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History of the Policy Racket in Black America

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Casper Holstein

Casper Holstein

Before Modern Day Lotteries

All of the thirteen original colonies, at one time or another operated legally run lotteries. Over the years, the scandals and cheating that became associated with these lotteries forced ruling officials to enact anti-lottery laws.

By 1860 Missouri, Delaware, and Kentucky operated the only legally state run lotteries in the United States. This being the case, the way was paved for illegal lotteries and other forms of gambling to take root. From 1894 to 1964, there were no legal lotteries operating in this country.

What Is The Policy Racket?

One of the biggest money making operations regarding illegal lotteries was the policy racket. It was also called the numbers racket, the numbers game, or simply playing the numbers. This poor man's lottery operated primarily in poor Black, Latino, and Italian neighborhoods from the late 1890's well into the 1960s.

Some cities that were major cogs in the policy racket were New York, Chicago, Cleveland, Pittsburgh, and Atlanta just to name a few.

The game itself consisted of a player picking any three digit number from 0 to 999. The odds were about a 1000 to 1 against winning while the pay off might be anywhere from 600 and 800 to 1 for a winner. Bets were generally a nickel or a dime, but any amount was acceptable even that as small as a single cent.

Those who ran, owned, and controlled the policy racket were called Policy Racket Kings and in our discussion we will also learn about a Policy Racket Queen. These people, as we will see nickled and dimed their way into millions of dollars. This illegal lottery flourished during Prohibition and the Depression and did very well until state run lotteries came on the scene.

Stephanie St. Clair

Stephanie St. Clair

The Harlem Policy Racket

From about 1905 to 1915, the Harlem policy racket was controlled by Peter Matthews. Matthews was convicted of illegal gambling in 1915 and died in 1916, while serving his time. This left about an eight year void, where there was no real clear cut leader to take over the now vacant position of Policy King in Harlem.

In 1923, Casper Holstein who was born in St. Croix, Danish West Indies (now the Virgin Islands) of mixed African and Danish blood, saw the opportunity to take over the policy racket in Harlem. At his peak, Casper was making $12,000 a day from this enterprise. Like many of the policy kings, he invested his money in legitimate businesses as well. He is reported to have been worth over 2 million dollars by the 1930s.

Casper Holstein was not alone in the Harlem policy racket. His biggest competitor was Stephanie St. Croix, a Black French woman said to have migrated from Marseilles, France. In 1912, she invested $10,000 of her own money in a numbers parlor. Within a year she had amassed over $500,000.

By this time the Mafia having taken notice, started to try to muscle in on Harlem's black policy makers. They beat, extorted from, kidnapped, and murdered some policy makers and their numbers runners. In 1928 Casper was kidnapped by five men thought to be working for Dutch Schultz. A $50,000 ransom was demanded and Casper Holstein was released after three days. Casper claimed that the ransom was never paid. Shortly thereafter, he was convicted of illegal gambling. After serving his sentence, he retired later dying in 1944.

After Holstein's retirement and death, Dutch Schultz still had Stephanie St. Croix to deal with. Although he eventually got his way, it required a bloody war that took over forty lives due to gang violence. Because she had named policemen and other officials that had been paid kick backs, she was under pressure from the law as well as Schultz. Schultz did take over the Harlem policy rackets for awhile, but in 1935 he was killed by order of Lucky Luciano. Madam St. Clair as she was most often called by Harlemites, sent a telegram to Schultz's bedside saying, "As ye sow, so shall ye reap." At the time this telegram received widespread attention. Stephanie St. Clair died in 1969, just two years after New York began its state run lottery in 1967.

Ted Roe

Ted Roe

The Bronzeville Policy Racket

Bronzeville is a predominantly black area and is Chicago's south side of town. The dominant players here in the policy racket were the Jones brothers. The oldest being Ed followed by McKissak (Mack) and George. Ed owned a tailor shop and at some point decided to get into the policy racket. The Jones brothers like Casper Holstein and Stephanie St. Claire cornered the market for policy or numbers racket in Chicago. All were successful because they paid promptly and without hesitation, building a strong customer base. At their peak, the Jones brothers made between $10,000 and $15,000 a day. They funneled money into many legitimate enterprises. They had real estate holdings in Europe, Mexico, and the United States. They also had cash in twenty-five different banks and investments in some of this countries largest corporations. It is estimated that they were worth 14 million dollars.

Running the whole operation for the Jones brothers was Ted Roe. He was born in Louisiana of a black mother and Italian father. After being a bootlegger in Little Rock, Arkansas for a while, he made the move to Chicago, specifically Bronzeville.

The mob in Chicago just as Dutch Schultz did in Harlem, began to muscle in on the black policy makers. In fact, in 1946 they kidnapped Ed Jones and demanded $250,000 and the turning over to them of the policy making operation. Ted Roe did the negotiations on behalf of the Jones family. He paid the ransom but had no intention of handing over the policy racket.

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After being held hostage for three weeks, Ed Jones was finally released. At this time he made the wise decision to retire and take all of his family to Mexico to live. Ted Roe saw this as an opportunity, he took over the policy racket resisting attempts of the mob taking over. For many years he resisted and battled attempts at kidnapping and murder instigated by the mob. Some time in 1952, Ted decided to travel around openly rather than under the protection of his many body guards. One night while getting into his car, he was ambushed by at least two men both using shotguns. Ted Roe had been diagnosed with cancer and doctors had given him only three months to live.