Ladbrokes versus Playboy: Round One

 

The years 1979 and 1980 signalled a change in fortunes for the British casino industry.  The industry’s structure, in particular in London, had generated an environment perfectly suited to the foreign gambler; the most important were Middle Eastern, mainly Iranian.  A majority of Islamic countries prohibit gambling which is prohibited by the Qur’an.  The Qur’an states:

O ye who believe! Intoxicants and gambling, (dedication of) stones, and (divination by) arrows, are an abomination, – of Satan’s handwork: eschew such (abomination), that ye may prosper.

Yet, though London was well-placed to provide facilities for a wealthy clientele denied opportunities for gaming in their own countries, their custom declined dramatically after 1979.  As the Gaming Board’s annual report observed: ‘notwithstanding the increase in “drop”, facilities in London may well have been over-provided at a time when there has been a decline in the number of people participating in gaming’. The report also identified various reasons why the gaming industry, which in London was very reliant on overseas custom, was now facing difficulties. The strength of sterling, now that Britain’s balance of payments position had improved, ‘made London less attractive to Americans and Arabs; moreover, ‘events in Iran had created difficulties for Iranian gamblers’.  The Board here was referring to the revolution which had placed the AyatollahRuhollah Khomeini in power with Iran officially becoming an Islamic Republic on the 1 April, 1979.  British casinos were to see a decline in attendances after the revolution leading Playboy boss Victor Lownes to claim, ‘Petrodollars were flowing a little less freely than hitherto’. However, surprisingly, this did not lead to a decline in drop.

Victor Lownes (Flickr)

Victor Lownes (Flickr)

  

         

In these circumstances it was not surprising that clubs sought various ways to attract customers.  ‘Evidence given in support of objections to the renewal of licences of certain London clubs’, noted the Gaming Board’s report for 1979, ‘alleged that practices had developed designed to increase patronage and membership of these clubs’. These included the introduction of guests by ‘persons acting on behalf of the holder of the licence’, paying club members a commission for introducing a guest based on the amount of money lost, and allowing a member introducing a guest a percentage discount on their own losses.  The Board’s criticisms illustrate its general concern with the use of agents employed to introduce customers to the casinos, a practice which had become common in London gaming clubs. These abuses had been uncovered by the Board’s own processes. However, the most significant developments of this period of enforcement stemmed from investigations published by Private Eye. The Gaming Board may have entered a period of pro-active enforcement but it was Private Eye that exposed the most significant cases, notably those arising from the rivalry between Ladbrokes and Playboy.

Private Eye

Private Eye

            The Ladbroke Group’s casinos were raided late in 1979.  According to Gaming Board Inspector Grahame Robinson, the police had objected to the renewal of Ladbrokes’ London licences, so too had Playboy. According to Robinson, of all the major gaming groups operating at the time, Playboy ‘were the only ones that did’.  Playboy’s objection to Ladbrokes’ licence sparked a vicious feud between Ladbrokes’ Cyril Stein and Playboy’s Victor Lownes, initiating a cycle of retaliation which led effectively to the destruction of both groups, with Private Eye reporting each and every exchange between the two combatants.  Apparently the Gaming Board would look forward to the bi-weekly publication of Private Eye.  According to Robinson, ‘Private Eye was a great source of information for us, if something was in Private Eye it was worth looking into.’ The journalist behind the investigations by Private Eye was Martin Tomkinson.  According to Tomkinson, the first story surrounding Ladbrokes had appeared in the London News but ‘Cyril Stein had effectively managed to kill it.’ Tomkinson would, in the course of his investigations, strike up a strong relationship with Victor Lownes who would become a source of some of Private Eye’s articles.  Private Eye investigations had resulted in the raids on Ladbrokes, and would subsequently report anything of significance in the case against Playboy.  By the end of 1979, three of the four London casinos operated by Ladbrokes Group had been closed following the rejection of an appeal at the Knightsbridge Crown Court in November.  By April 1980 the group had surrendered all of its casino licences in the United Kingdom. 

Martin Tomkinson (centre)

Martin Tomkinson (centre) Photo by Eric Hands

            The case against Ladbrokes attracted attention in the national press.  Ladbrokes were a large, well known, successful organisation listed on the London Stock Exchange and, prior to its troubles, considered a sound investment by experts.  It floundered on the accusations made by Playboy that its agents had been trawling the high-end casino clubs in London, in order to identify the owners of expensive motor vehicles parked close to rival casinos.  The number-plate details of these vehicles were then passed to a private investigator employed by Ladbrokes who then used a police force contact to match the numbers with the owners of the cars.   According to Daily Telegraph journalist, Barbara Conway, ‘LADUP, the casino off shoot of Ladbrokes entertainment group, committed a series of breaches of the Gaming Act and “corrupted a member or members of the police force”’. Ladbrokes representatives had tracked down at least one corrupt police officer within the Nottinghamshire Constabulary.  This activity was shrouded in secrecy and given, in the best boy scout’s style, a secret codename, Operation Unit Six.  Patience Wheatcroft in the Sunday Times subsequently named three former Ladbrokes employees, including Gordon Irvine who was a casino director, who were to be charged with offences under the Prevention of Corruption Act; it was alleged that the Police National Computer (PNC) had been accessed to provide Ladbrokes with names and addresses of car owners.  However, Conway and Wheatcroft were simply following the lead of Private Eye which had first reported on such matters in May 1979.

            These efforts to identify potential customers were as audacious as they were idiotic.  Once the numbers had been collected, ‘a 51 year old former inspector formerly in the Nottinghamshire Constabulary, with a little help from a still serving officer was able to obtain the names and addresses of their registered owners through the Police National Computer’.   Ladbrokes were thus provided with, ’10,000 car numbers at 50p an owner’. Surprisingly, Ladbrokes would offer little to defend this action at subsequent licensing hearings.  Ladbrokes’ QC, John Matthew, admitted that Andreas Christianson, a marketing director for the company, had arranged for private detectives to take lists of car numbers from rival car parks, but argued that this was not ‘itself any breach of the Gaming Act’.  As Private Eye observed, however, the use to which these details were put appeared to breach Section 42 of the 1968 Gaming Act which prohibited advertising of any kind or inviting ‘any section of the public in Great Britain, however selected’ to take part as players’.  Possibly the most enlightening statement made during this affair was that of Cyril Stein himself, who claimed in a letter to his shareholders that the activities of Operation Unit Six ‘were normal throughout the industry’.  This was hardly a glowing reference for the enforcement of the 1968 Act by the Gaming Board. 

            Once Ladbrokes had gained possession of the addresses of the owners of the cars, their ‘marketing representatives’ would pay the addressees a visit.  According to Private Eye:

 Most revealing … was the habit of Ladbrokes’ “marketing department” of sending “external hostesses” to the hotel rooms of casino gamblers.  This is not believed to be the theme of the latest Ladbrokes’ advertising campaign, entitled: “Let’s Spend the Night Together.” 

Private Eye did not make it clear if this approach was made with the use of the addresses gained from the PNC or by commission agents.  In the resulting prosecutions of Ladbrokes employees involved in Operation Unit Six, two were ‘found guilty of corruption and given suspended jail sentences’. 

            That Ladbrokes did not gain any sympathy from the courts was partly due to attempts to remove any incriminating evidence yet to be discovered by the authorities.  Conway remarked upon evidence offered by Cyril Stein’s Secretary, Janet Ballard.  Martin Tomkinson believed Ballard was the key to the Board’s success against Ladbrokes due to her being an ‘utterly unimpeachable witness.’  According to Ballard, ‘Ladbrokes executives ordered documents to be shredded when police started raiding the firm’s offices’; Michael Kempster, QC for the police, described a ‘“holocaust” of destroyed documents’.   Ladbroke’s casino division was doomed and Cyril Stein, Chief Executive of the group, was furious with Victor Lownes, the chief executive of Playboy, whom he believed had instigated the investigation. Stein despised Lownes on account of Playboy’s initial objection to the renewal of Ladbrokes’ casino licences. At a time when custom was tailing off in British casinos, the loss of Ladbrokes’ licences would have been of great benefit economically to Playboy by removing their closest competitor.  Private Eye had drawn public attention to the abuses, apparently institutionalised, within the casino industry but, unfortunately for Playboy, Stein believed that this was simply part of a campaign by Lownes against Ladbrokes, the fact that Martin Tomkinson names Victor Lownes as a key source of information for Private Eye’s articles lends support to Stein’s belief.  Particularly damaging was the claim by Private Eye that Stein was active in raising funds for Israel. This, according to Private Eye, ‘could see an organised boycott of Stein’s casinos by the handful of top Arabs who have been contributing freely to the Zionist cause, via the chemin de fer and roulette tables of the four Ladbrokes casinos in London’.

             Grahame Robinson believes that Stein had decided that  ‘if he was going down there were a lot more who could go with him … no question about that’. This appraisal of Stein’s approach is supported by Martin Tomkinson.  Tomkinson claims, ‘Victor Lownes made the mistake of joining the objections of the police to Ladbrokes’ licence and sure enough in tit for tat fashion Stein got his own back by grassing up Playboy.’ Stein went onto the attack. According to Private Eye, whose dogged investigative approach was in contrast to that of the Gaming Board, Stein, at a special meeting of the British Casino Association had,

 … launched into a tirade against Victor (disgusting) Lownes, proprietor of the rival Playboy Club, which is also objecting to the renewal of Ladbroke’s licences.  Stein threatened that unless Lownes withdrew his objections, Ladbroke would “throw all the mud” they had on the Playboy.

Despite Stein’s threat Playboy maintained their objection.  As the case against Ladbrokes progressed the future looked very bleak for Stein and his executives.   The Gaming Board’s representative at the licensing hearing claimed ‘that knowledge of the illegal car numbers scheme must have gone to the very top of the Ladbroke organisation’.   Brian Leary, appearing for Playboy, as Private Eye reported with relish, did not help, attacking ‘the deeply unlovable Stein’.  Leary suggested that ‘[e]veryone from the Chairman down knew what was going on’.  At this stage of proceedings even Ladbrokes’ QC accepted that ‘senior management either knew, were a party to, or should have known what went on in 1977 when the infamous marketing department was set up’.  Ladbroke’s gaming operations were beyond redemption. The Gaming Board’s annual report for 1981 commented, ‘No casino clubs are now controlled by the Ladbroke Group.  Of the three licences still held by companies in the group at the end of 1980, two were transferred and one was relinquished during the course of the year’.


The demise of the Kosher Nostra: Raiding the casinos and the case of the Victoria Sporting Club

Casinos, by the late 1970s, had become respectable business investments.   As the casino groups posted remarkable results, showing profits which grew year on year, there appeared little to concern the Gaming Board and the courts.  According to Playboy’s, Victor Lownes, between January 1976 and June 1981 ‘our UK casinos turned over a staggering £660.3 million.’

