Arnold Rothstein: gambler, gangster and genius

Arnold Rothstein: gambler, gangster and genius

Arnold Rothstein was a gambler, a gangster and a genius. He was the original Wise Guy.

Born in Manhattan, NY, in 1882, Arnold grew up in an era when men like steel magnate Andrew Carnegie, railroad mogul Cornelius Vanderbilt, and oil czar John D. Rockefeller were building industrial America. They would become known as “Robber Barons” for the ruthless tactics they used to control The Game, many of which are unlawful today. Similarly, Rothstein brought together the diverse elements of the underworld and fashioned them into a highly profitable industry whose products and services were illegal. His contribution to 20th Century America was organized crime.

As a youth Arnold rejected the Jewish heritage of his parents. “This is America, not Jerusalem. I’m an American”, he declared. He was indeed; a courageous, ambitious, self-confident risk-taker, Arnold left home at 16.

Living on the streets of New York, young Rothstein discovered a passion and talent for gambling. He’d shoot craps for pennies and nickels. Pool halls where gamblers gathered became Arnold’s hangout. In between making bets and making book, pool became another source of income as he developed into one of the best players in the game.

Although only a teenager, Rothstein’s reputation as a gambler grew in proportion to his bankroll. He soon started lending money at high interest rates and employed a bodyguard / thug to collect from reluctant losers.

Rothstein was also a major player, shooting craps, betting horses, playing pool and poker. On one occasion, at the conclusion of a 32-hour pool game against the champion from a Philadelphia club, he won $4,000 from the champ plus another $6,000 in side bets.

In 1910, Rothstein opened his first gambling house in a brownstone on West 46th Street. He converted it into a first class nightclub and casino. “Diamond Jim” Brady’s son dropped $40,000 between the faro games and the roulette wheel one evening. After a night of bad luck, Percival Hill, of the American Tobacco Company, gave Rothstein an I.O.U. for $250,000. By 1914, Rothstein had politicians from Tammany Hall and many in the NY Police Department in his pocket. He organized illegal bookmakers into a syndicate which set the spread and covered both sides of the action then split the winning percentage from the total bets placed.

As the kingpin of illegal gambling, Rothstein was commonly thought to be the man responsible for fixing the 1919 World Series between the Chicago White Sox and the underdog Cincinnati Reds. The eight Chicago players who conspired to throw the Series were eventually barred from baseball for life.

Rothstein insisted he had nothing to do with fixing the Series. Testifying before a Grand Jury, he admitted he was invited in on the deal. “I wasn’t in on it, wouldn’t have gone into it under any circumstances and didn’t bet a cent on the Series after I found out what was underway.”

Despite the fact he was cleared, his name was forever linked to the scandal. Rothstein owned a stable of horses and was a heavy horse bettor. On one occasion, he decided to enter one of his own horses, Sidereal. He got more than forty track employees to place bets on his horse for him. Sidereal won the race and Rothstein collected $850,000!

In addition to his gambling empire, Rothstein invested in numerous legitimate ventures including ownership of more than a thousand NY apartments, several hotels, racetracks and he was the financial partner for nightclubs, restaurants and cabarets. His “partners”, of course, had to purchase their supplies, linens, silver, etc.

from legitimate companies owned by Rothstein. Through gambling Rothstein became the financier for numerous illegal operations. He provided money, police and political protection for much of the criminal activity in the Eastern U.S. As one biographer concluded, “He put crime on a corporate basis”.

In 1920, Prohibition gave rise to widespread unlawfulness, gangsters and outrageous profits. Nevertheless Arnold shunned the booze business. An organization man, he concluded there was little hope of controlling it. Instead, Rothstein decided to devote his efforts to organizing the wholesale illegal drug trafficking business in the country. In its infancy drugs were still a small enough industry for him to take over and control. But Rothstein never made any real money in the narcotics business because he died before he finished putting it together.

In 1928, while dining with writer Damon Runyon at Lindy’s, the king of crime got a phone call. Arnold said he had to meet someone at the Park Central Hotel. Waiting in the lobby for Rothstein, Runyon heard a gun shot. Apparently, at the end of a three day high stakes poker game several months earlier, Rothstein owed $320,000. Convinced the game was fixed, he refused to pay up and walked out.

Weeks later, he was called to the Park Central by one of the players in the marathon game. When Rothstein entered room 349, he was shot once in the lower abdomen. Arnold staggered down the back stairs holding his gut and asked a cabbie to take him home. Instead an ambulance was called and he was taken to the hospital.

Asked by police who it was that shot him, Rothstein replied, “I’ll take care of it myself”. However, a few days later on Election Day, he passed away, never disclosing the name of his murderer.

Ironically, Arnold had bet heavily on the election and would have collected $570,000 had he lived.

Mark Brown
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