveland Syndicate left town, and with it the wealth and influence that made Newport, KY the sin-city sister of Cincinnati, OH.

From the March 7, 2006 MySpace page of “Bud Light” Dottie an 89 year old lady from Newport, KY

The Louisville Courier Journal

July 16, 1939 

Covington Gambling Lid Gives

Newport a Boom

By Three Investigators

 

A Gambler's Paradise is Newport, Ky., Campbell County's largest city, located on the Ohio River across from Cincinnati and adjoining Covington.

 

 Covington, which is in Kenton County, is without gambling, at least openly, but gaming rooms formerly were operated there on as extensive a scale as they are now run in Newport.

 

 The situation at a glance is just this:

 

 Gambling spots in Covington have been closed since April 5, when the "Blue Ribbon grand jury" impaneled by Circuit Judge J. Northcutt, returned 196 indictments, forty-two against James Brink, proprietor of the Lookout House.  Nearly all the indictments were for gambling.

 

 Prospects are that gambling spots in the county will remain closed for at least four more weeks, pending outcome of the August 5 Democratic primary in which Judge Northcutt is seeking re-election

 

 In adjoining Newport, nearly every café and restaurant has slot machines and handbooks are scattered throughout the city.  They operate openly.

 

 The Beverly Hills Country Club, the State's and probably one of the nation's finest gambling houses, is located there.

 

 In one brief day, we were able to find two other gambling houses, operated on an extensive and lavish basis, either one of which is comparable to our neighboring Club Greyhound [an illegal casino in Jeffersonville, Indiana, across the Ohio River from Louisville].

 

 Judge is Responsible

 

 And while gaming spots in Covington are closed, the "joints" in Newport are operating with increased business and being patronized by larger crowds.

 

 The man responsible for the whole affair is Judge Northcutt, who, since 1934, has waged a one-man battle against gambling in Kenton County, which ironically, has been a boon to the business in adjoining Campbell County.

 

 The Lookout House which was built years ago and was a roadhouse, began prospering as a night club and gaming sport in 1934.  It was then that Judge Northcutt first began hearing rumors about gambling in the club.

 

 Immediately Judge Northcutt made an appeal to the local police officials, but was unable to get the proper results.  In all, twelve raids were made but no arrests resulted.  On one occasion, State Police raided the Lookout House and confiscated a "hazard table and a bushel basket of chips."

 

 "Once I even sought the assistance of some private detectives in Cincinnati," he said.  "They agreed to help, but the next day they notified me that they would be unable to give me any cooperation."

 

 Knowing the Lookout House was running a gambling room open to the public and advised of the presence of slot machines and hand books in the city's cafes, Judge Northcutt selected the first grand jury to investigate the matter.  This report was made June 13, 1936, and the body returned thirty-eight indictments.

 

 The report states the grand jury heard "overwhelming evidence that large sums of money have been collected by gamblers in Covington, Ludlow and Kenton County outside of the cities, especially at the Lookout House and its adjunct known as the Schlosser Place.  The jury believes it reasonable to estimate that a thousand dollars a day is available for the purchase of immunity for gamblers in Kenton County."

 

 Continuing, the jurors compared the county's gambling spots to a "prosperous Monte Carlo" and stated that "perjury alone has prevented us from obtaining enough evidence to indict a number of these [law enforcement officials] for flagrant if not criminal neglect of their duty."

 

 No Results

 

 Meanwhile, while the grand jury was sitting, court proceedings were brought to enjoin gambling at the Kentucky Grill.  They were followed by twenty citizens, who testified that there was gambling and that it was common knowledge.  The injunction was granted, never appealed, but the place continued to operate.

 

 The injunction handed down, the court tried the thirty-eight defendants in which indictments were handed down but a hung jury resulted and the State never requested the cases reset for trial, according to Judge Northcutt.

 

 About this time an injunction suit was brought against the Lookout House and, as in the case against the Kentucky Grill, gambling was enjoined but the place continued to operate.

 

 Judge Northcutt said numerous gambling instructions to subsequent grand juries brought no results until the "Blue Ribbon grand jury" reported April 5, 1939, with 196 indictments.  Their report resulted in closing of Kenton County's gaming spots.

 

 The report recommended that the next grand jury investigate the county's law enforcement officials.

 

 Immediately, Judge Northcutt began to make preparations for calling of a special grand jury to investigate the officials, but he was interrupted when, on the day or the arraignment of the prisoners on the 196 indictments, attorneys made a motion to quash because of irregularities in the action of the grand jury.  This motion is still pending.

 

 Judge Northcut said on three or four occasions he has received threatening letters and twice word has reached him that it would be worth his while to ignore gambling in the county.  Once he heard it would be worth $250 a week to him if he would let up.

 

 One of the threatening notes was postmarked March 11, 1939, in Louisville.  Written with a typewriter on a penny postcard, it read:

 

 "Well, John, you show still further that you are not fit to be a Judge of any kind.  All the cheap publicity that you ben asking for it show that you are a cheap WARD HEALER.  Now Ward Healer John the Folks at the district will give you what is reely coming to you when the proper time come, however you may not finish the present term. Who Know?????"

 

 "Kind regards to the rest of the cheap Ward Heeler, and be careful, Judge."

 

 "So strong is the gambling element," Judge Northcutt said, "that a youth who testified before the grand jury was beaten and nearly blinded when Gangsters threw ammonia into his eyes."

 

 Meanwhile, Judge Northcutt regrets that his drive to destroy gambling in the country has resulted in increased business in the neighboring city.

 

 "Why," he says, so jealous are the Covington gamblers that it is rumored the Beverly Hills recent robbery was a reprisal from one of our local gambling groups.

 

 The judge told us the gambling element, which came to Kentucky from Detroit and Chicago, brought with it a group of mobsters and gangsters which overran the city.

 

 "One group had a Louisville businessman desperate with threats as they attempted to work the badger game on him," the Judge said. [A badger game involves luring a mark into a situation that can subsequently be used for blackmail.]

 

 The judge said that a State officer in his report of the gambling situation asked the report to be kept confidential because "I don't want to wake up some morning with a belly full of lead because lead is so hard to digest."

 

 Amazed by this tale of gambling and corruption, we thanked the judge and departed for Newport to see for ourselves.

 

 Being hungry, we decided to pick out a nice looking grill where we could get lunch.  We found an attractive restaurant.

 

 After seating ourselves in the grill room, we ordered lunch and proceeded to listen to the a radio over which a play-by-play description of the Cincinnati-Pittsburgh ball game was being called.

 

 Off at Latonia

 

 Suddenly we heard: "They're off at Latonia."

 

 We left out chairs and walked over into the adjoining barroom. There, seated at a table adjacent to the street door, we saw a red-faced robust man, racetrack rundown sheets and racing forms before him and a radio nearby.  It was over his radio that the call had come.

 

 Even though we had been warned that we would find things in just such a condition, we failed to hide the surprise we felt.  The operator asked what was the matter and we informed him that we were from Louisville, where even the rear room handbooks were destroyed by police.  He laughed.

 

 "Here," he said, "You will find that most of the small restaurants and cafeterias have handbooks.  You may eat your meals and either listen to the ball game or bet on race horses.

 

 After listening to the running of several races - a pleasure which had been denied to us in Louisville for several months - we walked over to the corner and began playing a slot machine, for the place had several machines lining the wall.  (We recently authored an article in which it was asserted that persons playing slot machines had little or no chance to win.)

 

 The Yorkshire Grill

 

 After eating our meal - we found it rather hard with the constant blaring of "they're off at Arlington" or "Mcormick hit a double scoring a run" - we decided to ride out to the Yorkshire Grill, 518 York.

 

 Entering the grill, we bought a drink and played a few moments at a group of slot machines which were lined up, back to back, in the middle of the room.

 

 Noticing a couple of swinging doors in the rear, we took a chance and walked through them.  A small man, with a mousy appearance, apparently noticed that we were looking around rather closely and asked us if we were looking for the men's room.  We said we were, and left.

 

 Returning to the gaming room, we discovered that it was furnished with modernistic leather chairs, contained two large dice tables along the left wall, a black jack table near the door as you enter the room, and a chuck-a-luck table adjoining the card game. [Chuck-a-luck uses a simple cage containing three dice. Players have the option of betting on the numbers (1-6). If one of the numbers you bet on come up once, you get paid even money. If one of your numbers come up twice you get paid 2-1. Should your number come up three times, you get paid 3-1. The house odds are so good that virtually no current gaming authority will allow it.]

 

 But No Music

 

 Along the rear wall were a number of racetrack boards.  Persons were lined up before the boards listening to the calling of the last race at Latonia.

 

 Having the plant well in mind, we left the room and walked several blocks to the famous Glenn Hotel, 928 Monmouth.  The outside of the hotel is very plain and shows the age of the building, which is almost a landmark in town.