Victor Lownes

Victor Lownes

The press had largely ignored the new gaming industry and very little was brought to the attention of the public except for some exceptional cases.  One such case involved the owner of a casino in Torquay, John Tsigaridies, who appealed against the loss of his licence after two men and a woman were shot dead in his club on the 21 December 1973.This was a particularly violent incident for the time.  The attacker, Martin Charles Fenton, had killed a police officer before entering the club in search of the owner Tsigaridies.  A customer, female croupier and floor manager were killed.  The remote possibility that his appeal might succeed disappeared when Tsigaridies was further accused of allowing illegal gaming activities on his premises.  The Board also investigated Tsigaridies for allegedly granting credit to Fenton, something that may have contributed to later tragic events. The absence of criticism and hostile reporting in the press suggests that the Gaming Board should have had few concerns at this time. However, its records indicate that some casino operators were pushing the boundaries of the controlled environment created by the 1968 Act and there appeared to be persistent breaches of certain sections.

            The Gaming Board discussed numerous breaches of Section 16 of the Gaming Act during their meetings.  Section 16 of the Act dealt with the provision of credit for gaming, which was illegal in the United Kingdom.  Nearly all the breaches revolved around the acceptance and presentation of cheques.  Casino operators were allowed to accept cheques from customers in exchange for chips, but the number of cheques was limited and had to be presented to the bank within 48 hours of being cashed in a club.  Thus, if a customer cashed a cheque for chips in a casino on a Monday at midnight, it would have to be presented to the bank for payment by midnight on the following Wednesday.  These procedures effectively set up an audit trail within the casino.  In addition, customers were not allowed to buy back a cheque once it had been accepted by the casino. The intention of the Act was clear: these provisions were designed to prevent cheques being used as ‘credit markers’. 

            As stated, the Board discussed numerous breaches of Section 16 and it becomes apparent that the failure to bring successful prosecutions against operators found to be abusing cheque facilities was a cause of concern.  By October 1978 the Board were, ‘agreed that the inspectorate should make inquiries at a number of clubs in London to ascertain whether there was any evidence of the practice of cheques being accepted from members whose earlier cheques had not been honoured.’ It appeared that the Board, ‘wished to know whether there was evidence on which they could consider inviting the police to mount a prosecution in a suitable case, to establish the proper interpretation of section 16.’ The Board did not appear overconfident when it came to enforcing section 16 of the 1968 Act. In cases where the operator was discovered to have breached Section 16 there always appeared to be a junior manager or member of staff prepared to take responsibility for the transgression.  This appeared to be the case with the Reo Stakis Group of casinos in Scotland. 

Reo Stakis Regency Casino

Reo Stakis Regency Casino

The Board, at a section 19 certificate of approval meeting, discussed the fate of two gaming managers who had lost their management licences; one manager had been demoted and the other had lost all gaming licences.  The Board looked favourably on the two reapplications claiming that the mistakes regarding section 16 cheque acceptance were due to poor training and knowledge of the 1968 Act, that fourteen months had passed since the offences concerned had happened and the Board believed twelve months sufficient for a sanction in this type of case.  The Board recommended reinstatement of the two members of staffs management licences. Usually, the defence was that the actions of the staff member stemmed from ignorance of the regulations or simple mistakes and the staff had been supported by the Reo Stakis Group whose representative asserted that new training and cheque cashing procedures had been developed to avert any future failings.  However, the Board applied no sanction against the Reo Stakis Group, unlike the case against the L’Ambassadeur Casino, Ramsgate.  It appeared that this particular club had breached numerous regulations relating to section 16 credit and section 43 rights of entry for Board Inspectors.  In a report made by one of the Board’s Senior Inspectors, the Board were not expecting the club to defend itself at magistrate’s hearings regarding objections to the renewal of its licence.  The L’Ambassadeur Casino appeared to be an exceptional case in which one particular manager had attempted to refuse entry to the Board while ‘drunk on duty’.  However, not all cases were so cut and dried.  This was an unacceptable situation for the Board and appeared to trouble them considerably, not least because it was difficult to secure the co-operation of the police.  As former Gaming Board Inspector Grahame Robinson observed, such matters were not discovered overnight and ‘they [the police] wanted a lot of evidence – a bloody lot before the police would act’.  The reluctance of the police to bring prosecutions for breaches of Section 16 is reminiscent of their attitude to gaming clubs in general during the 1960s.  Eventually, this enforcement ‘gap’ would lead to institutionalised breaches of Section 16 by casino operators, resulting in a period of aggressive enforcement in the late 1970s and early 1980s.

            The Gaming Board, however, regained the initiative after successfully prosecuting the Le Cercle Club for breaches of section 16 in 1978. When it met in October 1978, the chairman ‘reminded the Board that … it had been agreed that the Inspectorate should make enquiries at a number of clubs in London to ascertain whether there was any evidence of practice of cheques being excepted from members whose earlier cheques had not been honoured’.  Casinos, according to Grahame Robinson, used numerous devices to avoid restrictions on credit; these included, ‘sending [cheques] off to various places so they wouldn’t come back for a number of months – all sorts of methods’.  With the case against Le Cercle, the Board appeared to have discovered a breach of section 16 which the courts had no difficulty in understanding.  Casino operators were not allowed to accept cheques from customers who had previously dishonoured cheques; Le Cercle had contravened this regulation.  The Board minutes record that, when the club’s appeal was turned down, the gaming manager, Mr Webster, ‘immediately left the court to close the club’.  This case appeared to set a precedent and the Board was keen to pursue similar breaches elsewhere. However, the breaches exposed at Le Cercle were relatively minor, as subsequent investigations of other operators would illustrate.

The successful prosecution of Le Cercle gave the Board a pretext to sufficient suspicions to investigate other casino operations and with the confidence to expect a subsequent conviction in the courts.  It was almost immediately followed by a raid on the Victoria Sporting Club on 10 December 1978, when Gaming Board officers accompanied by 200 police officers entered the premises.  Five principles of the club appeared at Thames Magistrates Court the next day charged with theft.  Four were additionally charged with conspiring to contravene Section 16 of the Gaming Act.

Victoria Sporting Club

Victoria Sporting Club

            The raid on the Victoria began a period of unprecedented enforcement of the 1968 Gaming Act.  The results of the raid were numerous.  When police and Board officials opened the Victoria’s safes they discovered – amongst numerous IOUs from customers – cocaine, jewellery, undisclosed foreign currency and sterling, and a valuable stamp collection.  The explanation offered by the Victoria for possessing the jewellery and the drugs remain unrecorded.  The jewellery, according to casino industry legend, had previously been worn by the female companions of rich clients from the Middle East, and had been used as security against illegally-issued credit, hence the IOUs.  One of the casino floor managers, a Mr Kappelner, knew little about gaming but was apparently a trained goldsmith and jeweller.  According to the Board’s records:

Police, who had previously been briefed, covered all the gaming tables, offices and passages and “froze” the premises.  Players were permitted to complete play of the spin of the wheel or the hand in progress, were then settled, and allowed to cash out under the supervision of the Board’s inspectors.  All players were interviewed by police and subsequently left the premises.

The interviews with those present at the time of the raid led to the discovery that some were not members or bona fide guests.  Apparently some customers had walked in straight of the street while others had been part of an organised junket.  Casino workers were escorted to their lockers which were searched by an attending police officer.  When the homes of senior managers and directors were searched large amounts of foreign currency were also discovered, some in the managers’ wallets, eventually resulting in tax evasion charges.

            Such a display of force was unprecedented. The abuses identified exposed considerable gaming-related and criminal offences, precisely the type of abuses the 1968 Gaming Act was designed to eradicate.  The IOUs indicated systemised breach of Section 16, the provision of credit for gaming; the presence of non-members breached Section 12.  The club’s managers and directors, with whom the Board and the police were particularly concerned, did not disappoint.  Mr Kappelner, the club’s precious stones and metals expert, was discovered ‘at different times to be in possession of markers (IOUs) to the total value of about £300,000’. Kappelner also possessed ‘a key, hidden in one of his socks, to a locked drawer in the main safe of the club.  In that draw was found a large quantity of cash and jewellery together with other markers’.   To compound Kappelner’s misery, police also discovered £6,000 in cash, including marked £20 notes that had been passed across the gaming tables earlier in the evening.  The discovery of marked notes in the casino safe suggested that a skimming operation was in progress in the club.  At some stage during the evening cash taken off the gaming tables and not declared for the purpose of tax had found its way into Kappelner’s pockets.  Kappelner would eventually face various charges including tax evasion.

            The owner of the Victoria, Cyril Levan, was also charged by police.  The safe in his office yielded a large amount of cash, some jewellery, a valuable stamp collection and ‘two packets, quantity not yet known, of a white powder provisionally identified as heroin’.  All of the Victoria’s senior management faced criminal charges relating to breaches of the Gaming Act, though tax evasion charges predominated. To compound the evidence, gaming staff interviewed on the night of the raid made statements against management.  According to the Board gaming staff had ‘given statements indicating that overtime or bonus payments to gaming staff were made by Kappelner by way of a skim from the cash count of the gaming table’.

            The owners and management of the Victoria, referred to by staff as the ‘Kosher Nostra’, would lose their licences to operate and/or work in casinos.  The Board was also compelled, in the case of the Victoria, to prohibit the use of the premises as a casino, one of the weapons at the Board’s disposal under Schedule 2 of the 1968 Act.  This was designed to frustrate those casino owners who, if found unfit, simply sold their operations as a going concern.  If the new operator could establish that they were a fit and proper person, a transfer of the licence could be obtained and the casino would remain operational throughout the entire sale process.  However, the Board felt, justifiably, that operators were essentially escaping sanction for misconduct if they could sell their casino on at its current market value, thus pre-empting the proposed removal of their gaming licence.  In the case of the Victoria, Levan sold the operation to Playboy’s Victor Lownes, who thereby accepted the risk that the Board might be successful in persuading the magistrates to disqualify the use of the building for gaming.  Lownes, however, reasoned that the Board would be unable to argue that the Playboy Club was unfit to maintain the license, making it difficult for the magistrates to prohibit the use of the building as a casino, thus gaining a rare success in the courts against the Gaming Board.

            As far as the Board was concerned, action against the Victoria Club was especially necessary if it was to be seen to be enforcing the law. It was impossible to continue to ignore such flagrant abuses of the 1968 Act which required the Board to protect the vulnerable gambler and to keep British gaming free from criminal involvement.  The illegal and apparently unlimited credit being issued by the Victoria, allowed the management of the Victoria the opportunity to exploit gamblers who were participating in gaming activity well beyond their means.  In addition, the breaches of Section 12, which allowed non-members to game at the Victoria, increased the possibility that vulnerable customers were being exposed to hard gaming. The scale of the abuses at the Victoria indicated an institutionalised approach to the illegal practices uncovered.  The amount of outstanding credit which was eventually identified by investigators, £1,300,000, was a considerable sum. The jewellery and expensive stamp collection in the safes, to facilitate further gaming activity amongst customers, identifies the owners and management as reckless, if not, callous.  The discovery of narcotics, presumably to be supplied to favoured custom, was a clear indication of criminal connections, at the very least.

