As the United States grappled with the economic and social fallout following the Great Depression, Prohibition and its eventual repeal, many American communities also struggled with the growing popularity of gambling: illegal gambling parlors, a proliferation of slot and slot-like machines, and the rapid spread of the numbers rackets. For policymakers, this resulted in some tortured efforts to define the distinction between legal gaming and illegal gambling.
Perhaps nothing illustrates the challenge better than the efforts in the 1930s and 40s to blackball pinball. That’s right: pinball. In the earliest versions of pinball, players were completely at the mercy of chance: pulling a spring-loaded plunger projected a ball onto a game board, and pins or nails inserted in specific places guided the ball to scoring areas. The path of the ball was not within a player’s control, so it met the legal definition as a game of chance.
Coin-operated versions of pinball machines began popping up in stores, bars, barbershops and bowling alleys across the nation in the early 1930s, providing what was advertised as harmless amusement in exchange for a player’s nickels and dimes. The industry began aggressively marketing pinball machines as “trade stimulators,” persuading business owners that the games would attract customers to their stores who would stay longer and spend more if the machines offered prizes such as cash, free replays, packs of gum and cigarettes.
But as the devices began proliferating in thousands of commercial spaces -- and as more and more children were spied feeding coins into the machines -- moral crusaders and municipal reformers began to view pinball as little more than a dressed-up version of the much-maligned, and largely illegal, slot machine.
In 1934, the Virginia General Assembly had acted to outlaw slot machines just weeks after The Richmond Times-Dispatch published a front-page expose on the growing prevalence of the "most efficient gambling devices which the ingenuity of man has devised." The newspaper said it had counted 600 slot machines in the Richmond area alone, and estimated they were swallowing up to $1 million a year -- “$5 a year for every man, woman and child in the city.”
"These 600 machines, gaudily decked-out with paint and nickel, seem innocent enough affairs. You put in a coin, you pull down a lever, and when the machinery stops spinning you get a package of mints and perhaps a few slugs," the RTD reported. "It is a dive which swallows voraciously hundreds of coins a day, and disgorges occasionally, only to swallow again.”
The 1934 ban on slot machines in Virginia was followed by a flood of re-engineered pinball devices in the market. It perhaps was first example of the coin-operated machine industry's ability to cleverly navigate around local ordinances and state gambling laws. For instance, when some officials decided that cash payout pinball prizes met the legal standard for illegal gambling, manufacturers shifted from coins to "slugs" which could be redeemed for store merchandise instead. When policymakers broadened their legal approach to target any wagering linked to a “game of chance,” manufacturers added flippers and bumpers so that pinball machines would meet the legal definition of a “game of skill” instead. There even was litigation about whether pinball's free replay prizes represented a value greater than the player's initial investment.
"In no field of reprehensible endeavor has the ingenuity of man been more exerted than in the invention of devices to comply with the letter but do violence to the spirit and thwart the beneficient objects and purposes of laws designed to suppress the vice of gambling,” bemoaned a Missouri appeals court judge in a celebrated ruling on gambling devices. “Be it said to the expounders of the law that such fruits of inventive genius have been allowed by the courts to accomplish no greater result than that of demonstrating the inaccuracy and insufficiency of some of the old definitions of gambling that were made before the advent of the era of greatly expanded, diversified, and cunning inventions."
The rapid proliferation of the popular pinball machines caught the attention of Fiorello LaGuardia, the pugnacious and flamboyant mayor of New York City from 1934 to 1945. LaGuardia called them “insidious nickel-stealers." He criticized the manufacturers (many of them based in Chicago) and the distributors (some had rumored ties to organized crime) as “a racket dominated by interests heavily tainted with criminality.”
New York City Police Commissioner William P. O’Brien smashes illegal pinball machines in a Brooklyn warehouse in the 1930s. (Credit: Bettmann/Getty Images)
Mayor LaGuardia’s administration made a spectacle of confiscating and destroying hundreds of pinball machines. The mayor said the popular machines were designed "to take money from the pockets of school children,” and he blamed the industry for increased gambling, juvenile delinquency and what he saw as a creeping moral decay in his city. LaGuardia also alleged that the placement of the machines at times was controlled by criminal racketeers who used strong-arm tactics to force store owners to install their machines.
So it was big local news in mid-1936 when Richmond officials took action to address the growing public concerns over “those fascinating pinball machines into which thousands of Richmonders place nickels for a slim chance of getting a dime to $1.50 in return.”
A front-page story in the Times-Dispatch on May 19, 1936 reported that Commonwealth’s Attorney T. Gray Haddon had summoned several pinball machine distributors to his office and told them he would give them "an opportunity to clean their own house.” Haddon told his assembled guests about the “daily complaints” the prosecutor's office was receiving about pinball machines. He also pointed to a small but consistent number of recent court rulings in which Richmond judges had determined that pinball machines were, in fact, illegal gambling devices.
“If a person deposits a coin solely for amusement knowing he has no chance of winning anything, the machines are perfectly legal … but if they pay off they are illegal,” Haddon reminded the pinball distributors. Appropriately chastened by a stern lecture from the region's leading prosecutor, the operators agreed to modify their machines and their business practices. They also promised to ban pinball play by children younger than 16.
“It was agreed to disconnect the apparatus in the machines which permits slugs to be dropped, to instruct operators in stores not to pay off, and to prohibit the game to children. We will proceed to do this immediately,” a lawyer for the pinball operators told the Times-Dispatch.
