Detroit's Numbers Racket

Today's state run lotteries are first cousins to the illegal policy rackets of the early twentieth century--known by players as the numbers game. Curious how things once illegal become legal when the government gets involved. The grass-roots game had much better odds but much lower payouts than today's state-run lotteries. To win, a player needed to match only three numbers rather than the six or seven used today with astronomical odds against winning. Then as now, some of the most avid players were the people who could least afford it.

Beginning in the 1920s, the Purple Gang-controlled numbers game in Detroit was a profitable money machine for the Bernstein Brothers and their associates who were many. Numbers runners, bag men, and accountants kept the money flowing. There was a fortune to be made from the pennies, nickels, dimes, quarters, and dollars of working-class immigrants--particularly Italians, Jews, and the Irish. Members of Detroit's black community developed into major players in the innercity numbers racket where the game was popular.

Many people made tax-free extra bucks running numbers. Seemed like everybody had a favorite number or several numbers they played daily if they had some small change. Playing was convenient, bets could be taken over the phone. People could also place more costly combination bets of any permutation of their three numbers. For example, 127 could win with 127, 172, 217, 271, 712, and 721. Every place where liquor or soda pop was consumed became a numbers drop. Every grocery store, barber shop, beauty shop, candy store, and virtually every business within a runners assigned territory was a potential numbers drop. The more money a numbers runner collected, the more money he or she made. 

The numbers game appealed to people who were not habitues of the “high-class” gambling establishments of Detroit’s high rollers, social climbers, and underworld figures that mingled nightly with unsettling familiarity. The urge to gamble was not limited to the well-heeled public and wealthy industrialists. Everyday people wanted to place bets. If they couldn’t afford to chase Dame Fortune, they were content to wink at Lady Luck.

Spare change and small bills made up the bulk of the daily take. The game was easy to play—pick three numbers ranging from 000 to 999 and wait for the daily winning number. Players placed bets with a numbers runner who collected the money and recorded the bets in a handbook with the bettor’s name and date written in. A receipt with a serial number printed at the bottom was given to the bettor to prove he or she placed the bet in the event they won. A more sophisticated version of the game we known as Keno had greater payouts but greater odds.

The odds for the basic game were one in a thousand. If you were the only person to hit that number that day, your payoff could be 600 to 1, otherwise the jackpot was split among the winners. Bagmen collected the money from the runners and took it to a central location called a numbers bank where a group of accountants processed the bets, counted the money, and passed it on to a central drop at a secret location.

At first, the numbers were drawn from numbered balls in a ball cage or three spins of a wheel of fortune. These methods could be manipulated and soon fell out of favor. Players wanted three numbers that were certified random. Bernstein’s game used the last three numbers of the United States Treasury Department balance which was printed daily in the business section of newspapers. When the Treasury Department began to round off their numbers—so they wouldn’t be a party to illegal gambling schemes—the three last digits of the number of shares traded on the New York Stock Exchange became the daily winning number. That number was found conveniently in the daily papers. Choosing today's lotto number picks have gone back to the numbered-ball drops which are televised to prevent fraud.

Accounting books seized by treasury agents in a 1940 raid of a Paradise Valley numbers drop revealed as many as 6,000 men and women were employed by Detroit numbers operators. The average payout was 16% of the take divided among the winners. The number runners who took the bets filled out the betting slips and got 25% of their daily take. The bagmen who collected the money and betting slips from the bookies took them to a secret central location. They made 10% of what they brought in. Finally, the promoters took 49% for themselves and their overhead. All of those accountants needed to be paid—not to mention the occasional bail bondsman.

Because of the large territories where the game was played, the profits were huge. But this scheme was not without its dark side. Anyone skimming money off the top, holding out on winners, compromising the operation, or attracting unwanted attention from the authorities would be quickly eliminated.

Link to the wine brick racket: https://www.blogger.com/blogger.g?blogID=7073297057923413840#editor/target=post;postID=2979020335839039617;onPublishedMenu=postsstats;onClosedMenu=postsstats;postNum=5;src=postname