            Yet, though it led to successful convictions, it might be argued that the action taken against the Victoria Club was also necessary to restore the Board’s credibility. Though it had, during the original certificate of consent process, identified Judah Binstock as an unsuitable person to operate the Victoria, the Board had shown less concern in relation to his associates, including Levan, and had allowed the application for a license to proceed. Similarly, though the Board was aware of dubious visitors to the club and various sharp and/or illegal practices there during the 1960s, the casino had effectively been legalised under the 1968 Act. From the evidence gathered during the course of the raid, however, it seems likely that Levan, after the removal of Binstock, had continued to operate the Victoria in much the same way as before, in flagrant breach of the 1968 Act.    The abuses uncovered in the raid did not occur overnight and most of them could not be described as difficult to identify and prosecute, as were some offences related to credit. Yet, the Victoria operated for a period of eight years after receiving its license in 1970, relatively untroubled by the Board. At the very least, this represented a failure of the Board as an enforcement agency, which remains difficult to explain. What is certain is that the Victoria raid displayed a change in enforcement tactics by the Gaming Board.  The serious criminal abuses discovered at the Victoria prompted a period of unprecedented pro-active enforcement.  However, the Board did not uncover the most prolific abusers of gaming law by their own devices.  Some were discovered through targeted investigations for breaches of Section 16; in discovering others the Board was aided by two unlikely sources, Private Eye magazine and gaming industry insiders.


Blood on the carpet: the enforcement of the 1968 Gaming Act

On Friday 10th December at 3:10am over 200 police officers assisted by two Senior Inspectors and 12 Inspectors of the Gaming Board entered the premises of the club in execution of warrants under the Theft and Gaming Acts. (Chairman’s Report Gaming Board of Great Britain, 1979)

The Victoria casino was the largest casino in the United Kingdom at the time it was raided in 1978.  The owners of the Victoria had been granted a certificate of consent in 1970 after they had disassociated themselves with Judah Binstock.

Judah Binstock

Judah Binstock

Victoria Sporting Club

Victoria Sporting Club

 

The majority shareholder in the club, Cyril Levan, had been arrested on the 8th December, along with a majority of the club’s senior management and directors.  The Board’s records do not state why the Victoria was raided, but they do indicate what was found and what resulted. The owners and management of the Victoria were charged with theft, tax evasion, breach of Section 16 of the Gaming Act (the extension of credit) and breach of Section 12 of the Gaming Act (who may participate in gaming).  There were also charges made against table and ancillary staff for theft and possession of drugs respectively.  Prior to the raids, the Victoria appears to have been the site of a number of illegal activities: the club was granting credit, allowing non-members to game, skimming cash from the gaming tables (to avoid paying tax) providing customers with narcotics and acting as an unregistered pawn broker. The details of these offences will be discussed later, but the judgement of the Board and its enforcement practices prior to the raid, also require evaluation.  The raid on the Victoria signalled the start of a full-scale onslaught by the Gaming Board and the police against the existing casino companies, the majority of which operated in the lucrative London market.

London’s casino market was relatively diverse. At the top end of the scale casinos such as the Ritz, the Hertford Club, Ladbroke’s Hill Street and the Clermont catered for a niche clientele of wealthy customers, mainly from the Middle East.  The Playboy Club and the Victoria Sporting Club catered to a larger and more diverse high-spend market, including wealthy business people and visitors from abroad, while Charlie Chesters and the Golden Nugget catered to low-threat, low-spend customers, the majority of which were, in the case of the Nugget, Chinese.

Charlie Chester's Casino (Flickr)

Charlie Chester’s Casino (Flickr)

During the 1970s London’s casino market had benefited from an increase in oil-rich custom from the Middle East.  There were a number of factors that had allowed London casinos to attract such custom but three were particularly important. Firstly, the Arab states, at least those with oil resources, had benefited greatly from the oil crisis which had been initiated by OPEC after the United States had re-equipped the Israeli Army during the Yom Kippur War in 1973. The financial benefits, for those with privilege, of the oil crisis were immense.  Middle Eastern gamblers literally had money to burn.  Secondly, Middle Eastern gamblers had begun to abandon Beirut as their chosen summer city playground.  The Lebanese Civil War did not break out until 1975, but prior to this there had been a number of violent incidents which had destabilised the Lebanon and Beirut itself, chief amongst them the violent raid by Israeli commandos which had resulted in the assassination of senior Palestinian Liberation Organisation (PLO) members and initiated a series of vicious terror and anti-terror activities.

1970s Beirut

1970s Beirut

London became the chosen replacement for Beirut.  However, the most important facet of service London casinos could offer to Middle Eastern custom was discretion, accordingly, The Times claimed ‘For many (Middle Eastern customers) in the 1970s and 1980s, London provided a place to enjoy their wealth without being scrutinised by conservative mullahs.’

The increase in Middle Eastern custom could not have come at a more opportune time for the British casino industry. The industry had been restricted in its operational scope by the 1968 Gaming Act and had lost the lucrative ‘junkets’ that had been permitted in the 1960s. The discrete nature of British casinos under the new regulatory regime supervised by the Gaming Board suited many Middle Eastern customers perfectly and its characteristics are illustrated by the observations of the American author Stanley Ellis.  In an article commissioned by The Times, Ellis described the differing style or culture of gaming in the UK when compared to that of the United States. American gamblers arriving in London ‘especially if preconditioned by Las Vegas, would learn that the local clubs were not laid out in a gaudy row along Shaftsbury Avenue in simulation of the strip in Las Vegas’.  Having gained entrance, the American gambler would encounter ‘considerably less glitter and hubbub within them than those out West (presumably West of USA)’. Ellis, who had frequented London’s gaming clubs during the 1960s, was witness to the way in which British casinos had been transformed after the 1968 Gaming Act had come into force. American customers, accustomed to the accommodating hospitality of American casinos, were in for a nasty shock. ‘Rarely a night passes’, he claimed, ‘without a scream resounding through the premises as some stricken Yankee learns that the goodies he has casually ordered are, by the law of the land, to be paid for’. American operators accepted food and drink ordered by their customers as an operational cost; alcohol consumed and, for regular players, food consumed, was complimentary.  British operators were not allowed to offer this level of service to their customers as it was construed by the Board as an inducement to game, therefore, breaching the principle of unstimulated demand enshrined in the 1968 Gaming Act.

Ellis’s observations are of most value regarding casino clientele:

Whatever the table, the American in London will at first be startled by the international nature of his tablemates.  Las Vegas has a certain heterogeneous air; they come in all sizes, shapes and degrees of affluence, but, by and large, they are predominantly American.  In the London club when you accidently jostle the player next to you it is a question of which language you apologise in.

The casino gaming experience in London was clearly very different from the ‘classless’ activity that it was in the USA.  Gaming in the UK might have evolved on American lines if the gaming clubs which had mushroomed under the provisions of the 1960 Act, had been allowed to continue unimpeded. The clubs established during the 1960s were to some extent a product of the social and cultural change associated with that decade; indeed, they helped to define it.  As it happened, however, the 1968 Act had created an industry more suited to the conditions of the 1970s. London offered gaming opportunities aplenty but also offered the discrete level of service that many wealthy visitors from the Middle East and elsewhere demanded.

For these reasons the British casino business flourished after the 1968 Act came into force. ‘Unstimulated demand’ ensured that casinos attracted little attention. Yet the veteran campaigner, Raymond Blackburn, who had been successful in compelling the Metropolitan Police to enforce the 1960 Act, remained dissatisfied. In December 1972, Blackburn resumed hostilities with a letter to the Gaming Board demanding that it should ‘open a hearing on my complaint that the Board is failing to do its duty under the Act in respect of the [Playboy] club’. Blackburn was particularly concerned with the Playboy Club. His letter explained:  ‘The general nature of matters raised is: (a) extraordinary behaviour of the club prior to receiving certificate and on hearing before magistrates: (b) American connections of the club: (c) pornographic nature of the Playboy club, philosophy etc and illegal activities of those for whose benefit the club is run: (d) advertising’.  As it transpired, only one of Blackburn’s complaints – the issue of foreign ownership – was substantial.

Bunnies at London Playboy late 1960s

Bunnies at London Playboy late 1960s

The Gaming Board, since its inception, had been concerned that British casinos might fall under the control of unscrupulous foreign criminals.  It had discussed the issue with the Home Office and the ban on ownership of British casinos by foreign companies had been enforced, except in the case of the Playboy.  The Playboy Club had proved to be a highly successful casino and an iconic brand.  It   was owned by the Playboy Corporation which, having consulted the Gaming Board, had established a trust under whose banner the club operated in the UK.  The Playboy brand and the success of the casino attracted some prominent trustees, Liberal MP Clement Freud among them, a man whose gambling activities would later prove problematic for the Playboy Group.

Clement Freud MP

Clement Freud MP

The trust arrangement notwithstanding, Blackburn’s complaint with regard to foreign ownership, was largely legitimate.  His criticism of Playboy’s philosophy and the club’s pornographic nature may have been an attempt to attract media attention to his ongoing campaign against pornographers operating in London’s Soho.

If this was so, London’s casinos were incidental victims of Blackburn’s moral backlash. However, he appeared to have little lasting impact.  By 1974 London was awash with Middle Eastern oil money.  Cash exchanged for chips in British casinos (drop) increased year on year throughout the 1970s; between 1976 and 1979 the annual increase in drop was between £147m and £200m. Whatever the state of the British economy more generally, London’s casinos were experiencing boom conditions. Their good fortune was shared by the government who, according to Her Majesty’s Customs and Excise, had benefited from the gaming duty to the extent of £168m in 1974 alone.  With only Blackburn to contend with, there appeared to be little to concern the casino operators and little reason for the Gaming Board or the police to spring into action. However, this comfortable world was soon to disintegrate into a frenzy of raids, prosecutions and acts of mutually assured destruction.


Results of the investigations into the Victoria Sporting Club and the Pair of Shoes

The establishment of the Gaming Board appeared to be a success.  There are, however, some points that require further consideration, notably the differing approaches and results of the investigations into the Victoria Sporting Club and the Pair of Shoes.  When dealing with the Victoria the Board had rightly identified Judah Binstock as a threat to the probity of the industry.