 

 Entering, we found ourselves in a rather dark and cramped lobby.  Walking several feet, we were in the grill.  Looking around, we were accosted by a shirt-sleeved man, apparently the manager, who asked us what we wanted.

 

 "Have you any evening entertainment?" we asked

 

 "We used to have music but we done away with it," he replied.

 

 Still looking around, we said: "We're from Louisville and were told we might have a good evening's entertainment."  By now our eyes had lighted on a couple of swinging doors leading from the right of the room.

 

 "Maybe you would like to see our club room," he asked.  We assented and passed through the doors.

 

 We found we had walked into the most pretentious gambling rooms of our experience, and that takes in Indiana's Browns, Gorge, Club Greyhound, and several places in New Orleans.

 

 To the left of the room, placed on a large balcony, were a blackjack game and a dice table.  Very few persons stood around the card table, but the crowd stood two-deep at the dice table.

 

 On the main floor was a dice table, blackjack and chuck-a-luck tables.  This wall, as in the Yorkshire, was lined with racetrack boards.  However, by now the crowds had departed and only the trash on the floor was left to tell of the crowd that had stood eagerly awaiting the results of the holiday cards.

 

 "The room isn't too big, but it is nice if you like to gamble," the man stated.  "We keep it air-cooled and will show you a good time."

 

 Robbed Twice

 

 Promising to return, we departed and started for the Beverly Hills Country Club, which is located on the outskirts of Newport.

 

 Approaching our destination, we saw huge neon signs telling us of the fine, expensive floor located within.  Driving up a long roadway, bordered by electric lamps and a huge chain - the club is situated at the top of a large hill - we drove up to the doorway, turned our car over to the doorman, received a check, and entered.

 

 Walking to the rest room, we struck up a conversation with the Negro boy.  He told us the Club was three and a half years old and said the large, rambling brick home, adjacent to the club, belongs to the club's proprietor, Glen Schmidt, who, he said, personally buys all the food for the kitchen at the club.

 

 Jumping from one topic to another, we were informed that the club had been robbed twice, never raided, and shut down during seasonal intervals when business was bad.

 

 The first robbery occurred a year ago and netted $9,000,a nd the most recent several weeks ago.  It netted about $11,000 we were told.

 

"Mr. Schmidt had gone to the market and the club was deserted when the armed robbers took the place," the Negro said.  "The bookkeeper had just opened the safe and was preparing to take the money to the bank when the men entered.  If they had come at night, you can bet they wouldn't have gotten any money," he stated.

 

 Leaving the washroom, we entered the outer lobby, which embraces a luxurious bar.  It was packed with perspiring and well-dressed persons, seeking to curry favor with Lady Luck.  The walls of the room were lined with slot machines - twenty-nine in all - including nickel, quarter, half-dollar and dollar devices.

 

 Players stood before each machine and the air was filled with the din caused by the clang of the device being set in motion.  Seldom was the clatter interrupted by the jingling of returning coins to victorious players.

 

 However, we noticed one woman hit three oranges and received ten silver dollars on the dollar machine.  It surprised us at that.  We didn't know there were enough silver dollars in existence to operate two one-collar machines.

 

 Crowd Surrounds Tables

 

 Walking from the dining room through a door over which a neon sign reading "Club Room" glittered, we climbed a stairway and walked into the gaming rooms.

 

 The gambling room was crowded, and at first glance, it was hard to tell just what was going on in the room, it was in such a state of confusion.

 

 An investigation disclosed the four dice tables, four roulette wheels, a money wheel, chuck-a-luck and black jack tables were in operation and all were surrounded by a crowd.

 

 And in the crowd we discovered a host of Louisville and Jefferson County acquaintances, persons holding private and official positions.  Among them we discovered city officials, local detectives, and a prosecutor, all trying their luck.

 

 The money wheel being nearest to the door, we stopped and found the game, in which bets from a quarter up may be made on different numbers which pay odds in proportion to the frequency with which they appear on the wheel, being played chiefly by women.

 

 We noticed a flashily dressed, redheaded woman, formerly employed at the Club Greyhound as a shill, seated at the end of the table.  She won and lost her bets with little apparent concern as her eyes wandered round the room.

 

 $5 Minimum

 

 Two other women, their faces showing concern as they were greeted with success amd more frequent failure, sat at the end of the table and pooled their money.  One of them was heard to remark, "If we lose much more we will have to hitch-hike home."

 

 Moving to the next table, we found the black jack dealer turning all of the players' cards face up and one of his face down.  Surprised, we turned to a well dressed woman standing alongside and remarked that where we came from, the Greyhound, they didn't play that way.

 

 "Oh, you must be mistaken, that is where we used to do our gambling and they sometimes played the game that way there.  You see, the player knows whether the majority of cards out are low of high," she advised us.

 

 Thanking her, we moved on to the chuck-a-luck table where, just as at the dice and black jack table, the smallest bet was a dollar and not less than $5 worth of chips could be purchased.

 

 We noticed a nice looking white haired woman, who would have looked more at home at a church social, playing chuck-a-luck.  As she cashed in her chips - $40 worth - she had to call the cashier's attention to the fact that he only gave her $35.  Such occurrences were frequent.

 

 From there we went to the roulette wheels, all closely aligned.  At each table, groups of women sat in serious and studious attention.  The women - nary a man was playing at either of the four tables - were having average luck.

 

 Instead of betting the numbers, the players were playing odd and even, and red and black, but even then, 0 and 00 came up on the wheels at frequent intervals and the house took all the bets.

 

 No dimes

 

 Like all of the other tables, the minimum amount of chips one could purchase was $5, even though the chips were only 10 cents each.  One woman leaned over the table and put a dime on a number only to have it picked up and returned to her by the gamekeeper.  Our attempt to buy $1 worth of chips also failed.

 

 Walking to the dice tables, where the players, predominantly men, were standing two and three deep, we met a Louisville friend who warned us that "I am told that if you just win a little up here and leave the table it is all right, but if you try to win a lot they will throw in bad dice on you."

 

 Thanking him, we started watching.  We noticed players frequently threw $20 and $50 bills on the tables and asked for chips.  One Louisville player approached us and said that he had been cheated of $4.

 

 "I was betting on a nine, the man made nine, and they refused to pay off.  They said I was betting on a five." He asserted.

 

 About this time, the photographer complained the room was full of guards who mingled in the crowd and appeared to be watching him, although his small camera was hidden under his coat.  We advised him we couldn’t help that and went back to work.

 

 The croupiers' shouts of "they're coming out, all bets down," caught out attention.

 

 "Four is the point.  Get your bets down," he said.

 

 Throughout all this, the croupiers' assistants at each of the tables were kept busy removing bets and paying off with each roll of the dice.

 

 We were enjoying this when we received a tap on the back from a young man, not more than 18, who asked if we were playing.

 

 Being only kibitzers, we relinquished out place to the youth, who threw a $20 bill on the table and asked for $5 in chips.

 

 Returning to the money wheel, we were met by a Louisville detective who truck up a conversation.  He told us of the attempt of two Louisville men to take advantage of the ease and success with which gambling resorts operated in Newport

 

 Dropped $7,500

 

 According to the other officer, two Louisvillians opened a gaming spot in Newport.  The gaming proprietors, who work together, apparently resented the intrusion.

 

 Obtaining the cooperation of the outfit supplying race results, the Newport men arranged to have the results withheld for several minutes from the new gaming house.  Other persons were given the results so that they might make bets at the new spot.

 

 At the end of a few weeks, the Louisvillians were sadder but wiser.  They returned to Louisville minus $7500, and with their only remaining piece of equipment, a dice table, on the back end of a truck.

 

 We left, danced a few steps in the dining room, paid our bill, and departed, after first producing the car stub and a receipt showing we paid our check.

 

 Driving on through Newport to Covington, we entered a number of small restaurants but were unable to find a slot machine in operation.  Entering the Lookout House, we were informed that the gambling rooms were closed tight and had been for some time.  The club was being operated at a 60 per cent loss in the hope that it might weather bad times for four or five more weeks until the primary is held, a musician said.

 

 It was explained it was hoped that Judge Northcutt might be defeated and the gambling permitted again.

 

"Why," we were told, "since our gambling has been stopped we haven't been able to draw any business.  IT is all going to the Newport joints."

 

 Leaving, we entered our car and departed.

 

                       Time Magazine

May. 26, 1961

 

Sin Center

 

There has rarely been any problem about betting a buck or buying a babe in Newport, Ky., a red-brick town just a nine-minute, $1.35 cab ride across the Ohio River from Cincinnati. The town's traditions trace back to the female followers who camped around the local U.S. Army barracks in the 19th century. Since then, Newport has developed such a gaudy brand of gambling and prostitution that it stands today as one of the nation's most blatant sin centers.

