There was a time when horse racing ranked with baseball and boxing among the nation’s most popular sports. In the 1930s and '40s, there was a vibrant circuit of East Coast racetracks, and racing season provided working-class people with hints of glitz and glamour. Regular folks could enjoy the ponies alongside celebrities, politicians, horse owners and jockeys.
In the years leading up to World War II, horse racing also represented nearly the only opportunity for legal gambling in the United States. And with thousands of people wagering millions of dollars on most race days, organized crime was not far behind: gambling created an inevitable link between the “Sport of Kings” and the kingpins of crime.
In cities like Chicago, mobsters infiltrated and even ran some major tracks, and organized crime often controlled profitable contracts for track services across the country. The cash-heavy betting windows at the tracks also provided a convenient way to launder money. And for decades, the racing circuit was dogged by persistent rumors of nefarious efforts to fix races by bribing jockeys or doping horses.
Also, the race results were broadcast through closed networks of telegraph and telephone wires, boosting poolrooms and off-site gambling parlors in illegal hideouts across the country.
Daily track results also served as a source of the random numbers used to determine winners in the numbers games which continued to spread like wildfire in cities across the country in the '30s and '40s.
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In 1940, Harry Donovan was riding high as one of Richmond’s top numbers kingpins. He had survived the police crackdowns on illegal gambling in the '30s, and the resulting turmoil allowed him to co-opt smaller operators into his expanding operation. He quickly began to look for ways to hide from the authorities the true source of his unbelievable cash flow.
Stashing the cash in a bank would put him on the radar of the IRS, but he needed some way to convert the coins and small bills wagered each day into larger denomination currency. So Donovan forged a relationship with local banker W. Dayton Dixon of Southern Bank & Trust: once every three weeks or so, Donovan would call Dixon and deliver sacks holding up to $10,000 in coins and small bills to Southern Bank. Bear in mind that $10,000 in 1940 is the equivalent of $184,000 in today’s dollars.
“We would exchange them for hundred dollar bills, five hundred dollar bills and occasionally thousand-dollar bills, but mostly hundred dollar bills,” Dixon would later testify. Dixon said he asked Donovan to call ahead because the bank frequently had to tap its proximity to the Federal Reserve Bank of Richmond to make sure it had enough large denomination bills on hand to accommodate Donovan's unique needs.
Having tangled once with the IRS over his illegal gambling income, Donovan also hired Richmond accountant A.M. Toler to keep his books and handle his taxes. Toler came up with a system to estimate the percentage of the daily wagers which were kept as commissions by Donovan’s numbers writers, and he even prepared W-2 income statements for Donovan's numbers runners at the end of every year.
During a later trial, Toler would recall the first time he prepared the income taxes for his unusual new client: “I asked him if he was paying by check and he said no, that he always paid his taxes by cash.” Toler said Donovan pulled a roll of bills from his pocket that was the size of a double fist. “I don’t remember the amount of the tax, but it was somewhere in the neighborhood of $85,000 or $86,000,” Toler said.
By 1940, Donovan’s family had moved from their two-bedroom duplex in a working-class neighborhood in Carytown into a grand house on a corner lot on Cary Street Road – one of the most desirable addresses in the city. The 5,400-square-foot brick home featured gabled windows, a slate roof, and a backyard garden enclosed by a brick wall. At the time, Donovan was 31-years-old. His wife, Louise, was 30, son Billy was six and son Warren was aged two. There was enough room in the fancy new house for Donovan’s mother-in-law to continue live with them, too.
About this time, Donovan got very interested in the horse business as a useful way to invest and hide his cash. But for Harry Donovan, the horse business was no idle hobby: he purchased a farm on the outskirts of the city in undeveloped Henrico County where he built a barn, a track, and paddocks to train thoroughbred horses.
Published reports indicate Donovan spent about $50,000 on the purchase of several racehorses in the 1940s, paying as much as $10,000 for one of them. He hired trainers, groomers and others to handle the horses and maintain the property. Donovan’s farm, which was known locally as The Horse Pen, would later lend its name to what is today called Horsepen Road.
“Nothing will drain your account like a horse farm,” said James Richmond, the executive director of the Goochland County Historical Society. Goochland has always been the epicenter of horse country in central Virginia. “You’ve got to feed the horses. You’ve got to take care of the horses. You’ve got to keep these barns up. There’s a lot of money that just drains right out of your account,” Richmond told me during a 2019 interview.