Judah Binstock

Judah Binstock

Binstock’s involvement with the American Mafia had, despite his denials, involved meetings at the club indicating that he had established, at the least, an informal relationship.  The Victoria was utilising junkets from the United States therefore exposing the club to all the presumed criminality of the American organisers.  The outcome of the certification process, Binstock’s removal from the Victoria’s board, had presumably satisfied the Gaming Board.  Yet the club had also been questioned over a number of practices which were, if not as serious as the alleged connection with organised crime, still significant.  It seems likely that the Victoria had been supplying customers with sex workers on demand.  The club had also provided players with extensive lines of credit and if Wally Birch’s testimony is credible, had become the haunt of moneylenders, along with some of London’s criminal element.

Wally Birch

Wally Birch

The only accusation against the Pair of Shoes was that its proprietors had established a connection with the American Mafia.  Arguably, this case was less serious than the case involving the Victoria Club because it was the sole area of concern identified.  However, the Gaming Board had been placed in a delicate position.  It had originally issued certificates of consent to the proprietors of the Pair of Shoes and the Penthouse Club, which, as it transpired, appeared to be an error of judgement. This may have compelled the Board to act more harshly against the Pair of Shoes and the Penthouse than against the Victoria.  At the same time, it has to be recognised that the Board was wise to allow the police to take the initiative thereby minimising the extent to which it would be exposed to media attention and criticism. The actions of the Board in this case can be viewed in a wider context.  Through the certification process, the number of gaming clubs had been reduced to what the Board perceived as an acceptable level, a key mission objective.  Thus the loss of two more clubs was not an issue for the Board.  Revoking the gaming licenses for the Pair of Shoes and the Penthouse was as a show of force, a message to the gaming industry that the ‘authorities’ had power and were prepared to use it.

More importantly, there may have been political considerations involved in the decision-making process in the Pair of Shoes/Penthouse case.  Legitimising casino gambling had been a bold step for the government which had invested considerable resources in the Gaming Board and its inspectorate. To maintain credibility the 1968 Act had to be seen to succeed where the 1960 Act had failed. Ensuring the economic stability of the gaming industry also had a political dimension. The certificate of consent process was not solely designed to root out the criminal elements from within the gaming industry; it also had to identify those operators who were equipped to survive economically.  The gaming industry, once specifically legalised, would be expected to contribute considerable tax revenue to the exchequer.

Victoria Sporting Club

Victoria Sporting Club

The Victoria was the largest casino in the United Kingdom and arguably remains so to the present day.  It was a successful club with a huge membership and the likelihood of it going out of business was effectively non-existent.   The Board would have considered this during the certification process and may have modified its approach accordingly.  Although the Victoria was a cause for concern, the removal of Binstock was sufficient to address the Board’s misgivings. The Pair of Shoes and the Penthouse Club, simply, would not be missed.

The legitimisation of British casinos under the 1968 Act created a gaming industry unrecognisable to that which had existed under the 1960 Act.  The mixed entertainment available to clientele in the 1960s was not to return for over three decades.  The cabaret clubs which had relied upon gaming to subsidise their chosen entertainers became unprofitable and disappeared as a leisure outlet from nearly all areas of the United Kingdom.  The casinos established under the 1968 Act became very profitable, their only allowable purpose to provide gaming.  In the first decade of operation under the 1968 Act it generated immense profits, and significant tax revenue for the government.  This period was arguably a ‘golden age’ for British casinos.  Though legal restrictions ensured that casinos could not advertise and that signage was discreet the iconic Playboy Club and its ‘Bunnies’ were absorbed into popular culture.

Playboy Club London (flickr)

Playboy Club London (flickr)

Initially, the Gaming Board was principally concerned with licensing and certification. Once these exhausting tasks had been dealt with its principal function was monitoring. From time to time the Board would see fit to act against the newly-certified operators.  It had been granted draconian powers and was largely immune from appeal, but it appeared competent, honest and very much in control of the industry it presided over.  The first major test of the Board’s power came in 1970 when two refused applicants for a certificate of consent issued a writ of mandamus against the Board.   The writ was issued, ‘requiring the board to provide the applicants with sufficient information to enable them to answer the case against them and to reconsider the application in the light of any further evidence or representations.’ The writ proved unsuccessful, according to David Miers, ‘Although the Board will in practice give the applicant detailed reasons for its refusal to issue a certificate of consent (and frequently these will have been thoroughly canvassed in the interview between him and the Board), there is, as ex-parte Benaim confirmed, no obligation upon it to do so.’  Despite the Board’s early successes in the courts its control of the industry was weaker than expected.  Practices which were no longer thought to be possible within the newly regulated industry would resurface. These called the efficiency of the inspectorate into question and caused the Board considerable concern, time and trouble.

            In assessing the work of the Board and the operation of the 1968 Act more generally, it is important to remember what motivated the government when it introduced this legislation. The 1968 Gaming Act was socially aware.  Legislators had recognised the popularity of Bingo and its low potential for harm.  Bingo, arguably, served a communal purpose; it had rapidly established itself as a part of working-class culture, particularly amongst women, and was usually conducted within a safe environment.  Economically, it had benefited the fading cinema industry which had suffered a downturn in audiences with the advent of television.  However, if Bingo, along with the football pools and small lotteries, were relatively innocuous forms of gambling, hard gaming in casinos was considered potentially dangerous. It was this belief that underpinned the concept of unstimulated demand that was embodied in the 1968 Act. Given the rapid spread of gaming clubs in the 1960s, the government had been forced to respond to this potential danger. It did this, not by placing gaming clubs ‘beyond the pale’, but by legalising them under strict conditions, thus stabilising the industry and harvesting additional tax revenue.

To a large extent the Gaming Board relied on casino operators themselves to enforce the Act. According to Gaming Board inspector Grahame Robinson, casinos were able to use the 48-hour waiting period to ‘vet’ potential members. By cooperating with other casinos the operator could effectively gain references on new customers.  An enquiry about a new member’s level of play at another casino could justify their acceptance into their chosen new club or provide grounds for exclusion. Operators were not obliged to provide an explanation if a membership application was refused. There was an important element of protection built into these procedures. If a casino operator could accurately judge the class of the applicant, they would be more likely to accept an application from a middle-class applicant rather than from a working-class applicant with limited financial resources.

There are other aspects of unstimulated demand which require evaluation.  The establishment of the Gaming Board, in conjunction with unstimulated demand and permitted gaming areas had, by 31 December 1971, reduced the gaming industry in the United Kingdom to 115 licensed gaming clubs, a fraction of its size prior to the 1968 Act. The operators who survived the certification process were chosen for their honesty and financial robustness.  The industry which emerged under the 1968 Act was left with the sole purpose of generating gaming profit.  They were hugely successful.  They had, in effect, become a protected industry, largely free of competitors and operating within a strictly controlled licensing regime.  Grahame Robinson has stated that the Gaming Board objected to a majority of gaming licence applications on the basis of demand.  The new applicant for a casino licence had to prove that there was the required demand in their chosen area of operation to justify the new licence.  It was not only the gaming Board that could object to new casinos. Established operators, unwilling to see their exclusive market diluted by new competitors, were given an opportunity to object.  This drew the government and the operators closer together.  Under the 1968 Act the government, despite the noble-sounding principle of unstimulated demand, effectively developed a symbiotic relationship with the casino industry. Both parties benefited from this relationship: the government via taxation, the operators from the remaining profits. After 1968, the casino industry would become the sole lobbyist for further liberalisation and future administrations would pay attention to their demands.

Though, according to Robinson, the impression that British casinos were ‘Dens of iniquity’ persisted, the 1968 Act had created a casino industry in the United Kingdom unlike any other. If the casino industry had been legalized in the form which it had developed in the years up to 1968, mixed entertainment complexes would have been permitted and British casinos would have differed little from those in other parts of the world.  The Gaming Board travelled widely to learn from foreign gambling jurisdictions.  In a note written by Lord Allen of Abbeydale, the new chairman of the Gaming Board, to his inspectorate in 1979 about a visit to casinos in the USA and the Bahamas, he was struck by ‘their enormous size; their openness; and the heavy reliance on slot machines’.  The British casino industry was limited by legislation to two gaming machines in each operator’s premises, casino operators in the USA and the Bahamas did not have to contend with such restrictions and the number of machines utilised appeared only to be limited by the space available within their casinos.  Lord Allen recalled: ‘We could always get either a laugh or a look of incredulous amazement when we told our hosts what our laws were about the provision of slot machines in casinos’.  It was, however, differences in ‘the philosophy under which they are operating’ which seemed most significant.  In Nevada and the Bahamas, he observed, ‘the casinos are there simply to make money for the State’.  The chairman, the Board and the members of the inspectorate believed that their involvement in gaming in the United Kingdom was limited to enforcement and control.  As shall be discussed, the Board would resist any attempt to expand its responsibilities to include supervision or collection of taxes.  In due course, however, the British state did come to regard the industry primarily as a source of tax revenue.



.

Eradicating the undesirable: licensing Casino Staff and Suitable Gaming Board Inspectors

Licensing casino employees

The Gaming Board was not solely concerned with issuing certificates of consent.  The Gaming Act, under Section 19, demanded that any employees concerned with gaming – croupiers, cashiers, floor managers, casino managers and operators – would require personal licences.  Procedures for the personal licensing of croupiers were similar to those relating to applications for the certificate of consent.  Individuals were required to apply for a licence and to give details of any criminal convictions.  If, after initial scrutiny, the Board was unhappy with the application, it would consider interviewing the applicant; applicants who were refused a license could request an interview. In the case of Jill Humphries, the Board requested an interview due to the omission of a conviction on her application form.  However, at interview, it became apparent that the Board had other concerns regarding Mrs Humphries.  According to the Board’s account of the interview, she ‘offered no explanation for her failure to declare her conviction but did volunteer that the Playboy had told her that she would not obtain a Certificate of Approval because of her husband’.  She described her husband’s career as a croupier, but ‘she knew of his convictions and that he was now engaged in buying and selling cars in Brixton’.  During the interview Mrs Humphries mentioned a number of clubs at which she had been employed as a waitress and a croupier, and also her last position as a ‘Bunny’, a female employee of the Playboy Club. When questioned by the Board she ‘agreed that her husband was at present serving a suspended sentence for burglary’.  In subsequent discussion amongst Board members, which was highly sexist, it was agreed that:

… Mrs Humphries was far too weak to be subjected to the pressure and temptation of a casino.  She had failed to disclose her conviction.  Her husband had been associated with gaming but his record was such that he would never obtain a certificate and the members therefore decided to recommend that a certificate be refused in this case.

It appears likely that even if Mrs Humphries did not possess a criminal record her application for a gaming licence would have been refused on account of her husband’s criminal background.

