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The 'numbers game', or 'policy racket', is an illegal lottery played mostly in poor neighborhoods in U.S. cities, wherein the bettor attempts to pick three or four digits to match those that will be randomly drawn the following day. The gambler places his or her bet with a bookie at a tavern, or other semi-private place that acts as a betting parlor. A runner carries the money and betting slips between the betting parlors and the headquarters, called a "numbers bank" or "policy bank". The name "policy" is from a similarity to cheap insurance, both seen as a gamble on the future.^[1]

Contents

History

Winning number

Harlem

Manipulation

Odds and payout

"Dream books"

Legal version

Policy dealers

Policy reformers

Timeline

See also

References in periodicals

Further reading

References

History

The game dates back at least to the beginning of the Italian lottery, in 1530. Policy shops, where bettors choose numbers, were in the U.S. prior to 1860. The penny and dime games opened up numbers to even the poorest. One of the game's attractions to low income and working class bettors was the ability to bet small amounts of money. Also, unlike state lotteries, bookies could extend credit to the bettor. In addition, policy winners could avoid paying income tax. Different policy banks would offer different rates, though a payoff of 600 to 1 was typical; since the odds of winning were more like 1:1,000, the expected profit for racketeers was enormous. In the northeastern United States this game was known as the "Nigger Pool", because of its presence in poor African-American communities.^[2] Among Latino communities in the same area the game is called ''"bolita"'' ("little ball"). In 1875, a report of a select committee of the New York State Assembly stated that "the lowest, meanest, worst form ... [that] gambling takes in the city of New York, is what is known as policy playing."^[3]

Winning number

One of the problems of the early game was to find a way to draw a random number. Rigging games to cheat players, and drive competitors out of business, led to the use of the last three numbers in the published daily balance of the United States Treasury. When the Treasury began rounding off the balance many bookies began to use the "mutual" number. This consisted of the last dollar digit of the daily total handle of the Win, Place and Show bets at a local race track, read from top to bottom.
For example, if the daily handle was:

★ Win $1001.23

★ Place $582.56

★ Show $27.61
then the daily number was 127.
By 1936, "The Bug" had spread to cities such as Atlanta where the winning number was determined by the last digit of that day's New York bond sales. ^[4]

Harlem

Francis A. J. Ianni, in his book ''Black Mafia: Ethnic Succession in Organized Crime'' writes: "By 1925 there were thirty black policy banks in Harlem, several of them large enough to collect bets in an area of twenty city blocks and across three or four avenues." By 1931, there were several big time numbers operators, James Warner, Stephanie St. Clair, Casper Holstein, Ellsworth Johnson, Wilfred Brandon, Jose Miro, Joseph Ison, Masjoe Ison and Simeon Francis. [1]

Manipulation

Dutch Schultz is said to have rigged this system, thanks to an idea from Otto Berman, by betting heavily on certain races to change the Win, Place and Show numbers that determine the winning lottery number. This allegedly added ten percent to the Mob take. ^[5]

Odds and payout

A player's chance of winning on one number is one in 1,000. In illegal numbers games, depending on time and place, winning on most numbers may pay off as high as 800 to 1 or as low as 600 to 1. Typically, certain more popular numbers, known as cut numbers, have reduced payoffs, typically as much as 20% less than other numbers. The difference between the dollar amount of the tickets bought and the amount paid out is the vigorish, which the bookie keeps to cover overhead and make a profit for himself.

"Dream books"

Beginning in the 1890s, books of dream interpretations popular in African-American culture often included lists of policy numbers to associate with certain dreams or dream-images. Some of these, such as ''Aunt Sally's Policy Players Dream Book'', are still in print. [2]

Legal version

Today, many state lotteries offer similar "daily numbers" games, relying typically on mechanical devices to draw the number. The state's rake is typically 50% rather than the 20%-40% of the numbers game. (Pennsylvania even calls its daily lottery "Daily Number".) Despite the existence of legal alternatives, some gamblers still prefer to play with a bookie for a number of reasons. Among them are the ability to bet on credit, better payoffs, the convenience of calling in one's bet on the telephone, and the avoidance of income tax.

Policy dealers

★ Sai Wing Mock, operator of policy game in Chinatown, New York in the 1900s

★ Albert J. Adams, operator of policy game in New York City in the 1900s

★ Peter H. Matthews, operator of policy game in New York City in the 1900s

★ Joseph Vincent Moriarty, operator of numbers game in Hudson County, New Jersey in the 1950s

Policy reformers

★ Lexow Committee, uncovered illegal gambling in New York City

★ Charles Henry Parkhurst

Timeline

★ 1860 Private lotteries flourish in large cities

★ 1894 Lexow Committee investigates

★ 1901 Albert J. Adams arrested in New York City

★ 1906 Albert J. Adams takes his own life

★ 1916 Peter H. Matthews dies in prison

★ 1964 New Hampshire starts the first modern US lottery

See also

★ The Association for Legalizing American Lotteries

★ Bookmaker

★ Bolita

References in periodicals

★ New York Times; May 19, 1883, Wednesday; "Policy-dealers Punished."

★ New York Times; October 12, 1894, Wednesday; "Paid $500 To Schmittberger; Forget Says This Tribute Went To The Police Captain. The Agent Of The French Line Tells The Lexow Committee Of The Money Transaction. Complete Exposure Of The Policy Business In This City. A List Of 600 Places Where The Gambling Was Conducted. Only One Precinct Free From The Evil."

★ New York Times; February 25, 1934, Sunday; "Game the Police Are Seeking to Curb Draws Victims From the City's Poor." The police offensive recently launched against the policy game has resulted in numerous arrests and the raiding of a "bank" in which three sacks of "slips" were discovered. Central depots in Harlem have also been closed and many collectors and bankers driven to cover.

★ Lawrence J. Kaplan and James M. Maher; "The Economics of the Numbers Game" in American Journal of Economics and Sociology; October 1970

Further reading

★ Nathan Thompson; Kings: The True Story of Chicago's Policy Kings and Numbers Racketeers An Informal History; The Bronzeville Press ISBN 0972487506 (2003)

References

1. Carl Sifakis, ''The Mafia Encyclopedia''. Facts on File, 2005, p.336
2. Alex Hailey, ''The Autobiography of Malcolm X''. Ballantine, 1999, p.90,
3. Holice and Debbie, ''Our Police Protectors: History of New York Police''
Chapter 13, Part 1. Accessed on 4/2/2005
4. ''Associated Press'', February 12, 1936
5. Sifakis, pp.38-9