Underground Gambling in Black America: 1920s–1970s

Origins & context

To understand why underground gambling flourished in Black communities, we have to see what doors were closed:

• Economic exclusion: Banks, insurance, formal investment opportunities, even many small business loans were often inaccessible to Black people under Jim Crow, redlining, segregation, and racial discrimination.

• Segregation & limited social space: In many places, Black neighborhoods were isolated from “mainstream” economic and entertainment circuits. So there was a demand for local forms of entertainment and risk-taking.

• Cultural traditions of risk, games of chance: Lotteries, dice, informal betting are not new—they’ve been part of Black folk culture, diaspora practices, and communal leisure for a long time.

In rural and urban Black areas, “juke joints” (informal social halls, dance halls) often included gambling, drinking, music, dancing. Wikipedia These spaces were “private retreats,” ways for people to gather away from white oversight and the everyday pressures of segregation. Wikipedia+1

The “numbers racket” / “policy” / “the game”

One of the most documented forms of underground gambling in Black communities in the 20th century was the numbers game (sometimes called “policy” in earlier forms). Here’s how it generally worked:

• People would bet small sums (often pocket change) on a number (say 3 digits).

• The winning number might be derived from a publicly known source (e.g. financial tables, daily stock index, or a published number) to reduce claims of cheating.

• Collectors (“runners”) would go door to door or operate from small shops, collect bets, and pay winners.

In New York, particularly Harlem, by the 1920s the numbers game had become a major industry in the Black community. By mid-1920s, there were dozens of “bankers” (i.e. operators) in Harlem. Business Insider+3Wikipedia+3clcjbooks.rutgers.edu+3 The wealthiest operators (called “Kings” or “Queens”) sometimes owned real estate, cars, and invested in their communities. For example, Casper Holstein is one such figure

— he used part of his proceeds to fund charitable efforts and support Black advancement. Wikipedia+2Business Insider+2

Then there’s Stephanie St. Clair (“Madame St. Clair”) in Harlem,

a well-known woman leader in that underground economy. She ran numbers operations in the 1920s–1930s, resisted corruption, and used her wealth and influence to advocate for the Black community. HISTORY+2Wikipedia+2 She funded local causes, publicized police corruption, and tried to keep the operations under some self-discipline. Business Insider+1

In Chicago, too, Black operators ran gambling operations, slot joints, etc. The Black gambling “king” of Chicago used profits to expand real estate holdings. The Paris Review+2clcjbooks.rutgers.edu+2

These underground operations were risky — raids, bribery, violence were part of the game — but they were resilient and adaptive. clcjbooks.rutgers.edu+2Wikipedia+2

Mid-20th century: growth, adaptation, conflict

From the 1930s through the 1950s and into the 1960s:

• The numbers game continued to grow in many Black urban centers (Harlem, Chicago, Detroit, Philadelphia). clcjbooks.rutgers.edu+2DOI Resolver+2

• Operators often had to deal with organized crime incursions (Italian Mafia, Jewish syndicates, or larger criminal groups trying to exert control over “the rackets”). For example, St. Clair’s operations clashed with Dutch Schultz and later mob interests. Wikipedia+2clcjbooks.rutgers.edu+2

• There was internal evolution: more sophistication, reconciling the need for security, cutouts, paying off corrupt police or officials, compartmentalization. clcjbooks.rutgers.edu+2DOI Resolver+2

• Also, some operators acted as local benefactors: giving loans, investing in Black businesses, supporting social uplift in their neighborhoods. The “numbers kings/queens” sometimes assumed quasi-elite status locally. Business Insider+3Wikipedia+3clcjbooks.rutgers.edu+3

By the 1960s and 1970s, pressures increased: law enforcement, changing public attitudes, the rise of social welfare programs (though imperfect), and new legal gambling forms. Some of the underground systems began to weaken or be forced to adapt. Scholarly Commons+3clcjbooks.rutgers.edu+3gamblingandthelaw.com+3

In Philadelphia, for instance, the “Black Mafia” network in the late 1960s and 1970s was deeply involved in gambling, extortion, numbers running, and other illicit economy activities. Wikipedia

Transition Toward State-Run Lotteries & Legal Gambling

By mid- to late 20th century, many states began legalizing lotteries (and later casinos, bingo, etc.). Why?

• Revenue incentives: States saw legalization as a source of “new” revenue without raising taxes. Legal gambling lets the state levy it, regulate it, and capture a portion of the “take.” LAW eCommons+4CyberCemetery+4gamblingandthelaw.com+4

• Political winds / normalization: As social attitudes around gambling shifted, it became more politically acceptable (or, at least, more lobbyable). gamblingandthelaw.com+1

• Pressure to reduce black market: Legal forms offered an argument: regulate it, control it, reduce crime.

• Expansion of state role in welfare / public goods: States wanted more diversified revenue streams, especially where tax structures were tight.

So lotteries became a controlled, legal alternative (or complement) to underground gambling. The state versions borrowed many mechanics: people bet on numbers or combinations, there’s a draw, prizes, etc.