Other cases were more straightforward. The application by Edward Gerty for a gaming licence was, given the Board’s strict procedures for applicants, never likely to succeed.  According to the notes of Gerty’s interview he had been employed at numerous clubs, at most of which ‘he was either sacked or left because he could not get on with the manager or the other staff’.  The Board had asked Gerty about the circumstances leading to a four-month period of detention in Copenhagen where he had been arrested in possession of counterfeit dollar bills. His explanation that he had agreed to carry a package – the contents of which he knew nothing – for a man he had met in a pub, was hardly convincing.  Gerty believed that he had been exonerated of any criminal activity as he had been released from prison and deported to Britain without being charged.  When questioned about a conviction in 1957 Gerty was ‘very vague about it’.  ‘Throughout the interview’, it was reported, ‘Mr Gerty gave the impression of someone who had drifted from job to job and had constant domestic troubles and had not given the impression that he took matters very seriously’.  The Board made the inevitable decision that Gerty was not a ‘fit and proper person’ to receive a licence.

The inspectorate under pressure

By April 1970 the Board had investigated 717 certificate of consent applications for gaming and a further 2,069 applications for bingo clubs. There do not appear to be figures regarding Section 19 interviews of workers in the gaming industry.  The Board’s initial workload was huge and it soon became apparent that it was understaffed. It did not help that it was obliged to release one of their inspectors who had proved incapable of fulfilling his duties.  It was important, in establishing the credibility of the Board that it should be seen as beyond reproach; maintaining its public image as an unbiased, professional regulatory force was very important and was to be maintained at all times. In particular, as the Board’s reaction to the Pair of Shoes case indicated, the media’s spotlight was to be avoided. When, in 1970, it became clear that one of the Board’s appointed inspectors posed a threat to its image, action quickly followed.

An internal memorandum in September 1970 made it clear that an inspector named Kelly, who was based in the North-West, was under scrutiny. He had been accompanied on his rounds by Mr Rowland, the Board’s inspector for East Lancashire, who subsequently submitted an unfavourable report.  ‘Because of his appearance, general untidiness and gross ignorance of gaming and the Gaming Act I was really ashamed to be associated with him’, Rowland noted; adding that ‘his obvious wig attracted a certain amount of derision from casino patrons’.  The report continued:

I liaised with the senior officers of the Blackpool Division of the Lancashire Constabulary and some of their comment were; the man’s a crackpot; He looked like a Tramp when he walked into my office; He could not give me a single answer to any of the problems I posed to him and I have no desire to contact him again.

The most damaging comments came from various casino operators and managers. One operator was obviously astounded that the Board had employed Kelly and had said to Rowland: ‘There were over 3,000 applicants for your jobs.  He would have been the last of the 3,000 if I had been making the selection’.  Possibly the oddest comment on Kelly’s behaviour, and there were many, was in the detail supplied by one casino manager who recalled:  ‘When he had been turned out of his flat he asked me if I could find him some accommodation’.

According to Rowland, Kelly was ‘so naive and gullible that the shrewd operators in the gaming industry are treating him as a joke’.   The Board’s credibility was clearly at stake here. In a letter from ‘Jack’ (Rowland) to ‘Charles’ (probably the Chief Inspector) dated 24 August 1970, it becomes apparent that Rowland had been tasked with reporting anything ‘which held the Board in ridicule’.  Rowland had visited the Scala Club at Pendleton where he had been approached by the casino manager, Mr Coy, ‘[a] Liverpudlian, sharp of wit and I suppose easy to get along with’.  After being introduced to Rowland, Coy had quipped, ‘Well, I hope you are not as daft as the other fella’.  Coy, according to Rowland, ‘summed the whole business very properly when he said “that there are a few people in the business who find it difficult to make head or tail of the man, and certainly have not got any decisions from the man”’.  The Board acted quickly and Kelly was dismissed.

The Kelly case was an indication of the pressure under which the Gaming Board was working.  When the Board reviewed its operations at a meeting on 6 July 1971 the chairman observed that ‘the experience gained from the Inspectorate’s first year in operation gave cause for concern that their number did not provide for an adequate degree of supervision of the industry’.  The Board took the view that it would be necessary to increase the size of the inspectorate by eight new posts. The Board had initially started their enforcement duties with 1 senior inspector and 26 field inspectors. Raymond clearly believed that his existing inspectors were overworked: ‘Every Inspector had consistently worked considerably more than his conditioned hours, and there was insufficient capacity to allow of diversion of efforts onto major issues which had arisen from time to time’. He also claimed that ‘there was no room for the Board to relax its vigilance, indeed there was every indication that even greater emphasis would have to be placed on supervision in the future’. However, the full desired increase of inspectors was not met and only 5 additional inspectors were eventually employed.


The Pair of Shoes and the Penthouse Club; Removing Organised Crime from the British Casino Industry

The investigation into the Victoria Sporting Club was not an isolated incident.  Questions regarding Mafia involvement were also raised in relation to applications from the Pair of Shoes and the Penthouse Club. The Gaming Board had been very discreet when refusing applications for certificates of consent.  In the case of Eftymious Stavrou, for example, the Board had not referred to his convictions for living of immoral earnings, simply stating that his applications had been refused on the grounds that his clubs in Eastbourne were not within a permitted area.  The Board would have been unlikely to have granted the licence, even if Stavrou’s clubs had been in a permitted area; only in that situation would the Board have been obliged to disclose that the applicant was not a ‘fit and proper’ person to obtain a licence.  In the case of the Penthouse Club, partly owned by Noel Souter and Derek Daggers, who also owned the Pair of Shoes, the Gaming Board found itself under considerable press scrutiny and unable to exercise the same discretion. Correspondence between the Board and the Metropolitan Police about the case illustrated the Board’s belief that their enforcement of the 1968 Act must be seen as unimpeachable.

Penthouse Playmates, Playboy Bunnies

Penthouse Pets, Playboy Bunnies

The two clubs in question had received certificates of consent from the Gaming Board.  Nothing untoward had been discovered during the investigations regarding the certificate of consent application and the two casinos had subsequently been granted gaming licences.  Problems arose when the Penthouse Club applied to the Westminster Licensing Committee to extend its premises and gaming area. The application was dismissed on a technicality and also because the proprietors had not demonstrated sufficient demand in the area for gaming.  However, according to the Gaming Board when asked about the application, the magistrates ‘went on to say that if they had got locus they would have refused a licence because the applicants were not fit and proper persons’. Though it transpired that the magistrates had made their decision on the basis of information received from the police, the Gaming Board found itself in an embarrassing position and subject to the attentions of the press, which was interested in the story for three reasons.  Firstly, because it appeared to drive a wedge between the Gaming Board, which had originally granted the clubs their certificates of consent, and the police; secondly, because the police objection was that Souter and Daggers were owners in name only and that the Penthouse Club was allegedly controlled by the American Mafia; and thirdly, that the chairman of the company owning the Pair of Shoes was a highly-respected Establishment figure, Lord Thomas of Remenham, former chairman of the British Overseas Airways Corporation and a director of Sun Life Insurance, the Sunday Times and Carbon Electric Holdings.

Lord Thomas

Lord Thomas

It rapidly becomes apparent that the Board were aware of concerns relating to the Pair of Shoes and had been negotiating with the police regarding the application to extend the premises. Souter and Daggers were relatively young men, from modest backgrounds in Hounslow, London, who had established themselves in the gaming industry with surprising rapidity, raising suspicions regarding the source of the finance at their disposal. The Chairman of the Gaming Board, Sir Stanley Raymond, had been informed by the police that they might object to the licence application of the Penthouse Club on the ground that the applicants were not ‘fit and proper’ persons. In a confidential note to Board members, Sir Stanley Raymond had discussed the police’s intentions and stated that he would speak to the Metropolitan Police Commissioner, ‘telling him of our difficulties’, by which he meant the unobtainable audit records of the Pair of Shoes.  Unwittingly, the magistrates had released sensitive information, before either the Board or the police were prepared to make the nature of their objections public.

The Gaming Board’s records illustrate that it was apparently building a case against the Pair of Shoes. Due to the magistrates’ unfortunately-timed statement the Board’s ‘trap has been sprung’.  Apparently, Souter and Daggers, the proprietors of the Pair of Shoes, had raised the capital for the Penthouse Club in partnership with new directors who had presumably provided 50 per cent of the finance required. ‘Our accountants are continuing their enquiries’, Raymond explained, ‘and as you know we have not yet interviewed the new directors because we wanted to complete our investigations first’.  Clearly, these investigations had not been unproblematic as it had been ‘necessary … to write to Lord Thomas on 7 April asking him to make sure that our accountants were given every facility’.  Sir Stanley continued: ‘We have had a number of approaches from MPs, the Press and others, trying to see whether a wedge has been driven between the police and ourselves but to all these enquiries we have replied that the Act provides for a two-tier system of licensing and in this case it was being effectively implemented’.  The Gaming Board appeared fearful of bad publicity with the Daily Express in particular following closely all developments. The press were looking to infer that the Board, issuers of certificates of consent, had somehow ‘dropped the ball’ and that the police had acted without the knowledge of the Board.

According to Raymond, the problem now confronting the Board was ‘’what to do next’?  It had to decide whether there was ‘sufficient information on which to apply for a revocation of the licence (premises licensed for gambling)’.  The Board had planned a joint press conference with the police and in the meantime it was ‘essential that the Board should retain its independent position’.  In outline, this was that the original certificates of consent had been granted on the basis of the best information available at the time and that investigations were continuing relating to ‘the appointment of new directors and other financial information that became available after the grant of a certificate’. It is clear that the Board was under considerable pressure, not least because the limitations of the certificate of consent process had been exposed. It was clearly effective in screening out undesirable operators but difficult to revoke when a certificated operator subsequently entered into business relationships with those whom the Board wished to exclude from the industry.  ‘We have had rather a delicate weekend with the press’ Raymond admitted, ‘… but I have thought it important to “keep our powder dry” and to try and separate the sensationalism from the facts of the case’.  He warned however, that ‘events may move rapidly’, if the applicants were to appeal against the magistrates’ decision or the police sought to cancel the license.

Correspondence between Raymond and Sir John Waldron, the Metropolitan Police Commissioner, indicate different approaches. The Board was especially anxious that its role as an impartial regulator should not be compromised. Its aim was to collect the hard evidence that would convince the courts, the press and the public of the unsuitability of the operators, new and old, of the Pair of Shoes and the Penthouse Club.

Sir John Waldron

Sir John Waldron

The police, however, were not prepared to wait upon evidence that may or may not arise.  In a letter to the Commissioner (‘Dear Jack’), Raymond thanked the police for their help and proceeded to highlight the Board’s concerns regarding the Pair of Shoes and the Penthouse. ‘You will have heard’, he wrote, ‘ that our accountants have been investigating the financial affairs of the applicant and we hoped that we might have by now sufficient material to justify opposing the licence application, or at least seeking an adjournment while further enquiries continue’.  Unfortunately, solid evidence that the clubs had been financed from dubious sources had not been forthcoming so that the Board had been forced to accept ‘that we have insufficient grounds even to seek an adjournment at the present moment’.