May 20, 1936: “Those fascinating pinball machines into which thousands of Richmonders place nickels for a slim chance of getting a dime to $1.50 in return won’t pay off at all from today on, Commonwealth’s Attorney Haddon announced yesterday morning.” [Credit: Richmond Times-Dispatch]
One day after the Richmond prosecutor brokered this arrangement with the city’s pinball operators, about 60 police officers and federal agents secretly assembled downtown for a series of raids targeting Richmond’s growing illegal numbers racket. Following a four-month investigation, federal, state and local authorities had planned carefully orchestrated strikes at 16 locations in the metro Richmond area allegedly linked to a half-dozen of Richmond’s gambling kingpins -- including Harry Donovan.
Donovan had pivoted from bootlegging to the numbers game in 1933, and he was steadily building his gambling enterprise alongside at least five other local syndicates. Authorities estimated at the time that the daily numbers racket was a $1 million annual enterprise which was ensnaring thousands of Richmonders every day of the week. In fact, a newspaper expose in 1934 authoritatively reported that nickel, dime and quarter numbers bets could be surreptitiously purchased at just about every lunch counter, newsstand, business office and factory in Richmond.
At the time of the big 1936 crackdown, Harry Donovan and his wife, Louise, their three-year-old son Bill, and Donovan’s mother-in-law lived in a recently purchased corner duplex on Grayland Avenue, two blocks from the Carytown shopping district. “It only had seven rooms, but it was a mansion to me,” Louise would later say. “I loved it very much.”
The raids began at midday and lasted well into the evening. Authorities didn’t reach Donovan’s house in Carytown until about 8:00 PM that night. “They came into my home, didn’t give us any warning, just walked into our home,” Louise would later complain.
The Donovans complied with a request to open a small floor safe inside the Carytown home, and Treasury agents confiscated $8,500 in cash -- the equivalent of more than $155,000 in today's dollars.
The Richmond News Leader reported the stash took the form of 85 "crisp $100 bills." Agents also confiscated the gold rings Louise was wearing on her fingers. An inventory of the contents of the Donovan home listed other more commonplace possessions: two overcoats, four men’s suits, seven dresses, one bathrobe and one baby blanket. Harry was arrested on charges of promoting an illegal lottery.
About a month later, Donovan was acquitted on the criminal gambling charge in a local court, but several of his employees were convicted and fined for their roles in his illegal lottery.
Undeterred, federal authorities decided to pursue tax evasion charges against Donovan. After examining his assets and bank accounts, the IRS figured he owed the federal government $185,000 in unpaid taxes, interest and penalties on unreported gambling income from 1933, 1934 and 1935. That’s the equivalent of $3.3 million in today’s dollars, so it’s no wonder Donovan decided to hire a lawyer to fight the IRS assessment all the way to Washington.
During his 1938 hearing before the U.S. Board of Tax Appeals in Washington, Donovan spoke freely about many of the operational details of his illegal numbers business. He already had been cleared of the criminal charges, and the hearing officer ruled that his testimony in tax court could not be used against him by local or state authorities. However, that didn’t stop Richmond police from sending detectives to Washington to monitor every word he said.
Donovan would admit under oath that he was “violating the laws of Virginia every racing day,” as he put it -- an acknowledgment that he used horse racing results telegraphed to Richmond by a Washington bookie to set the winning numbers in his daily lottery games. He testified he employed as many as 30 “pickup men” to collect thousands of betting slips he sold across the city each day. He said he accepted bets as small as one penny, but most were in the 5, 10 or 15-cent range. After paying winners and covering expenses and commissions paid to his small army of writers, pickup men and count house workers, authorities figured the numbers kingpin was netting about 20 percent of each day’s take.
Donovan adamantly refused to disclose the address or unlisted phone number for his headquarters operation where the numbers slips and cash were delivered and processed each day. “That would be the same as sending my men to jail,” Donovan protested, apparently fully aware that Richmond police officials were listening to his testimony. The hearing examiner agreed.
Donovan testified he started running numbers in 1933 and said his first day’s profit was $15, rising to $50 per day after the first six months. By 1935, he testified, his annual income from gambling was about $7,500, which equates to about $135,000 in today’s dollars. He admitted his gambling income in 1936 was "much greater” than that.
Donovan said his numbers game was known on the streets of Richmond as “The Reliable Book," a brilliant bit of branding which reflected his reputation for prompt payouts to winners. But because of the lack of reliable financial records, the IRS recognized that it had a relatively weak case. The government ultimately agreed to settle its tax dispute with Donovan for about $16,600: that’s less than ten cents on the dollar from the initial IRS claim of $185,000 in unpaid taxes, interest and penalties.
So as the 1930s roared to a close, Harry Donovan found himself sitting in a pretty good spot: his bootlegging days were behind him, and the numbers racket continued to prosper. As a result of the 1936 crackdown, several of Richmond’s smaller numbers operators either closed or consolidated behind the two biggest operators, and one of them was Donovan's. He had successfully dodged a criminal conviction after the big 1936 roundup, and he had battled the IRS to a very favorable settlement in the related tax case. His young family was growing, too: a second son, Warren, was born in April 1938.
As 1940 approached, this first-generation Irish-American, the youngest of eight children of a tenant farmer, began to plan an ambitious future. Harry Donovan decided it was time to do something with his criminal profits: maybe a bigger house in a nicer neighborhood -- perhaps a few legitimate investments to ensure financial security and maybe even provide a fig leaf of social acceptance for his growing family.
The 1940s would turn out to be very, very good for the Richmond numbers boss.
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Fascinating read. Thank you.