 

Thoughtful Newport grocers used to keep stools handy so the local tots could climb up to play the slot machines. Cincinnati high school kids came roistering across the river to take advantage of the whorehouse specials: $1 for the prostitute, $1 for the madam. When one statistics-minded citizen clocked the trade at New port's biggest brothel, he discovered that the eleven girls averaged a new customer every seven minutes from noon Saturday until 6 a.m. the following Monday. The town had its spattering of killings, but they were generally shrugged off as "self-defense." One Easterner was shot in selfdefense—while sound asleep.

 

Old Virtues & New. As the years passed, Newport—like any limited-industry town—hustled to keep up with the times. Newporters claim that the pari-mutuel machine was developed there. Gamblers from coast to coast discovered that Newport was a place where they could "lay off" their bets (i.e., get well-heeled Newport gamblers who would cover all or parts of bets too big for the ordinary bookie to handle). Some 45 phone lines run into the Tropicana Club, where the layoff headquarters is in Room 315. One bar accepts as much as $75,000 a day in layoff bets alone.

 

In all, Newport's take from gambling and other forms of assorted vice now amounts to $25 million a year. Though the price has soared to $20, prostitution is still so common that bartenders seldom go through the formality of selling a customer a drink, merely shrug: "The girls are upstairs." A man can still lose his wad in the gambling joints that wink with neon along York and Monmouth Streets and glow softly in the bottom land down by the river. And though three whorehouses Lave recently flourished within a block of the station house, Newport's police still look on their town with innocent eyes. "I never seen gambling at the Tropicana," Detective Pat Ciafardini has testified. "As for clear-off or layoff betting, or whatever you call it, I don't know nothin' about it."

 

Attempted Pass? Of course, Newport has its share of reform-minded citizens. Inevitably, they have launched many a reform movement—with little success. "The reformers don't stay around here," says Lawyer Daniel W. Davies. "They catch too much hell from the merchants. Everybody expects a little gambling, a little vice. Everybody's liberal around here."

 

Last week a latter-day reformer was about to be liberalized out of business before he even got started. He was George Ratterman, 34, father of eight and a onetime T-formation quarterback who was a bench-riding substitute for Johnny Lujack at Notre Dame, then for Otto Graham on the National Football League's Cleveland Browns. Although in his playing days he had never been noted for confining his antics to the football field, Ratterman was thrust forward as the candidate for sheriff by a local reform group called the Committee of 500. But fortnight ago. Newport's cops found Ratterman bedded down with a Brillo-haired stripper named April ("I'm an exotic dancer"') Flowers in Room 314 of the Tropicana.

 

This week April testified that Ratterman was trying to complete a pass when the cops showed up. Ratterman maintained that he had been drugged and framed. After a trial of five days, he was cleared on evidence that April's lawyer had been involved in a plan to photograph an unidentified man at the Tropicana under circumstances suspiciously similar to those that plagued Ratterman. This week a county grand jury will start poking into Newport, and next month a federal grand jury in Lexington will take up the chase with the backing of Attorney General Robert Kennedy himself.

 

 

Syndicate Eatery To Open

Historic night spot sticks with Hollywood theme

December 7, 2008

NEWPORT - The owner of the historic Newport Syndicate will once again expand the banquet hall into a restaurant and piano bar beginning this month.

 The restaurant in the landmark Syndicate closed two years ago. Owner Sharon Forton focused on the catering and banquet hall.

The restaurant Mokka used space in the Syndicate before moving next door last month.

The success of the banquet hall gave Forton the confidence to reopen the restaurant.

"We took some time to focus on getting the banquet business built up," Forton said. "Now we have time to put into the restaurant."

The restaurant will open Dec. 17 and will host a New Year's Eve bash along with country radio station B105. Forton expects about 1,000 people to attend.

Forton envisions the piano bar, dance floor and menu drawing a diverse group of people enjoying a night on the town. Forton said she will have live musicians and DJs performing.

"Once the restaurant is done serving, it will become like a club," Forton said. "The dance floor is huge. There are still a lot of people that want to dance and are not necessarily in their 20s."

The 50,000-square-foot building has served as a vibrant night spot since Newport's gambling/mobster heyday in the 1930s and has housed the Playtorium and Glenn Schmidt's bowling alley.

The décor retains a 1940s nostalgia with a Hollywood flair, Forton said.

"The dining room is done in some rich colors," Forton said. "It is pretty incredible. The original Syndicate restaurant had a gangster theme. When it was redone, it was more of a Hollywood theme. We are sticking with that."

The menu will feature staples of the catering menu and new additions, including several Italian dishes, she said.

The dining room will be open from 5 to 10 or 11 p.m. Monday through Saturday and serve brunch on Sundays, Forton said.

Forton bought the Syndicate in 2005 after she had worked there for 10 years.

"As the economy gets difficult, people still need to be entertained," Forton said. "You can come in here and not spend a lot of money."

Newport, Kentucky Gambling 

 

The Saturday Evening Post of March 26, 1960

James A. Maxwell 

 

The  Rev. Dudley Pomeroy, a Baptist pastor of Newport, with a group of his young people.   He feels the abolition of gambling is probably hopeless, and would settle for a cleanup that merely meant "no sale of liquor to minors, observances of legal closing hours, and stamping out of prostitution."

 

In early 1959 a number of Protestant ministers and highly respectable, churchgoing laymen of Newport, Kentucky, were spending many of their evenings in a most unseemly fashion. They patronized bars, shot craps, played roulette and placed bets on horses in the various casinos around the city, bought liquor after hours and frequented street corners where they knew they’d be most likely to be approached by the local Jezebels.

 

The reason for this seeming departure from rectitude became known in February when the clergymen and parishioners, representing the Social Action Committee of the Newport Ministerial Association, appeared before the Campbell County Grand Jury to seek indictments of Newport’s mayor, city manager, police chief, chief of detectives, liquor administrator and all four city commissioners for nonfeasance of office.

 

The testimony presented against the officials was voluminous and detailed. Gambling was flourishing openly throughout the town. State and city laws governing the sale of alcoholic beverages were being flouted. Prostitution, or at least solicitation—the investigation was understandably incomplete in this area, was prospering with almost no police interference.

 

These conditions, the witnesses said, were a matter of common knowledge—numerous newspaper reports were introduced to support this contention—and because the city fathers had done nothing to correct the situation, they had obviously and deliberately failed to carry out their oaths of office. Impeachment was therefore, demanded.

 

To the astonishment of almost no one familiar with the customs and mores of this northern Kentucky city, the grand jury had little interest in such harsh measures. In its final report before disbanding, the jury admitted that it had been presented with indisputable evidence of widespread illegal activities in the city, but this, the jurors felt, would be a prissy reason for endangering the municipal posts of nine amiable men. Therefore, there would be no indictments. With world-weary tolerance the jury concluded in its statement that, “Mankind, having been born in sin, will ever be prey to the temptations of sin.”

 

“I wish those guys had been thinkin’ that way when they had me up there on a burglary rap,” one accused malefactor is reported to have said wistfully while reading a newspaper in his cell the next day.

 

In taking a lenient view of Newport’s foibles, the grand jury was only following a course set by innumerable other such bodies in the past. With the exception of a few brief periods of uneasy experimentation with reform, Newport has been a wide-open town and one of the nation’s big centers for illegal gambling for about sixty years.

 

The 1920’s were Newport’s gaudiest period. The town was then a popular refuge for bootleggers, gangsters and assorted dubious characters who, for one reason or another, found it advisable to absent themselves temporarily from the police or business associates in other cities. Violence became commonplace in northern Kentucky, and law enforcement was about on a par with that in Cicero, Illinois, in the heyday of Chicago mobsters’ activities there.

 

The brothels of Newport did everything but put up electric signs and take space in the newspapers to advertise their presence. Gambling was not restricted to casinos and saloons. Almost every drugstore, candy shop, grocery and dry-cleaning establishment had slot machines on display. Liquor flowed as though the Eighteenth Amendment had never been added to the Constitution.

 

Although the city has become considerably more circumspect since that time, the citizens have never shown a burning desire for a radical change in the basic modus vivendi.

 

The experience of the most recent reform movement is typical. In the November, 1949, election a group of candidates won the approval of the voters with a mild “clean-up-but-don’t-close-up-Newport” platform. However, when the new officials took over, they found that the gamblers, café owners and liquor dealers, long accustomed to unfettered operation, fretted under even such minor restrictions as legal closing hours and no sales on Sunday. Soon the regulations were being generally ignored.

 

After several months of dismal failure to achieve minimum regulation, the authorities reached the unhappy conclusion that the only way to clean up the city was to close it up. Gambling laws were enforced, and all of the major casinos were shuttered.

 

This uncomfortable situation was permitted to exist only until the next municipal election in 1951, when the reformers were ejected from office by an overwhelming vote. There has been no organized political movement to alter Newport’s cultural pattern since then.