Sir Stanley indicated that the Board was aware that the police intended to object to the Pair of Shoe’s licence ‘on the ground that the applicants were not ‘fit and proper’.  If the police went ahead, Raymond argued, ‘the Magistrates may wish to know whether the information which leads you to oppose the grant of this licence was before the Board when the Board granted a certificate of consent’.  He confirmed that the information gathered by the Board against the proprietors of the two clubs dated from the period after the Board had granted certificates of consent.  However, as he went on to explain:

… it would not be possible to reveal this (information) in court unless you are prepared to disclose the substance of the information itself.  I imagine you would hesitate before doing so, but this would put us in a difficult position, since we could neither support you, nor explain why we were not supporting you. 

Police objections to a license for the Pair of Shoes after a certificate of consent had been granted would identify the case as one which had already been the subject of press speculation, making it difficult for the Board to continue its investigations. Moreover, Raymond was concerned that ‘[p]ublic opinion may jump to the conclusion that a shark has got through the net because the police and Gaming Board were not pulling together’. He added: if “unfit person” grounds are to be pleaded, we should either go together or not at all’.

Waldron, in his reply to Raymond, explained that the police were anxious about the Pair of Shoes ‘because there is increasing evidence that this club is being conducted by undesirable elements with American connections’.  It was, he conceded, ‘never easy in these circumstances to secure the evidence we want’. In order to appear consistent it would be necessary for the police to apply for cancellation of the license for the Pair of Shoes, ‘and maybe that of the Penthouse as well’.  Mirroring Sir Stanley’s fears the Commissioner observed: ‘One does not want to go off half-cock in these objections but the likelihood of obtaining real evidence that we can place before the court is slim and I think we must take every opportunity to probe the proprietors of any club whom we feel have, for want of a better word, Mafia connections’He was determined ‘not to allow influence of this nature to infiltrate into our West End’.

At a subsequent licensing on hearing 25 May 1971 the Pair of Shoes was effectively ambushed by the police and subsequently vented its frustration in correspondence with the Board. The club claimed that it had been outmanoeuvred:

… we were not given the opportunity to present facts and evidence to refute the allegations made as we had understood from the police that they were going to proceed on a basis of a technical point and it was not until just prior to the hearing that we learned that they intended to question our fitness in connection to other matters.

 The Pair of Shoes proposed making a detailed statement to the Board in which they would refute all allegations made by the police.  Regarding the alleged criminal associations, it was observed:

… with regard to the allegations that certain American persons with whom we have done business, are connected with illegal or criminal organisations, obviously we cannot bring evidence to refute this suggestion since we do not have the evidence which is available to the police … at no time were we led to suspect anything was amiss about our American connections.

The club’s proprietors claimed that there was no hard evidence against them and that they were victims of character assassination by the police.

As far as the Pair of Shoes was concerned the police were especially concerned with organised junkets for American gamblers which had brought the owners into contact with individuals with Mafia connections. The allegations against the owners, however, were made in open court in the full glare of publicity. This was in marked contrast to the Board’s relatively confidential interview process and it is significant that the Board were not involved in the police case against the club.  In a letter dated 2 June 1971, the Pair of Shoes listed its grievances, claiming that Souter had been cross-examined for more than two hours ‘upon the basis that there was gossip and suspicion against us and that we could not be so successful unless we were supported by unsavoury people’. The police, for example, had alleged a connection with Matthew (Matt) Ianniello, a Mafiosi, who would later become acting boss of the New York Genovese crime family.

Matthew Ianniello

Matthew Ianniello

In this sense, the police’s approach was not entirely dissimilar to that of the Board when interviewing Judah Binstock. The club claimed to have ‘issued a writ against the proprietors of the Sun newspaper who referred to it in a headline as a “Mafia Club”’.  The allegation that Lord Thomas had been appointed as chairman only to make the club seem respectable was also resented.

The proprietors’ protests, however, were to no avail.  They were not on trial where they could hope to rely upon a jury.  The police only had to sow a seed of doubt in the minds of the magistrates for their licence appeal to be dismissed. The Pair of Shoes and Penthouse clubs subsequently lost all licences relating to gaming.  This particular case did not call the certificate of consent process into question, though it did point to difficulties that could arise after the certificate had been granted. The problems relating to the Pair of Shoes and the Penthouse appeared to have arisen from lack of communication between the magistrates, the police and the Gaming Board.  Lessons were learned and cases of this nature did not occur again.


The Victoria Sporting Club and Judah Binstock

Though the Gaming Board appeared to have little difficulty in identifying unscrupulous or unfit operators the cases relating to the Victoria Sporting Club and the Pair of Shoes illustrate that it was not always straightforward. In these two cases, where there were no criminal records linked to any of the applicants, the Board utilised other forms of intelligence in making its assessment.  Despite a lack of available hard evidence, the Board appeared to have rightly assessed the nature of the individuals involved and the threat that they constituted to the legitimised gaming industry.

The Victoria Sporting Club on Edgware Road, London, is probably the most famous casino in the United Kingdom.  Purpose-built in the late 1960s, it was opened for business in 1967 under the ownership of Judah Binstock and George Wynberg and sold to Norwich Enterprises, a group owned by a consortium of businessmen, including Binstock.

Judah Binstock

Judah Binstock

The application for a certificate of consent by Norwich Enterprises quickly ran into difficulties and the major shareholders in the club were invited to interview by the Board. The interrogation of Binstock and others concerned with Norwich Enterprises was to last over four hours; it mainly focused on Binstock. It must be said that although Binstock was interrogated by the Board for a considerable length of time, he was a more impressive witness than, for example, Mohd had been. Also interviewed were Cyril Levan, who owned 33 per cent of the company and John Ashton, Levan’s brother-in-law, who owned 16 per cent, Lord Meston, who had been acting as a consultant, and Sir Gerald Nabarro, the flamboyant Conservative MP for South Worcestershire, who had been named as chairman designate of both Norwich Enterprises Ltd and the Victoria Sporting Club Ltd.

Sir Gerald Nabarro

Sir Gerald Nabarro

Nabarro was apparently surprised to learn that the Victoria was not guaranteed a gaming licence. According to the Board’s notes he promised to reconsider his position ‘and gave the impression of having his eyes opened to certain aspects of a company of which he was possibly to become a chairman’. 

The Board came to the conclusion that the Victoria ‘was a company floated by Mr Binstock and an associate called George Wynberg’, an American married to a British citizen. The interview began with questions to Binstock about various ‘American’ connections that he and Wynberg had developed.  In reply, Binstock sought to distance himself from his former associate; ‘he had been growing uneasy over Wynberg’s handling of the club’.  Binstock would undoubtedly have felt the need to distance himself from Wynberg as Wynberg had appeared in an ITN documentary which had intimated he was involved in police corruption and had links to Corsican criminal enforcers.  Binstock, throughout all his dealings with the Gaming Board, had displayed a keen mind and high intelligence.  It would be easy to conclude that Binstock may have anticipated trouble with the Board over Wynberg’s continued involvement with the Victoria casino and had ‘bought him out’ to pre-empt any objection from the Board.  Ashton was then questioned about a gambler (Herr Luder) who had been granted substantial credit ‘with almost disastrous results’.  In reply, he admitted to an ‘error of judgement’, claiming that the club had been led to understand that Luder was a rich German playboy with plenty of money, though in the event, this had proved not to be so’.  This correlates with Walter Birch’s claim that one member of the Victoria solely attended the club to lend money.  Other aspects of the Victoria’s operations were also scrutinised. Ashton denied that the club provided women for gaming customers though he did admit ‘that a casual look at any time into the club might reveal unescorted ladies sitting around which could be made to look as though they were “hostesses”’. The Board then returned to Binstock, asking him about American ‘junkets’ at the Victoria. In reply, it was explained that these had now ceased and that the club had incurred a loss thereby ‘through compensation for breach of contract’.

The rest of the interview appears to have concentrated solely on Binstock and   ‘his connection with various people which had appeared in reports in the possession of the Board’. The first of these was Peter Rachman, the notorious slum landlord whose ruthless intimidation of his tenants had given the word ‘Rachmanism’ to the English language.

Peter Rachman (Photo by Paul Popper/Popperfoto/Getty Images)

Peter Rachman (Photo by Paul Popper/Popperfoto/Getty Images)

Asked about Rachman, Binstock simply retorted that he had once purchased a property from him.  Binstock was then asked about his relationships with other individuals to whom the Board’s attention had been drawn, most of whom had worked at the Victoria.  It was clear that the Board believed that Binstock was consorting or had consorted in the past, with the wrong type of associates. The interrogation, as was no doubt intended, clearly unsettled Binstock. When asked about a man named Cavello, who was alleged to have ‘a fairly unsavoury reputation’,  Binstock complained that ‘he was being put into an awkward position as he had had no chance of preparing himself against allegations made widely by a variety of people’.

The majority of names put to Binstock were not English and some suggested an Italian connection. Asked about a Joe Napolitano, heagreed that he had met him, but from the start recognised him as a bad hat and probably a Mafia agent’.  He claimed to have discouraged him and his methods of junketing’.  When asked about an Angelo Bruno, with whom he was said to have met regularly at the club, Binstock denied all knowledge of him.

Angelo Bruno

Angelo Bruno

It is clear from this line of questioning that the Board was keen to investigate any possible association with the American Mafia. Bruno was well known to the American Federal authorities as an organised crime ‘Boss’ in Philadelphia, an established crime figure in the United States.  In fact, his activities in London had been well documented in the American press.  In 1966, the Philadelphia Inquirer claimed, ‘Angelo Bruno, head of the Philadelphia Cosa Nostra, is in London shopping around for a gambling casino’.  In a later article the inquirer claimed Bruno, ‘included a side trip to the Victoria Sporting Club in London in an alleged effort to “muscle in” on that enterprise for the Mafia.’ It is unlikely that the Mafia would have been attempting to “muscle in” on British operations; such activity would undoubtedly have drawn resistance from British operators and British criminal gangs.  However, the possibility that Mafia families were attempting to forge some form of business partnership, especially with operators of ambiguous morals such as Binstock are far more likely and an unsuccessful precedent for Trans-Atlantic criminal cooperation had already been attempted by the Krays in 1966 and 1967.   To compound the discomfort that Binstock must surely have been feeling at this stage of his interview, the Board accused him of lying, prompting a fervent denial.

By this point the writing was clearly on the wall for Binstock.  He was obviously an intelligent man and he had authored a book on casino administration. Moreover, unlike some applicants, his solicitor’s credentials had not been called into question.  He was however, well known amongst the criminal fraternity as a perpetrator of ‘White Collar’ crime.  An unnamed associate, a ‘City Solicitor’, has even described him as ‘probably the most bent person the world has ever known’ although this may relate to some of Binstock’s later criminal activities.  The interview eventually drew to a close with Binstock apparently accepting the possibility that he would not be allowed to continue in the gaming business.  Binstock claimed that:

… he had made enough money for the rest of his life and did not wish to be called out at all hours of the day and night as the gaming world demanded of him.  If the Board were unsatisfied with him he would be happy to dispose of his holdings to somebody else and settle back and have a more restful life. 