Through much of the 1940s, Donovan's name appeared often in the sports columns as the owner of thoroughbred horses competing at racetracks in New York, Delaware, Maryland and Florida. And by 1945, the scrappy street fighter and former bootlegger had sufficiently reinvented himself to be noticed by the society page of his hometown paper, The Richmond Times-Dispatch, which chronicled the travels of the city’s wealthiest and most influential citizens. That’s how we learn that Harry and Louise Donovan traveled with friends to The Claridge resort in Atlantic City in the weeks before Labor Day 1945. The following year, the RTD society column reported the Donovans were returning to Atlantic City for an extended late summer stay at The Hotel Traymore.
In September 1946, Donovan’s five-year-old thoroughbred named Economical posted a win in the seventh race at New York’s Belmont Park. More than 22,000 people were at the track that day. The following February, the Donovans traveled to Florida for what the local racing columnist described as an extended vacation during racing season at the swanky Hialeah track. Just a few weeks later, Economical won another race at Gulfstream Park near Miami with more than 10,000 race fans watching from the stands.
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Like all able-bodied American men in the early 1940s, Donovan was required to fill-out a military draft form when the United States entered World War II. He indicated he was the owner of a company called Barber Veterinary Supply Co., and that year's Richmond phone directory listed his occupation as “druggist.” Running a veterinary supply house gave him easy wholesale access to the specialized equipment and medicines needed for what was becoming a substantial horse breeding and training operation.
Interestingly, at about the same time there was some speculation that America’s entry into World War II might help diminish the popularity of the illegal numbers game. In the spring of 1942, an enterprising reporter at the Richmond Times-Dispatch wrote a story under the headline “War Delivers Knockout Blow to Numbers.” The article speculated that war-time rationing of fuel and tires was crimping the numbers rackets because the mid-level pickup men required automobiles to efficiently retrieve play slips every day.
"It is necessary for a pick-up man to call upon dozens of writers within specified time limits to gather in the daily receipts and deliver them to the operator before the racetracks begin to report the numbers for the day. Hence the essential need is for fast transportation," according to the RTD story. The article ended with this unsupported statement: “It is freely predicted by gambling circles here that the numbers racket will be as dead as the dodo hereabouts in a short time.” That prediction was 100% wrong.
Richmond’s population exploded during World War II, fueled by thousands of job opportunities at the city’s huge cigarette factories and the sprawling DuPont plant in South Richmond. More working people + higher discretionary income = more spending on all forms of entertainment, including gambling.
In the fall of 1948, the Richmond Times-Dispatch published another big expose on illegal gambling beneath the headline “Numbers Racket Seduces Many With Hope of Easy Gain.” The newspaper reported two big "books" were operating in the region, and the operators maintained a telegraph connection directly to the Maryland racetracks to capture each day's winning three-digit number.
"There is a million-dollar year industry flourishing in Richmond that’s never even mentioned by the Chamber of Commerce. Thousands of Richmonders can tell you all about it, though, for they are part of it – the sucker part. The industry is the numbers racket," the newspaper reported. "The procedure for making bets is simple. If a player wishes to part with a few cents, all he has to do is look up a numbers writer. In downtown Richmond, that is not a difficult thing to do. Just about every office building, factory, shoeshine parlor, confectionary or lunch counter has a writer, some working full time while others do the work as a sideline to their regular employment.”
The article appeared as Donovan continued to enjoy his new social status at tracks up and down the East Coast. The IRS also continued to keep a careful eye on the Richmond numbers racket which was funding his lifestyle. During a tax audit in the spring of 1948, IRS agents inventoried the contents of safes at Donovan’s home and farm and also inspected two bank safe deposit boxes registered in his name. The IRS would later disclose that agents counted about $16,000 in cash in a safe at his farm, which Donovan satisfactorily explained by pointing to the substantial operation which was underway there. The IRS did not find anything that aroused their suspicions inside the safe at his home or in the two safe deposit boxes.
Sometime in 1949, Donovan would reach an agreement with a prominent local family to sell his Horse Pen farm property in Henrico County to make way for the construction of the U.S. headquarters of Reynolds Metals Co., the makers of the foil used in cigarette packaging as well as the popular Reynolds Wrap kitchen product. Today, the site hosts the headquarters of U.S. tobacco giant Altria.
Donovan sold the farm, but he was not done with horses and racing. He would relocate his horse operation westward to Goochland County, where he purchased a large country estate on the banks of the James River about 25 miles outside of the city. The historic property, which pre-dated the Civil War, was named Thorncliff.
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