 

“If we don’t go too far, we can clamp down on prostitution and maybe do something about after-hours sales of liquor without raising much fuss,” one Newport official told me. “But anybody who’d run for office on a platform of throwing out gambling would get about as many votes as a pro-integrationist candidate for a Mississippi school board.”

 

Newport has none of the bright, brassy glamour usually associated with a gambling center. It is a drab, shabby-looking community of about 33,000 which lies just across the Ohio River from downtown Cincinnati. A pair of bridges connects the two cities. The northern Kentucky town is old—it was incorporated in 1795—its streets are narrow, most of its buildings are ancient and begrimed, and its atmosphere is vaguely depressing.

 

Yet, in this unprepossessing setting, gambling is estimated to be a $20,000,000-a-year business. Employment is high. One out of every 145 adult residents holds a fifty-dollar “gambler’s stamp” issued by the Federal Government, and this ratio includes only those who work with the numbers pool or accept bets on racing or other sporting events. The numerous persons who operate the crap tables, roulette wheels and similar on-premises games are not required to have stamps and are, therefore, officially uncounted.

 

Despite the vast amounts of money which change hands within its one and half square miles of municipal territory, Newport has long been in straitened circumstances. City employees are poorly paid. For example, a teacher with a bachelor’s degree receives a starting salary of $3150 annually. Until the end of 1959, the pay of policemen and firemen was among the lowest in the country among cities of comparable size. An increase, approved by the voters in the last election, improves the standing of the two departments somewhat.

 

Economically Newport is almost wholly dependent upon Cincinnati. Although the Kentucky city has some industries of its own—a steel mill, a clothing factory and a brewery are the biggest—a large majority of residents work in Ohio.

 

Cincinnati and the numerous conventions held there also provide most of the patrons for Newport’s gambling halls; and an astonishing number of prosperous, respectable citizens on the Ohio side of the river prefer to have their liquor illegally delivered from Kentucky to buying it at their own, state-operated stores. Cincinnatians also purchase most of the bottled goods sold in Newport on Sunday.

 

For newspapers, Newport must even depend upon special supplements published by the two Cincinnati papers for local coverage. Both do an adequate job of reporting Kentucky news, but they usually avoid crusades on the theory that outside interference would be resented by the natives.

 

There is considerable validity to this belief. Relations between Cincinnati and Newport are frequently testy. Newport is viewed by Cincinnati as a disreputable relative, too close to be disavowed, but certainly not to be invited to a family dinner. Newport feels, with some justification and much heat, that Cincinnati’s well-advertised municipal morality is maintained not because of the basic rectitude of the citizens, but because they can freely indulge their illicit impulses simply by crossing the Ohio River.

 

“If those bridges ever fall down some night,” one resident of Newport said grumpily, “every crap game in this town will be gone the next morning.”

 

At the moment, though, the bridges are still firmly in place, and Newport offers the visitor a rich variety of ways to test the laws of probability in a selection of surroundings ranging from plush to grubby. There are some 150 bars and night clubs in the city, and almost all of them provide at least the means for wagering on horses. Most of the larger places, however, thoughtfully provide a number of routes to insolvency.

 

The Yorkshire Club and its nearby neighbor, the Flamingo, are typical of the more elaborate institutions. Each is large and fairly attractive in an overglossy fashion, and the Yorkshire’s bar and restaurant serve good drinks and food at moderate prices. The gambling casino is in an adjacent room which the casual patron can ignore or enter according to his whim.

 

The Flamingo’s casino, which differs only in detail from the Yorkshire’s, has dice tables, roulette wheels and blackjack games. The back wall is covered with enormous blackboards which list the races on all major tracks in the country, along with the baseball and important college football or basketball games to be played in the coming week. 

 

Because competition is stiff there are a number of places which operate as night clubs, complete with floor shows, to entice the customers. The best of these is the Beverly Hills, in Southgate, a small community which borders Newport. 

 

Beverly Hills has a spacious, handsome dining room, fair food—it once was excellent—and a resident chorus line. Well-known bands and such entertainers as Joe E. Lewis, Martha Raye and Pearl Bailey are regular attractions. 

 

The adjoining casino has nothing so crass as blackboards and racing entries. In this oddly quiet, well-decorated room, the customer walks on deep-pile carpet, is soothed by soft unobtrusive music and, if he tires of or is beaten by roulette, dice, blackjack or chuck-a-luck, he can sit at a comfortable table at one end of the room and revive his spirits with drinks and sandwiches served by sympathetic and understanding waiters. 

 

Even if he happens to be there on a Friday night, when the casino is usually jammed—most of the business is done on weekends—there will be little noise to disturb his contemplation. Patrons line the various brilliantly lighted tables and place their bets, throw dice, murmur a request for a card from the blackjack dealer, all with blank faces and lack of animation. The sound of the equipment in operation, the click of chips and the low, monotone voices of croupiers are the only audible evidence that one is not in the reception room of a funeral home. 

 

On a less elegant scale is the Glen Rendezvous in Newport itself. Until a few years ago this intimate supper club booked acts comparable with the Beverly’s, but now the emphasis is heavily upon strip-tease.

 

 The casino at Glen Rendezvous is livelier and much smaller than Beverly’s, but it offers the same gaming devices as the larger club.

 

Slot machines, which once were to be found in abundance in Newport, have largely disappeared, even from the regular gambling establishments. Perhaps the Federal tax of $250 annually for each machine has contributed to this lack of popularity.

 

However, I did encounter a row of mechanical pirates at the Copa Club, a huge, barnlike establishment which features leading Negro acts. There were, of course, other forms of gambling for those who like to have company while losing money. 

 

Although Newport has its full quota of “bust-out joints”—establishments where the dice exhibit the training of Seeing-Eye dogs and the backs of cards convey as much as the fronts to the dealer—most of the larger places zealously guard their reputations for honesty, maintain the decorum of a church social in the casinos and make no effort to lure casual visitors into the games.

 

However, the Silver Slipper, a major establishment on Monmouth Street, Newport’s main thoroughfare, not only tries to persuade the customer to gamble but entices him into an unfamiliar game. When a customer starts from the bar toward the night club, he must pass through the casino. If he is not a regular patron, he is greeted at the entrance to the gaming room by a warm, friendly fellow who shakes him by the hand and then guides him off to a small tabled to receive a souvenir of his visit. 

 

The attendant at the table presents the patron with a key ring or ball-point pen and then generously offers two free throws of the dice to the visitor. These are not ordinary cubes, but Egyptian dice, eight-sided affairs with a number on each facet. The visitor rolls the dice, and the croupier adds up the numbers which appear on top. “Four-seven-nine-thirteen-sixteen-eighteen-twentytwo-twentysix,” he intones at a speed rivaling that of a calculating machine. The eight dice are placed in the cup before the average player has totaled more than three of them. The attendant points to a chart bearing numbers which rests on the table, and the lucky player finds that he has won two dollars. 

 

A few moments later the game becomes more complicated. Some totals, it seems, are neither winning nor losing numbers, but simply require the house to double the amount the player may potentially win; but he, in turn, must also double his bet. Before long the situation becomes feverish. The stack of possible winnings is now enormous, but so is the amount of money the player has already lost in an attempt to win the big prize. He is further unnerved by his complete inability to do mental arithmetic at one tenth the awesome rate of the croupier. A few moments later, just as the player is within a half point of taking the grand prize, he makes the horrible discovery that his wallet is empty. Is he finished now that a small fortune is within his grasp? 

 

Not at all. Suddenly another pleasant man, apparently equipped with some kind of fiscal radar, is at the player’s side offering to extend credit upon the presentation of proper credentials. The player receives his financial transfusion, and he’s back in the game—for a while. Later there is a check to be signed when he finally gives up.

 

 Not long ago a salesman who lives in Cincinnati took his wife and his parents on a tour of Newport. The Silver Slipper was the last stop. He became involved in the Egyptian-dice game while the others watched, and several minutes later forty-five dollars, all the cash the party had with them, was gone. He began playing on credit and, at the end of twenty minutes, he was suddenly and horribly aware that he had lost an additional $435, for which he gave his check.

 

“We all seemed to be hypnotized,” he said in a disbelieving tone when he told me of the incident later. “I’m no gambler—I’d never lost more than ten dollars before in my life—and there I was playing for more money than I could possibly afford to lose. And the funny part is, neither my wife nor my parents tried to stop me. They must have been as dazed as I was.”

 

The morning after the experience, the salesman decided he’d been fleeced and ordered his bank to stop payment on the check. His wife and, to a lesser degree, he were worried about possible retribution from the gamblers; but so far he hasn’t received even a telephone call asking him to make good on the check.