He was shrewd enough to realise his gaming career was over and the Victoria’s application proceeded without his involvement.

Judah Binstock was precisely the type of operator that the Gaming Board had been created to deal with.  Although undeniably a law breaker, Binstock had escaped any form of criminal prosecution.  Binstock’s miraculous ability to avoid the attention of the police was not solely due to his intellect.  The crime writer Martin Short had investigated a number of unsettling events within Scotland Yard. Short claimed, ‘Through the 1960s Criminal Intelligence had been failing to perceive changing patterns in crime and had proved stubbornly oblivious to what had been staring most lay observers in the face: that international organised crime was breaking into London on a massive scale.’  Short goes on to state that, ‘Criminal Intelligence was reluctant to consider crime connected with casinos or vice as anything but trivial.’  Binstock featured heavily in Short’s article, in particular a currency scandal which he had become involved in in the mid 1970s and exposed in 1977.  However, Short also claimed, ‘From at least 1966 Binstock should have been in C11s sights for other serious matters which had certainly brought him to the attention of uniformed officers.’  Apparently, Binstock’s, ‘involvement with the Victoria Sporting Club, especially, should have caught the eye of one C11 officer specialising in casinos, Michael Franklin.’   Eventually Franklin would leave the Metropolitan Police, ‘to become an employee of none other than Judah Binstock.’  It is clear from Short’s article that Binstock had probably corrupted Franklin, therefore avoiding the attention and notoriety a C11 file would have created. On paper there was no reason to exclude him from owning or operating a casino under the 1968 Act.  However, as demonstrated by the certificate of consent interviews, the Board was prepared to make decisions on uncorroborated police reports and evidence that would not have satisfied a court of law.  Binstock disappeared from the casino industry, although many casino employees who worked at the Victoria believed he received some profit from the club for a number of years subsequently.  A few years later, the aforementioned foreign currency scandal emerged and Binstock failed to return to the UK after a trip abroad.  He remains a controversial figure; more recently, his property dealings in Spain have caused the Spanish enforcement agencies concern.


Gangsters, Ponces and Thieves: the Gaming Act 1968 and the Gaming Board for Great Britain

‘For the first time since 1960 the ascendancy of the rule of law in relation to gaming had received a general acknowledgement’.

 

The enforcement of the 1968 Gaming Act was to be the responsibility of the Gaming Board for Great Britain which was deemed essential if the 1968 Act was to succeed where the 1960 Act had failed.  The newspapers had, even before the Act was passed, recognised the importance of the proposed Gaming Board inspectorate.  The Times, in a series of leaders, had followed the progress of the Gaming Bill closely, arguing from the outset that enforcement could not be left solely to the police:

It would not be enough to leave this to the police. They are overburdened as it is, and the effective supervision of gaming clubs requires specialist and detailed knowledge.  That is why the plan for gaming inspectors, made public yesterday by the Churches Council on Gambling, deserves strong support in principle.  

The Times also commented on the qualities which the inspectors themselves should possess: ‘It would also be necessary to attract men of sufficient capacity not to be hoodwinked by the more dubious operators’. ‘Good, even generous, salaries’ would have to be paid so that the inspectorate would remain ‘above the temptations of corruption’, which were, it acknowledged, ‘considerable.’   Later, The Times reinforced the point, arguing that ‘the task of enforcing complex rules upon very ingenious promoters is beyond an overworked police force’.  This implied that the police had failed to control the gaming industry that had grown up in the 1960s. How, therefore, was the Gaming Board to succeed under the 1968 Act, where the police and the courts had failed under the 1960 Act?

Applications for certificates of consent

 

The first advantage the Gaming Board would have was that the 1968 Act had been created with the sole purpose of legitimising an industry that was perceived to be unregulated and dismissive of the efforts of the authorities to control it. Though the Act was not to come into force until July 1970, the Gaming Board was established in the spring of 1969 with Sir Stanley Raymond as chairman.

Sir Stanley Raymond (Getty Images)

Sir Stanley Raymond (Getty Images)

Kelly claims that the Board aroused a certain amount of pessimism amongst politicians.  Although this may be over emphasised there was some concern regarding the appointment of Raymond as chairman.  Kelly states, ‘Dismay concerning the Board increased considerably upon the announcement that the Government had appointed as Board Chairman, Sir Stanley Raymond’.

Joseph M Kelly

Joseph M Kelly

Apparently concerns were raised regarding Raymond’s experience of gaming.  However, the appointment of other members of the Board aroused little opposition due to the fact that, ‘Most of the other Board personnel were within the British civil service and thus immune to almost any allegation of self-serving or incompetence.’  Recruitment of inspectors began with the appointment of Detective Chief Superintendent Reginald Doak in May 1969.  According to The Times, Doak was ‘one of Scotland Yard’s most experienced detectives’; he would ‘head a new corps d’elite to stop illegal gambling in Britain’.   The Board’s plan was to appoint 15 inspectors who would require ‘many of the qualities, especially stamina, needed to infiltrate and put out of business many of the seedy gambling clubs at present on the increase in London and provincial cities’.  This may have led readers to assume that the inspectors would be touring the length and breadth of the country in nocturnal pursuit of gangsters and dubious club operators. In reality, this was far from the truth.  The inspectors would have rights of entry to clubs; they would also have powers to close such clubs which they believed to be in breach of the Act. However, the eradication of dubious operators and the radical reduction in the size of the industry was to be achieved by bureaucratic means rather than hollowed-eyed, intrepid, dogged, inspectors bursting into illicit gaming operations all over the country.

The Gaming Board’s initial tool of enforcement was the certificate of consent which operators were required to hold if they were to receive a licence to operate casinos.  For applicants, the process could involve considerable expense in legal fees and in certification fees.  Yet, even if the Board issued a certificate this did not guarantee a gaming license. However, probably the greatest concern to potential applicants was the Board’s powers over the consent process.  After studying each application for a certificate a decision would be made as to whether one should be granted.  The application process could be extended if the Board deemed it necessary to call applicants for interview.  The gaming inspectorate was almost exclusively made up of ex-police officers who had achieved the rank of Inspector within their force. According to former Gaming Board Inspector Grahame Robinson, ex-army officers were also favoured.  Their interrogation skills would prove useful during interviews with applicants.

Applications were numerous and the background of many of the applicants left a lot to be desired.   Initially, the Board had to sift through over 300 applications and they should be applauded for the industry they applied to their workload. The Gaming Board used three categories when evaluating the applicant’s submission: (a) ‘Apparent clear grounds for refusal, of a nature which can be revealed to the applicant’; (b) Apparent grounds for refusal, but no clear reasons which can be revealed to the applicant’; (c) ‘No apparent grounds for refusal’. Of these three categories, (b) appears the most controversial.  The Gaming Board, after investigating the backgrounds of applicants, would classify numerous applications as category (b), much to the chagrin of the applicants concerned.  The Board did not take such decisions lightly and there was much discussion about the rule of law during meetings. Even so, some refusals were based on guilt by association.  The Board did not have to provide any evidence for their decisions. Essentially an applicant, if refused, had no recourse to appeal.  There is little evidence available concerning successful applications, but there are detailed notes on applicants invited to interview in order to clarify areas of their submission.

Before turning to the Board’s treatment of particular applicants, the methods utilised during the interviews, which were very much like a police interrogation, are of note. The way that the Board dealt with an application from Miss Pauline Wallis was indicative. Miss Wallis had been invited in for an interview to explain some omissions in her initial application for a certificate of consent.  Miss Wallis’s background was thoroughly investigated and concerns were raised over the company she had kept in her earlier life and the current relationship in which she was involved or in which she was believed to be involved. In reply to questioning, Miss Wallis stated that she had been ‘a bit wild’ in younger days.  This had resulted in the birth of a child, the father being a Mr Dagul, and it was her relationship with him that appeared to concern the Board.  Miss Wallis, claiming that the relationship with Dagul had finished, explained their past together; she had ‘followed him round from the Mount Street Club to the Esmerelda Club and finally to the Apron Strings Club’. She also claimed that she ‘had had nothing to do with criminals and, whenever she became aware of their existence, she reported the matter to the police’.

With the support of her solicitor, Miss Wallis argued her case for running the Casanova Club.  Addressing the Board, her solicitor emphasised:

… that the Casanova Club had been run by Miss Wallis since 1965 without any complaints or criticism from the police or any source; that the financial position of the club was sound; that she had always obeyed instantly the results of the court cases in regard to the legality of gaming and that in every respect the Casanova Club was a model of what the Gaming Board wished for the gaming industry.

He explained that ‘the relationship with Mr Dagul had been an emotional one but he had in no way been concerned with the running of the Casanova Club’.  Sadly, it appears that Miss Wallis’s appeal fell on deaf ears.  There are no further references to this particular application in later files and presumably she was denied a certificate.

The decision might seem harsh but the Board was not satisfied with key points in her application and the Board was clearly uneasy about the relationship with Dagul. However, even if the Board believed Miss Wallis’s claim that the mysterious Dagul was no longer involved in the running of the Casanova Club, she had probably prejudiced her case herself through her association with other clubs.  The fact that she had been employed by the Esmerelda Club, once owned by the notorious London gangsters the Krays, was probably sufficient in itself to persuade the Board to refuse a certificate. The Wallis interview is a good example of the approach the Board would adopt during interviews.  Usually key sections of the interviews would be recorded and the Board would comment on the interview and the interviewee.  In the case of Miss Wallis there were no comments placed upon her file. It appears that the Board rarely changed a decision to refuse a certificate after interviewing an applicant.

Minutes from the meeting of the Gaming Board on, 25 March 1969, explain how the Board went about processing an application for a certificate of consent. Category (b) cases, where the Board had decided to refuse a certificate but could not reveal the reasons to the applicant, illustrate the general approach. ‘Firstly’, it was noted, ‘the staff will re-examine the application with the object of finding further lines of enquiry which might lead to information which would place the application in Category (a)’.  If this was unsuccessful, or while new enquiries were in progress, ‘it was suggested that the applicant should be interrogated’.  The use of the word ‘interrogated’ immediately makes an impact upon the reader.  As stated, the inspectorate comprised, almost exclusively, former police officers. The skills gained from their previous employment would be harnessed during the interview process.  ‘The purpose of the interrogation, or preliminary interview’, it was explained, ‘ would be to obtain further information from the applicant himself to assist the Board in deciding whether he is likely to be capable of and diligent in enforcing the law etc’. Significantly, the guidance continued: ‘In view of the heavy pressure and responsibilities likely to fall on proprietors of gaming clubs it would appear to be reasonable that they should be subjected, if necessary, to considerable pressure in the content and direction of the questioning’.