By 1996, gambling (lotteries + other legalized forms) had become a major revenue stream: state lotteries alone took in huge sums. Scholarly Commons+3CyberCemetery+3JSTOR+3

The wave of legalized gambling continued: off-track betting, casinos, video lottery terminals. gamblingandthelaw.com+2Scholarly Commons+2

Now, state lotteries exist in almost every U.S. state (except a few). Scholarly Commons+2CyberCemetery+2

Positives / Benefits Underground Gambling Brought to Black Communities

While it’s not all fairy tales (there was exploitation, risk, violence, corruption), there were positive roles that underground gambling played — particularly in communities starved for economic opportunity. Here are some:

1. Capital & financial circulation within the community

   • The money bet and paid out often stayed largely within the Black community, rather than being siphoned off to white-controlled banks, external investors, or distant interests.

   • Some operators became local financiers or lenders, offering micro-loans to people shut out of mainstream credit.

2. Employment and livelihoods

   • Runners, clerks, storefront operators, bookkeepers, “bankers” all needed manpower. It created jobs in communities that otherwise had very few.

   • For many, it was a side income, a way to make ends meet.

3. Wealth accumulation & mobility for a few

   • Some “Kings” and “Queens” acquired real estate, owned homes, built business empires. That not only elevated their own status, but sometimes allowed them to serve as role models or community anchors.

   • Some of them became philanthropic actors — funding schools, giving to churches, supporting local social causes (especially when the “respectable institutions” excluded Black giving).

   • Casper Holstein is often cited as one who invested in real estate and gave back to Harlem. Business Insider+3Wikipedia+3clcjbooks.rutgers.edu+3

   • St. Clair used her position to fight corruption and uplift her neighborhood. Business Insider+1

4. Local autonomy & self-determination

   • Because these systems were run by Black people (not external white-controlled gambling syndicates, at least in many cases), they had more say over their own microeconomies.

   • In places where legal and financial systems excluded Black people, underground gambling became one of the few spheres over which Black folks could assert agency.

5. Community cohesion, social ritual & entertainment

   • Gambling in those days was not just about money — it was social: conversation, hopes, dreams, risk-taking, gossip about “who won,” local prestige.

   • It provided a kind of “recreation economy” in places where there were few legitimate leisure options.

6. Resistance & critique

   • Some operators used their influence as leverage against corrupt law enforcement or political actors. For example, St. Clair ran ads calling out police corruption. Wikipedia+1

   • The fact that Black communities created parallel economies was itself a form of coping and adaptive resistance to systematic exclusion.

So the underground gambling economy had real, sometimes hidden, benefits—especially in a context of scarcity, exclusion, and systemic oppression.

Downsides, Risks & Trade-offs

To be balanced, we must acknowledge the darker side:

• Vulnerability to exploitation & violence: Because it was illegal, gamblers and operators were vulnerable to theft, robbery, coercion, violence, and criminal extortion.

• Corruption: Bribes, collusion with police, fixed “games,” laundering, siphoning — all risks were higher in unregulated environments.

• Unequal payoffs: Only a few became “Kings” or “Queens.” Many “runners” or small bettors lost more than they gained.

• Criminal sanction & legal risk: Arrests, prison, criminal records could devastate lives.

• Distortion of local economies: Portions of household income diverted to gambling (especially for lower-income households) rather than savings or investing.

• Limited transparency / fairness: Because of its illegal nature, disputes over fairness or payouts were hard to adjudicate.

• Undermining legitimate institutions: Some underground operators competed with or undermined more legitimate businesses or community trust.

From Underground to State Lotteries: The Shift & What It Meant

As states legalized lotteries, the landscape changed:

• Underground gambling lost some of its monopoly or appeal because legal options offered safety, legitimacy, and (in many cases) better security and regulation.

• But the shift also meant that control of gambling revenue moved from local (often Black) operators to state coffers, often run by white/dominant political structures.

• Legal lotteries often frame themselves as supporting public goods (education, infrastructure, etc.), so part of the money is supposed to come back into the community or state in theory. gamblingandthelaw.com+3Scholarly Commons+3JSTOR+3

• But there is critique: many studies show that lotteries tend to extract disproportionately from low-income and minority communities. CNS Maryland+2LAW eCommons+2

• Some of the “uplift” that underground operators did through direct reinvestment or local patronage is no longer possible under state-run models.

In short: the scale may be larger, regulation more formal, but the connection to the community can be more distant, and the balance of benefits and burdens shifts.

Reflection: What We Can Learn, What We Can Reclaim

• The story of underground gambling in Black America is not just crime; it’s also survival, creativity, risk, resilience, and entrepreneurial adaptation under extreme constraints.

• The positives remind us: in systems that exclude you, people find ways to build parallel economies, circulate wealth internally, and support one another.

• When evaluating state forms (like lotteries), we should ask: How much of that revenue is truly returning to marginalized communities? Are the structures fair? Do they empower, or do they extract?

• For our work in health and wellness and building community wealth, this history is instructive: in systems that exclude, people build their own. But one must also be cautious of exploitation, lack of regulation, and ensuring that the benefits are shared.