 

Most of the big gamblers in Newport frown on the tactics used by the Silver Slipper. “Hell, that’s cheap carnival stuff,” one of them said when I told him of the salesman’s troubles. “We’re in a big business and we gotta act big. A guy gets conned into playing and he loses his dough, you always got a squawker on your hands. They make problems for everybody. All we gotta do is play the percentages and behave ourselves, and everything works out fine.”

 

To be sure, there are occasional publicized protests, but these, while embarrassing can usually be ignored or strangled with bureaucratic red tape. To guard against the unlikely possibility of an intractable grand jury’s seeking firsthand evidence, the gamblers simply store their equipment whenever the jury’s in session and take a vacation.

 

But the problem was somewhat more awkward in 1951 when Estes Kefauver’s Senate Committee to Investigate Organized Crime in Interstate Commerce took an interest in Newport’s affairs.

 

The committee first established the scope of gambling in northern Kentucky, then uncovered the fact that a Cleveland syndicate controlled a major part of the operations in Newport and followed this with some inquiries about incomes which placed a number of gamblers in an extremely bad light with the Internal Revenue Service.

 

Next, the committee called in some Newport officials and asked why a situation, in flagrant violation of the laws of Kentucky, had been permitted to continue. The senators were probably more stunned than enlightened by this part of the investigation.

 

For example, George Gugel, who has been chief of police in Newport since 1946, said that he was astounded at the testimony that there was gambling in his fair city. Rudelph Halley, chief counsel of the committee, asked the police chief if he wasn’t familiar with the fact that any local cab driver could take a customer to a gambling emporium in a matter of minutes. Gugel said humbly that never in his life had he ridden in a taxi.

 

After several equally unrewarding exchanges, Halley asked with some awe, “Would you be surprised to know there is gambling going on?”

 

“For me, yes, because I’ve never been in there,” Gugel said virtuously. “All I know is what somebody told me.”

 

A curious incident which took place a few years later revealed that during the interval Chief Gugel had become at least partially acquainted with the seamier side of his city. Some background information will be helpful in understanding what follows. It seems that for years the police force and the detective bureau had operated more or less independently and coordination of activities was often lacking. 

 

In any case, detective Jack Thiem, for reasons still unknown, decided to raid Glenn Schmidt’s Playtorium, one of Newport’s better-known gambling spots. To witness and record the projected triumph of virtue over vice, Thiem invited a photograper from the Louisville Courier-Journal to accompany him—there is no local newspaper.

 

When Thiem and his companion burst into the casino, the officer was astonished and embarrassed to find Chief Gugel and three detectives from Thiem’s own office among those present. The photographer, of course, snapped a picture of the encounter, but it never saw publication. Gugel immediately placed the cameraman under arrest and destroyed the film.

 

Gugel was briefly suspended from his job, less because of his choice of divertissement than because of the uproar the newspapers created over his highhanded treatment of a member of the press. Thiem was summarily fired, presumably for gross infraction of fraternal courtesy. 

 

Because Gugel, detective chief Leroy Fredericks, the mayor and the city commissioners had proved to be something less than effective allies, the reform-minded Social Action Committee attempted for some time to interest state officials in a cleanup of Newport. Thus far the men in Frankfort have shown no enthusiasm for the undertaking.

 

In the summer of 1958, for instance, The Louisville Times ran a series of articles about wide-open gambling in Newport. When these reports were brought to the attention of Gov. A.B. (Happy) Chandler, he dismissed them with, “We have no information of the truth or falsity of his [the reporter’s] statements—officially or otherwise.”

 

With Governor Chandler’s door firmly closed, the reformers tried another tack a few months later. As do most states, Kentucky specifically forbids gambling in any establishment which holds a liquor license. Therefore, the Social Action Committee reasoned, if the state commissioner of Alcoholic Beverage Control would enforce this law and revoke the licenses of all who violated it, a damaging, if not fatal, blow would be struck at the gambling interests.

 

State commissioner Alfred Portwood was, if possible, even less helpful than the governor had been. “They [the newspapers and other complainers] are painting a picture that does not exist there,” Portwood said. His investigators had looked into the complaints, he continued, “but we did not find any evidence to prove the information that was reported.”

 

Since this second defeat in Frankfort, the Social Action Committee has returned to harassing Newport’s mayor with repeated requests for a sweeping investigation by the state police. Under Kentucky law, the state police may not officially come into cities of the first five classes without a written invitation from the chief executive of the municipality. 

 

Mayor Alfred G. Maybury, who left office on January 1, 1960, was especially sensitive on this point because, in an incautious moment during a campaign, he once promised to take exactly that step. In 1958 he became so unnerved by demands that he fulfill his pledge that he said he was delegating the authority to call the state police to city manager Oscar Hesch.

 

Hesch, who had served both as mayor and city commissioner of Newport, is an experienced hand at tossing hot political potatoes, and he immediately heaved it back with a note from the city solicitor to the effect that certain of the mayor’s powers, including the right to yell for help, can’t be relinquished to a deputy. The unwanted authority remained stuck on a hall ceiling midway between the mayor’s and the city manager’s offices.

 

The Social Action Committee remains astonishingly good-natured in spite of its frustrations, setbacks and complete lack of progress. “We knew when we started out that we couldn’t change things overnight,” Christian Seifried, the chairman, says mildly. “But eventually we’ll win.”

 

Seifried, who has lived most of his life in Newport and has been a letter carrier for the past eighteen years, bears no resemblance to the popular image of the rampaging, hell-fire-and-brimstone reformer. He is a friendly, calm man in his mid-forties, who speaks of his home city with warmth and well-tempered hope.

 

He is, however, a man with strong religious convictions and, in the course of delivering mail, he has daily contact with a number of Newport’s brothels and gambling places. “I made a pledge to God and myself that I’d do something about the situation if the opportunity ever presented itself,” he told me.

 

In 1956 he decided the time had come and he went to the Rev. Harold Barkhau of the Northern Kentucky Association of Protestant Churches with his plan. The Social Action Committee was then formed with a minister and two laymen representing each of the Protestant churches in Newport. There are about thirty members.

 

“We first wrote to J. Edgar Hoover for advice on our problem,” Seifried said, “and he told us that our main job in the beginning was to bring conditions to the attention of the public. I think we’ve done fairly well with that.” He smiled ruefully. “I can’t say the results have been very impressive so far, thought,” he added.

Gambling's history: Colorful, Nasty, Corrupt

Cincinnati Enquirer January 21,2009

In the late 1940s, working as a Kentucky State Alcohol Board field agent was a pretty good gig.

 

 There was a certain agent working Kenton County who earned $3,840 a year - equivalent to $32,738 in today's dollars - when the nation's average salary was less than $3,000 a year.

 

But the agent lived pretty well. Adjusting for inflation, his net worth was $344,000, he lived in a $207,000 house that was paid off and he owned two cars, stocks and bonds.

 

So how did he did own so much while making so little? The answer is in a U.S. Senate inquiry into organized crime that became known as the Kefauver Hearings, named for the Tennessee Democrat, Estes Kefauver, who led the probe in the early 1950s.

 

As I write this column, Kentucky lawmakers are pondering legalizing casino gambling. I am not trying to make comparisons, support or oppose casinos or even offer context into our region's days as a wide-open haunt of gambling, prostitution and vice.

 

I was just interested in what it was like back then.

 

For local history buffs or those with similar interests, I suggest logging on to an Internet search engine, typing in "Kefauver hearings" and then taking a trip back to a different place I have come to know, as a political writer and 26-year resident, as a law-and-order bastion of conservatism.

 

The hearings, fictionally recreated in "The Godfather II," were conducted in Washington and around the country in the early 1950s, unveiling the reach of organized crime into not just big cities like New York and Chicago, but smaller towns like Covington, and Scranton, Pa.

 

The hearing that touched on Northern Kentucky gambling was held in mid-January of 1951 in Cleveland.

 

In the days after World War II, the money was flowing and the graft was pervasive across the region.

 

According to the Senate committee's final report, our liquor agent confided in a Covington politician about a "profit-sharing plan conducted by the gambling interests for high appointive of elective officials."

 

Testifying before the committee, the agent explained that when he came across a bar that also offered illegal gambling - and at the time more than 100 bars in Covington alone did so - he was told by his superiors to look the other way.

 

"We are not instructed to interfere with them," he said, "and have not been doing so."

 

More than 1,500 slot machines were operating in Kenton County. A bar called The Turf Club in Covington earned, and again these numbers are adjusted for inflation, $577,000 a year taking bets on horse races and another $56,000 on slots.

 

Across the Licking River in Newport, the Yorkshire Club was bringing in more than $13 million a year in today's dollars with its flourishing but illegal casino. Beverly Hills took in more than $8.5 million a year.

 

Even local officials claimed to be surprised by the size and scope of the gambling. William J. Wise, the Campbell County Commonwealth's attorney at the time, told the committee that the amounts of money being gambled were "fabulous" and "much more sizable than any of us thought or could have imagined."

 

Many of the operators were members of the Cleveland Syndicate, which had set up shop in Kentucky after running into trouble up north.

 

Those who got in the way of the mob invited trouble, intimidation and violence.

 

A civic leader who was spearheading a campaign against gambling was repeatedly threatened. Twice, garbage cans full of "filth" were hurled through the plate-glass front door of his home.

 

A group of gamblers known as the "Tavern Owners Association" promised to discontinue giving money for a local hospital drive unless civic and church leaders fighting gambling were "persuaded to lay off."

 

The gamblers eventually were pressured to move out of town by reformers, clean politicians, muckraking reporters and committed law enforcement.

 

Places like Las Vegas grew into gambling meccas after places like Newport and Covington were cleaned up and closed down.

 

The comparisons between illegal, mob-controlled gambling and the type of casinos being proposed today - highly regulated operations owned by publicly traded companies - are unfair and hardly apt.

 

But mention the potential of casinos returning to Northern Kentucky and it's hard not to think about "back in the day."

 

CRIME IN MEDIUM-SIZE CITIES

 Kefauver Committee
Final Report
Aug. 31, 1951
U.S. Senate Special Committee
to Investigate Organized Crime
in Interstate Commerce

KENTUCKY

 

About 100 persons were observed in the Latin Quarter which featured three or four dice tables and two roulette wheels. An investigator for the committee was barred from the gaming room

Campbell County, Ky., of which Newport is the county seat, is directly across the river from Cincinnati, and many residents and visitors of Cincinnati are accustomed to go there for the purpose of visiting the lush gambling casinos that have operated openly in Campbell, County for many years. Kenton County, Ky., of which Covington is the county seat, adjoins Campbell County and presents a parallel situation. At the time the committee's investigators visited this area, the gambling operations in both counties, especially Campbell, were so open that the casual visitor would gain the impression that gambling is legal in Kentucky.

 

The fact is that Kentucky gambling laws are very strict. It is a felony under Kentucky law to "set up, keep, manage, operate, or conduct" any gambling device or contrivance. The penalty is a $500 fine and a mandatory prison sentence of to 3 years, plus permanent loss of suffrage and of the right to hold public office. However, not a single successful prosecution under this law has been reported in either of these counties and not one defendant has gone to jail.

 

The committee had held hearings in Cleveland on January 17, 18, and 19, 1951, at which it received testimony to the effect that the Cleveland gambling syndicate, having been driven out of Cleveland, had moved into Campbell and Kenton Counties. Accordingly, upon the extension of the committee's life until September 1, it was determined to investigate these northern Kentucky counties.

 

The committee found that the city of Newport under a new reform administration is making fast strides toward honest law enforcement, despite obstruction on the part of the chief of police and some of his subordinates. On the other hand, the rest of Campbell County was found to be wide open.

 

The committee's investigators visited the Beverly Hills Country Club, the Latin Quarter, the Yorkshire Club, and the Alexandria Club, all in Campbell County, and found them to be operating openly. At the Beverly Hills Country Club, about 150 persons were observed, in the casino where there were four dice tables, two roulette wheels, a black-jack table, and chuck-a-luck table.  

At the Alexandria he found approximately 250 persons and announcements being made on the public address system that the blackjack table was open. There was also a chuck-a-luck table in the place.

 

In Kenton County the situation was similar, except that the establishments were smaller and operated more surreptitiously. Those in operation were the Lookout House, the Kentucky Club, the 514 Club, the Kenton Club, the Press Club, the Gold Horseshoe, and the Turf Club.

 

The committee conducted open hearings in Washington on July 23, 1951, regarding conditions in Kenton and Campbell Counties and heard a graphic description of the futile efforts by church and civic groups to secure better law enforcement. It appears that Kentucky has a quaint custom under which all gambling ceases during the three periods of the year when the grand jury is in session. The grand juries purport to investigate gambling and find none taking place. Grand juries are in session for a total of about 27 days each year and the rest of the time gambling continues unhindered.

 

Kent County has been flooded with slot machines for years and it was estimated on one occasion that there were 1,500 machines in operation. Gambling has been a paramount factor in a number of court cases arising out of domestic difficulties.

 

In March 1050, a meeting was held in Covington attended by representatives of a civic association, law enforcement officials, and the press of Kenton County. All those present subscribed to this statement:

 

We who have met and conferred concerning commercialized organized gambling and law enforcement conditions in Kentucky agree to cooperate full-heartedly in the enforcement of the law. We agree that commercialized organized gambling must cease throughout the county immediately.

 

This pledge subsequently turned out to be meaningless as far as the public officials were concerned. Six months later, a news article reported that Covington led the State in the number of slot machine receipts issued by the Government, with 163 listed as having paid the Federal tax. Included was a payment of $5,000 by the Lookout House on 50 machines. As of May 1950, according to the report of the McFarland committee, wire service was being supplied to 111 bookmakers in Covington.

 

On January 22, 1951, shortly after the committee's hearings in Cleveland, the Kenton. County Protestant Association sent a letter to Judge Joseph Goodenough and Commonwealth Attorney James Quill demanding a full-scale grand jury investigation of gambling. Enclosed was the list of slot machine owners and the judge was reminded of the existence of a permanent injunction outstanding against the Lookout House. The judge and the commonwealth attorney discussed the matter and agreed that it was the commonwealth attorney's responsibility to enforce the injunction. Nothing was ever done about it.

 

A representative of the Kenton County Protestant Association spent 55 minutes before the grand jury giving testimony about three dozen places that were violating the law. He told the grand jury he had seen slot machines and other gambling in practically all of these establishments, but the grand jury and the commonwealth attorney manifested no interest in the documentary he had with him and no indictments were returned. As soon as the grand jury adjourned, gambling was resumed.

 

Frequent threats of bodily harm were made against a civic leader who was spearheading a campaign against the gambling interests. Also, the plate glass front door of his home twice has been the target for containers of filth. On one occasion, gamblers operating through the Tavern Owners Association which had made a pledge of $52,000 toward the local hospital building drive, to be paid at the rate of $1,500 a month, threatened to discontinue payments on the pledge unless those promoting the campaign against gambling were persuaded "to lay off."

 

W. Sharon Florer, executive secretary of the Kenton County Protestant Association, testified that two large industrial concerns that would have employed hundreds of persons refused to locate plants in or around Covington merely because of the community's reputation as a center of wide-open gambling.

 

Leonard J. Connor, sergeant at arms of the-Kentucky State Senate since 1942, member of the elections commission for Kenton County, has operated the Turf Club in Covington since 1937. In his testimony before the committee, he admitted that he had carried on a book-making operation in the Turf Club since 1937 and that he paid $28.60 a week for wire service to a man he knew only as "Red." He said he had arranged for the wire service through W. R. Cullen of Cincinnati. He also admitted owning four slot machines purchased in 1940 or 1941 in Cincinnati but he said he stored them in his cellar in June 1951 when the grand jury was in session and the committee opened its inquiry. He said his brother was once arrested in connection with the bookmaking operation at the Turf Club; that after that the place had gone along undisturbed for years.

 

This public official further testified that his income from gambling far exceeded that from his bar. He estimated that the handbook averaged a gross of about $1,300 a week in race-track bets and that the slot machines were good for $6,000 to $7,000 a year. Asked if he intended to open up again, Connor replied that he hadn't made up his mind, he was "just waiting."

 

Testimony of the most amazing character was received from Theodore Hageman, field agent for the Kentucky State Alcohol Board. Mr. Hageman insisted that operation of a gambling establishment or the commission of any other violation of law was no basis for refusing a liquor license. The form of application for a liquor license or renewal contains a question whether there are any gambling or any gambling devices on the premises. Hageman testified that "almost 100 percent" of the applicants answer this question in the affirmative.

 

Where gambling is found on licensed premises, Mr. Hageman said, "We are not instructed to interfere with them, and have not been doing so." He maintained that the board never suspends licenses for gambling alone, although it may sometimes be included in general charges of disorder. He does not consider it his duty to bring gambling violations to the attention of the alcoholic beverage control board.

 

Hageman acknowledged that he had been active in political campaigns including one in 1950 of which he was chairman. He admitted he collected between $7,500 and $8,000 from liquor licensees "who desire to make contribution" and he estimated that 20 or 25 licensees had come through with donations.

 

Hageman's present salary is $3,840 a year and he testified that the most he ever earned was during his tenure as city manager of Covington when he was paid $5,000 annually. He ran twice for sheriff and was defeated, his out-of-pocket expenses in each campaign, according to his own testimony, approximating $5,000 to $6,000. Yet he fixes his net worth at $40,000, which includes a new unencumbered home which cost him $23,960 in 1948, two automobiles, Government bonds, other securities and some cash.

 

Hageman's testimony was especially interesting in the light of what the committee was told by John J. Moloney, who became a city commissioner in Covington in January 1950. Mr. Moloney, who is to be commended for his earnest efforts in behalf of honest law enforcement, testified that a month after he went into office he was approached by Hageman, who advised him that he was eligible to participate in a "profit-sharing plan" conducted by the gambling interests for high appointive of elective officials. Hageman said Moloney might just as well take the money because people would say he was doing it anyway. Moloney rejected this offer but was told to let Hageman know if he should change his mind.

 

Mr. Moloney said that he gradually became aware of the presence of the Cleveland syndicate in the Covington gambling set-up and was glad to see that the committee eventually had proved him to be right. He has made several attempts to drive organized and syndicated gambling out of Covington, but all of these attempts have been unsuccessful. In the spring of 1950 he prepared a statement that he intended to release at a commission meeting, demanding that organized gambling be driven out of Covington, and showed it to Mayor William Rolfes. The mayor became perturbed and told Moloney "this will put us all on the spot," urging, him to withhold it, which he did for the time being.

 

Next, Mr. Moloney wrote a letter to the city manager demanding that the gamblers be forced to cease operations and to move their equipment out of the city. An order to this effect was issued by the city manager but there was only partial compliance on the day fixed for the cessation. At about the same time, Mr. Moloney was approached by a friend, who said he had been authorized to tell Moloney that he could have complete control of the police department, all hiring, firing, and promotions, and could also have the final word on all hiring and firing in the gambling establishments if he would terminate his campaign to drive out gambling.

 

Mr. Moloney refused and continued thereafter to try to persuade his colleagues on the commission to go along with his campaign for a clean-up. But he has been completely ignored in this effort. Mr. Moloney testified that he was told that the mayor was to receive $150 a week, the commissioners $100 a week, and the city detectives $150 a month, if they would not interfere with gambling.

 

Mr. Moloney also related to the committee the story of a police officer who seized two slot machines in a Covington place of business. Cliff Brown, an associate of Brink and representative of the slot machine syndicate, rushed into the police station and berated the patrolman for his act in front of his superior officer. The patrolman not long after was suspended on a charge of drinking on duty and thereafter was harassed to the point where he quit the department.

 

In February of this year, Mr. Moloney received another indirect approach and this time a figure of $50,000 was mentioned. Whether this was a bona fide offer Mr. Moloney was unable to determine. He frequently received telephone calls threatening him for his activities and he produced two anonymous letters which had been sent to him. One of these said, "This is a warning. You had better not close Covington gambling. You and your friends will be dead. Your body will be among the missing. Leave gambling the way it is."

 

Judge Joseph Goodenough of the Kenton County court was questioned about gambling in the light of a permanent injunction granted by his predecessor in 1939 against a number of gambling establishments. No judicial notice is taken of this injunction and the Commonwealth attorney never takes steps to enforce it, although it would serve as a quick basis for stopping gambling.

 

Judge Goodenough asserted that the crime record of Kenton County is good. But he admitted that up until January of this year gambling in Kenton County had been "openly notorious." He knew that before January, slot machines, bookmaking, and the Lookout House casino were running. The committee had no difficulty in finding that they were operating after the first of January.

 

Admitting that there are never any prosecutions under the felony statute for gambling, Judge Goodenough could not explain why grand juries refused to indict. He admitted that it might be possible to indict the Cleveland mobsters under the conspiracy statute and it was suggested to Judge Goodenough that the grand jury might be "inspired" to look back into operations by the syndicate. The jurist replied, "I am not so much interested in what has gone on as I am in keeping gambling out of Kenton County, as a judge. Now my conduct, of necessity, must be restricted. I am a judge, sir."

 

Mr. Quill, in his testimony, admitted his authorship of the report of the May grand jury. The committee found it difficult to reconcile obviously contradictory portions of the report. In one section, the grand jury observed that "gambling had gone haywire" in the county, and in another it said that "at the time of our original convening, the only gambling in the county was slot machines and handbooks." Requested to explain the grand jury's failure to do anything about conditions it recognized had existed, Mr. Quill claimed that the grand jury felt it "unjust and inequitable" to return indictments for conduct that had been acceptable for years.

 

The following colloquy between Senator O'Conor, chairman of the committee, and Mr. Quill throws interesting light on the attitude of this enforcement officer:

 

Q. Mr. Quill, you are an experienced prosecuting officer and a man of wide experience generally, having been in the legislature and otherwise. It is very apparent that you are quite conversant with conditions generally and you are a man of ability. * * * I am asking you for a simple fact, whether you do not agree with us that widespread gambling activities such as have been shown here to have existed and are admitted could not exist without the connivance and the protection of law-enforcement officials.* * * * * * *

A. I would say permitted or suffered to happen. I know I tolerated a good bit of it simply because it had been there since I was born and I knew that was the way the community had grown and that is what it had all these years. I felt to improve that condition takes not only law enforcement but takes education.* * * * * * *

 

Q. Mr. Quill, wouldn't you think also that such widespread gambling operation with a large amount of money being realized from the operations could easily lead to corruption and to graft on the part of the police and other enforcement officials?

 

A. I certainly think it could, sir, yes, and maybe in many cases does.

 

Q. And do you think it might have possibly existed in this case?

 

A. I would certainly say it was within the realm of possibility.* * * * * * *

 

Mr. Quill admitted that he had never made any effort to subpena the partnership books and records of the Lookout House in Covington which is owned and operated by James H. Brink. The committee had subpenaed these records and found that for the 2-year period of 1948 and 1949, the partners' shares had been as follows: Marion Brink, wife of James H. Brink $33,860; B. W. Brink, $16,930; Charles V. Carr, $16,935; Mitchell Meyer, $20,858; John Croft, $10,429; Samuel Schroeder, $39,583; Louis Rothkopf, $41,765; Morris Kleinman, $41,765; Moe Dalitz, $41,765; Louise Tucker, wife of Samuel Tucker, $41,765; and Charles Polizzi, $33,352. Several of these names will be recognized as those of the Cleveland mob which had moved into Covington and Newport. Brink has testified that the mob sold their interests to him as of the end of 1950.

 

Mr. Quill said he had no idea that the profits of this establishment ran so high until they were dug up and publicized by this committee.

 

Mr. Quill told the committee that when he first became commonwealth attorney "there was very little sympathy" for enforcement of gambling laws, but that, as a result of this committee's exposure of the Lookout House as a syndicate operation, "people became exercised and the laws are easy to enforce now." He was reminded that the people were exercised as far back as 1939, as evidenced by the injunction that nobody bothered to enforce. His reply was that this was an action brought by the attorney general of Kentucky and the primary responsibility for its enforcement rested with the attorney general.

 

Mr. Quill asserted that gambling at the Lookout House ceased after the committee's Cleveland hearings and that he would have pressed contempt proceedings under the injunction had operations there continued. He professed to have no personal knowledge of gambling at the Lookout House since he became commonwealth attorney but acknowledged that several years ago, while he was a member of the legislature, he had lost $40 in a dice game there.

 

Sheriff Henry A. Berndt of Kenton County, when asked whether he was the chief law enforcement officer of the county, retorted: "I am the chief law enforcement officer. I am the chief fire marshal. I am the chief dog catcher. I am the chief tax collector. I guess I have probably 150 duties according to the statute." Berndt said he had nine deputies, six of whom collect taxes. The other three serve processes. Berndt obeys the statute requiring inspections insofar as it is possible. The chief deputy, he said, does the work when he can be spared from his other duties, otherwise there are no inspections. No gambling was ever found during the inspections.

 

"We do not really try to make any attempt at law enforcing," Berndt said bluntly. He claimed that he repeatedly had told the grand jury that his office could not do so and at the same time perform its other duties, too. Berndt never heard of the Cleveland syndicate until the committee exposed their interests in northern Kentucky. He has not been on the lookout for any of the members, would not know them if he saw them, and would not know where to start looking for them.

 

Chief of Police Alfred Schild of Covington testified that his chief of detectives and other members of his staff had been looking for the source of the race wire service for 4 or 5 months without success. He has never been inside the Kentucky Club in Covington so he does not know what is going on there, although he did know of a $75,000 robbery there at one time. This was the biggest haul by gunmen in the history of the city but he did not consider that it required any personal investigation by him.

 

It was Schild who told the committee that gambling clubs in Kenton County advertised in the Kentucky Peace Officers Association magazine. Asked if he thought it was all right for the magazine to accept advertisements from gamblers, Schild asserted that "they didn't advertise as gamblers," and besides they advertised in other magazines, as well.

 

Schild could not tell the committee how the gamblers receive "tip-offs" about impending raids. He conceded that his department had a rule requiring that all warrants be registered at headquarters before being served. "I don't know why. It's been a rule for years and years," he added. Schild testified that he was a friend of John Rigney but professed not to know that Rigney was a leader of the slot machine syndicate, a matter of common knowledge in Covington.

 

Turning to Campbell County, the committee heard testimony describing the commendable efforts being made to restore order in the field of law enforcement in the city of Newport, while conditions in the county surrounding Newport are allowed to run wild.

 

A reform administration came into control of the city government of Newport in January 1950. Three officials of that administration testified before the committee, namely, City Solicitor Fred Warren, City Manager Malcolm Rhoads, and City Commissioner Charles J. Eha.

 

Mr. Warren testified regarding the injunction proceedings brought by the attorney general of Kentucky against the gambling interests in Campbell County in 1943 resulting in a permanent injunction. He said that during the period of the litigation all gambling was eradicated. After the injunction was obtained, however, gambling gradually was resumed and continued unchecked until 1950. He testified that no explanation was ever given as to why no move was made to enforce the mandate of the court and he expressed the opinion that gambling casinos could not have operated too openly and regularly and for such protracted periods without protection.

 

Commissioner Eha, who was one of the candidates supported by the Newport Civic Association, related some of the difficulties experienced by the reform group in its war against the gambling interests. He declared that the citizens are now aware that the city is better off without gambling. He, too, has received threats because of his activities against gambling. City Manager Rhoads, who had been a witness at the committee's Cleveland hearings, testified again in June and July. At an executive session of the. committee held on June 20, he indicated some surprise when informed that a committee investigator had found gambling in the Alexandria Club just a couple of weeks before. When he returned for the July 23 hearing, Mr. Rhoads told the committee that he was certain that gambling had ceased there because two detectives had been stationed in the place between 10 p.m. and 2 a.m. every night to make sure no gambling went on. He said the city has had some difficulty because of "tip-offs" of projected raids but an effort is being made to determine their source.

 

The Bobben Realty Co. clearing house bookmaking operation has been broken up and a. similar outfit has been routed from the Finance Building in recent weeks. Mr. Rhoads said he has been trying to break up the wire service to bookmakers but the Ace Research Service has moved from its former location and he has been unable to learn the source from which the wire service now emanates.

 

Mr. Rhoads reiterated a statement he gave to the committee in Cleveland that he did not feel he could place any confidence in Chief George Gugel of the Newport Police Department. He has tried to cure the situation, he explained, by bypassing Gugel and using men in the department he knows to be reliable. The gamblers, he said, had also made efforts to buy him off. He told of a telephone call he received in which he was informed that if he would let things alone the gambling interests would be willing to pay $1,000 a week. The same figure, he declared, was repeated to him soon after the incident by a visitor to his office who he knew was not connected with the rackets. Telephone calls and letters containing threats of harm to him and members of his family also have been received by Mr. Rhoads.

 

The gambling interests, according to Mr. Rhoads, first try "to buy what they want." If unsuccessful they move into the second stage, which is to harass officials moving against their operations. The third is a smear campaign impugning the integrity of those who oppose gambling activities.

 

Gambling in Newport in 1949 enjoyed somewhat of a blessing from the administration then in power which adopted legislation levying certain taxes on the gambling interests. The tax bill for the Yorkshire was $8,090.40 under this measure, clearing houses paid $500, and bookmakers were assessed $250. The city treasury was enriched to the extent of $50,109.99 in 1949 but, on the eve of its departure from office, the former administration repealed the taxing ordinance. Mr. Rhoads said that the new administration would never have tolerated the special taxing system because "I cannot see any difference between a city and an individual taking graft."

 

Suppression of gambling has helped business in Newport, according to Mr. Rhoads. Bank deposits are higher and there has been a substantial increase in inquiries from industrial enterprises interested in the possibility of erecting plants there.

 

Chief of Police Gugel when called as a witness, also expressed surprise that a committee investigator had found gambling in the Alexandria Club in June because his men had told him there was none. Since the Cleveland hearings, Gugel said, he has been endeavoring to get rid of all gambling. When pressed to define specifically what course of action he was pursuing, Gugel replied, "Still issuing orders to my subordinates." Gugel was asked what he had done about the Ace Research Service, which supplied wire service to more than 100 bookmakers in Covington and more than 60 in Newport. He said he sent his detectives to the outfit's headquarters but they could not find anything.

 

Lack of cooperation on the part of Chief Gugel serves as an obstacle to law enforcement in Newport. However, the city administration is to be congratulated on the progress it is making. It is a pity that the law enforcement officers of the rest of Campbell County cannot be persuaded to follow the excellent example of the city of Newport.

 

William J. Wise, Commonwealth attorney of Campbell County for almost 9 years, was called upon to explain the widespread commercialized gambling in his section. He said, "I suppose it was just like Topsy, it just grew up. It has been in existence long before I appeared on the political scene, and I suppose it has existed by sufferance, at least that is my opinion." He confessed that he was "generally aware" of the operations of the casinos, but insisted that he has told every grand jury it was their prerogative to investigate them, although none ever did. He did succeed in getting an indictment against one member of the Cleveland syndicate, Samuel Tucker, 5 or 6 years ago, but Tucker was acquitted.

 

The committee's investigation showed that the Beverly Hills Country Club had gross receipts of $975,000 for 1948 and 1949, a net of $426,199 for that period, distributed to the following: Samuel Tucker, Moe Dalitz, Rothkopf, and Kleinman, $44,019 each; Charles Polizzi, $32,014; T. J. McGinty, $34,301; John Croft, $26,583; Harry Potter, $20,008; Mitchell Meyer, $17,150; Samuel Schroeder, $54,024; and Marion Brink, $40,017. In addition, Tucker was paid a salary of $10,000 annually from 1945 to 1948, Meyer and Potter were paid $3,900 each for 1948 and $4,110 each for 1949. The money wheels took in $70,000, chuck-a-luck, $17,000; blackjack, $51,000; craps, etc., $244,000, and slots, $69,000.

 

It is of interest to note that the partners of Beverly Hills are practically the same as in the case of the Lookout House in Covington, and that both operations include members of the Cleveland mob.

 

When confronted with these figures, Mr. Wise conceded that they were "fabulous" and admitted that he had never heard of some of the individuals named.

 

The committee found that the operations at the Yorkshire Club were even more extensive for the same 2 years, with gross receipts amounting to $1,526,000, the gross profit was $614,000 and the net income, $427,597. The following shared in the profits: Maurice Ryan, Fort Thomas, Ky., $30,018; Fred Hallam, Bellevue, Ky., $47,662; Morris Nemmo, Fort Thomas, Ky., $30,493; Robert Bergen, Fort Thomas, Ky., $24,121; Sam Gutterman, Cincinnati, $10,406; A. R. Masterson, Fort Thomas, Ky.; E. R. Lowe, Tucson, Ariz.; James H. Brink, Fort Mitchell, Ky.; Claude Hines, Fort Mitchell, Ky.; George and Frieda Bregal, Melbourne, Ky., $17,493 each; Alfred Goltsman, George Gordon, Samuel Tucker, and Ruby Kolod, all of Cleveland, $20,992 each; Abe Schneider and John Croft, Cincinnati, $34,987 and $33,092, respectively; and. George Bear, Detroit, $24,296.

 

Mr. Wise conceded that this operation was "much more sizable than any of us thought or could have imagined."

 

Sheriff Ray Diebold of Campbell Count whose principal qualification for his job seems to have been that he once served as a "good will" man for brewery, made two appearances before the committee. The first time he testified that he had never been in the Beverly Hills Club, the Latin Quarter or the Yorkshire Club, and that he had never raided them because he had been informed by the county police that there was no gambling in any of them. He had only "heard" that the Cleveland syndicate was involved in operations of the casinos and he had learned from his lawyer only a short time before the June hearing about the law requiring him, as sheriff, to inspect dance halls and roadhouses at least once a month. When he testified in July, he was emphatic in declaring he had been diligent in his inspections and promised to furnish the committee with copies of his monthly reports from then on. He still has a clear record of no arrests for gambling since he had been sheriff. The committee asked why he had never visited any of the casinos, at least as "good will" man for the brewery. He replied that the casinos use premium beers only, whereas he was stimulating business for a local product.

 

James Winters, chief of the Campbell County police, told the committee that he had reason to believe that gambling was going on in places like the Beverly Hills Club and the Latin Quarter but his men never found any when they made inspections. Pleading that he had only six men to patrol 508 miles of highway in the county, Winters said they had little time to look for gambling violations.

 

Jack Kuresman, Cincinnati public accountant who represents the Latin Quarter, Yorkshire, Beverly Hills, and the Merchants Club, testified that his office received daily sheets which showed wins, losses, expenses and the bankroll at the beginning and end of each day. He admitted that he had no means of verifying the wins and losses. Asked why he was unable to produce the records of the Latin Quarter, Kuresman said that as soon as his clients learned that the committee was interested in northern Kentucky again they came to his office and retrieved the records, together with his work sheets.