Guidance was also provided as to the use of evidence against applicants derived from sources that were to remain confidential.  The Board would contact various police forces when investigating applicants and some of the information provided, as shall be seen, could not be disclosed as it may have jeopardised on-going police investigations. Nevertheless, as far as the Board was concerned, it was ‘legitimate to make use of information in the Board’s possession (whether or not it could be revealed to the applicant) in framing the lines of questioning to be pursued’.  It was anticipated that the interrogation skills of the inspectors would come into play at this stage of the interview. Significantly, it was regarded as ‘legitimate to use the sort of “trick” questions which can be answered readily enough by a truthful witness, but tend to lead the author of a fictional submission into difficulties’.  Though, in the majority of cases, the Board appeared to have reasonable grounds for refusing an application, the use of intelligence gathered from undisclosed sources was problematic and the procedure – especially if it involved interrogation – could appear harsh and unfair to an unsuccessful applicant. It was clear from the start that the Board intended to ‘weed out’ unscrupulous operators and those with criminal connections.

Applications for a certificate of consent did not always lead to an interview and there are many instances where applicants were simply refused a certificate. The proprietor of the New Apron Strings Club, George Nicholas (Jaha), had broken the law and been convicted on many occasions before he filed his application for a certificate. In 1938, Nicholas had been convicted of ‘larceny as a bailee’ and sent to an approved school. He had been bound over for three years for receiving stolen goods in 1945; he been imprisoned for nine months in 1947 after stealing a car, for 15 months in 1953 for housebreaking and larceny, and for two months (commuted to a £50 fine) in 1957 for being in possession of forged petrol coupons. Finally, a conviction in 1962 for unlawful gaming earned him a £25 fine. Nicholas’ criminal record – even his conviction for unlawful gaming by itself – would probably have been enough for the Board to refuse his application. However, as far as the Board was concerned, the fact that he was an American was sufficient grounds for refusal.

In deciding this case the Board noted that ‘George Nicholas is still an American despite the length of time he has apparently lived in this country.  His criminal record would probably preclude naturalisation’. Under the regulatory regime introduced by the 1968 Act non-UK incorporated companies or individuals born outside the UK and not naturalised were not allowed to operate casinos in the United Kingdom.  This decision had been made after Sir Stanley Raymond, the chairman of the Board, had studied gaming industries in other countries. One consistent facet of foreign gaming enforcement was the exclusion of operators not native to their particular jurisdiction.  In meetings with the Home Office, the secretary of the Board had argued that ‘the only practical way to eliminate foreign control would be to recommend the Home Secretary to make a regulation forbidding magistrates to licence any company under foreign control’. Though the majority off refusals to issue certificates were based on information regarding the applicant’s criminal record, some were refused when the Board exercised its powers to exclude foreign nationals. Whether applicants were informed of the reason for refusal in category (b) cases is not clear.

However, evidence of any previous criminal activity was usually sufficient to guarantee refusal. Many applicants with criminal records appear to have stayed on the right side of the law in the years preceding their involvement in the industry and to have legitimised themselves by owning and operating clubs in a responsible fashion.  Indeed, it could be argued that ownership of a club, either drinking or gaming-orientated, was a form of retirement from their criminal careers.  Wally Birch appeared to fit this picture, and from evidence gained from the interviews of the Board and their background checks on applicants, so did many other club proprietors. When the wife of Edward Fewtrell applied for a certificate the Board was aware that a number of members of the Fewtrell family had criminal records, though they were now successful night-club owners. Edward Fewtrell had also been convicted for licensing offences relating to alcohol, presumably in relation to the running of his night clubs.  This was enough to ensure that Mrs Fewtrell’s application for a certificate was unsuccessful, though she was not helped by her solicitor whose credentials had been challenged in court while representing another client and whose academic degrees, ‘cannot be recognised in this country and are stated to be American and postal degrees’.

Eddie Fewtrell

Eddie Fewtrell

The defence of many applicants bordered on the comic.  One club proprietor, Eftymious Stavrou, had applied for two certificates of consent for his gaming clubs in Eastbourne, the peculiarly-named Egg and Bacon Bar and the Quebec Club.  The Board had discovered that Stavrou had not declared two previous convictions and he was invited through written representation to explain why he had omitted these offences from his application.  Police records had shown that he had been convicted for ‘living on immoral earnings’ in 1939 and 1948, for which he had received three months and four months imprisonment respectively.  Stavrou claimed that he had been living with a girlfriend in a flat when accused of living of her earnings in 1939.  He had been found guilty in court due to his lack of English as the court interpreter had instructed Mr Stavrou to plead guilty, though he claimed that this was untrue. As for the second conviction, he admitted through his solicitor that he had been living with a prostitute in London, but explained to the Board ‘that he was not living on her earnings, he was earning himself in his shoemaking business and was looking after the girl’.  As it happened, Stavrou’s previous convictions were irrelevant as the Board was able to refuse his application ‘on the grounds of location’, Eastbourne not being a ‘permitted area’ under the 1968 Act.

The application of Munshi Mohd for the Casino Francaise was terminated after interview.  Records of the interview, at which he was questioned by inspectors about an incident in Gateshead in 1969, described Mohd’s account as ‘highly imaginative’.  He claimed that he had been found in possession of marked cards and loaded dice after two people tried to sell them to him;  ‘his explanation of exceptional runs of luck when gambling on other premises was unconvincing’.  It appears that Mohd, as well as being a gaming club proprietor, supplemented his earnings as a mechanic, a gaming industry term for a professional cheat who utilised marked cards or biased dice by sleight of hand.  The records of the interview claim that he

 … had considerable difficulty in telling the same story at the end of the interview as he had at the beginning.  His memory failed him conveniently when asked about debts, bank accounts, or names of clubs from which he had been barred…He seemed to be incapable of telling a consistent story. 

Having considered the interview the Board formed the view that Mohd ‘was evasive, shifty and told lies to such an extent that he got himself mixed up’.  Thus his application was refused.

Applications for certificates were not solely confined to gaming club licences.  Gaming machine suppliers were also required to apply. Investigations revealed that applicants for club licenses often had criminal records but these were for relatively minor offences, some committed as young offenders, and contraventions of the gaming and licensing laws. Gaming machine suppliers appear to have been convicted for more serious offences.  This caused the Board to take an especially cautious line in respect of an application by a Mr. L.A. Piggot, also known as ‘Dove’ and ‘Laurie Young’.

Though both Pigott and his wife had declared that they had no previous criminal convictions, the Board asked the Metropolitan Police to investigate his background.   These investigations revealed that Pigott had a record ‘which he could hardly forget’, though it was not enough in itself to disqualify him according to the Board’s criteria.  It is apparent from the notes on Pigott’s application, however, that the Metropolitan Police did not want his application to succeed. Pigott’s failure to disclose his previous convictions and the fact that the police suspected him of involvement in current criminal activity meant that the Commissioner was ‘of the opinion that he can be considered not to be a fit and proper person to carry out the relevant functions’.  This communication was accompanied by a statement from the Criminal Intelligence Branch of the Metropolitan Police:

… it has been suspected that Piggott has been dealing in stolen gaming machines in the London area for many years, and that the machines after having been ‘serviced’ by him have found their way to the Midland clubs and vice versa.  There is no substantial evidence to support this information, but Piggott is under constant surveillance by officers of this Branch in an effort to bring about a termination of his current criminal activity. 

Piggott’s application was refused.

This case highlights the hard criminal involvement in the supply of gaming machines.  Machines were installed in many working-men’s clubs in the Midlands and the North.  The profits from such machines were substantial and had led to murder in at least one supply operation.  In 1967 Michael Luvaglio and Dennis Stafford were convicted of the murder of Angus Sibbert, a money collector for London-based criminals operating gaming machines in the North of England, whose body was found in the boot of his car with three bullet wounds in the chest.

Michael Luvaglio

Michael Luvaglio

Angus Sibbert

Angus Sibbert

Dennis Stafford

Dennis Stafford

It is alleged that Sibbert had been ‘skimming’ profits from the gaming machines under his control and he had been killed by his London-based bosses.  Sibbert’s murder and the convictions of Stafford and Luvaglio generated much discussion for two reasons.  Firstly, the convictions for murder were regarded in some quarters as unsafe.  According to an investigation by the Observer newspaper, the case against the two men was tenuous and the prosecution had failed to disclose numerous items of evidence to the defence.  The case also inspired a novel by Ted Lewis, Jack’s Return Home, and Get Carter, a film starring Michael Caine.  The question of Luvaglio and Stafford’s guilt notwithstanding, the Sibbert murder was an indication of the extreme measures that gangland individuals or organisations were prepared to use to protect an extremely lucrative business.  Kelly also comments on the criminal activity associated with gaming machines, however,  interestingly, he also states that the British government, ‘may have been influenced by a Wall Street Journal article which claimed that organised crime first became interested in Britain after the legalisation of slot machines, because “they had thousands of machines left over after their retreat from Havana.”’


The Gaming Board and the impact of regulation after 1968

The 1968 Act created a new regulatory body, the Gaming Board for Great Britain, comprising a chairman and other members to be appointed by the Home Secretary.  It was the duty of the Board ‘to keep under review the extent and character of gaming in Great Britain and, in particular, to keep under review the extent, character and locations of gaming facilities’.  The Gaming Board would appoint its own enforcement officials who were empowered

 … at any reasonable time enter any premises in respect of which a licence under this Act is for the time being in force, and, while on any such premises, may inspect the premises and any machine and any book or document on those premises which the inspector or constable reasonably requires for the purpose of ascertaining whether a contravention of this Act or of any regulations made under it is being or has been committed.

The Gaming Board inspectorate became, as time went by, regular visitors to casinos under their assigned areas. Inspectors would arrive unannounced and perform mandatory checks.  Miers claims the Board’…assumed a “blanket approach” to regular inspections’,  which would cause a certain amount of apprehension to casino duty managers, though on most visits they found very little that required further action.

Professor David Miers

Professor David Miers

The gaming industry was by no means hostile to the new regime. Nathan Fenton a director of the Mecca casino chain hoped that the new application process, to be administered by the Board, was successful. He argued: ‘I hope they cut the number of clubs to as low as 200.  One has to face facts.  Up to last year, anyone who wanted to set up a club could do so if he had the price of a licence’.  Indeed, a large number of inspections were to be initiated by casino operators, fearing the loss of their licence, who reported actions which had led to breaches of the Act and/or its attendant regulations. Many of these breaches were related to credit and will be discussed later.

The Board’s operations were to ensure that the three key principles behind the Act were respected; thus gaming was to be kept free from criminal elements; it was to be conducted in a fair and open manner; and the young and the vulnerable were to be protected. Though the Act had been drafted carefully legislators, with the problems of enforcing the 1960 Act in mind, were reluctant to leave anything to chance.  For this reason a failsafe device was incorporated into the new Act.  Section 22 of the Act, as stated, empowered the Board to create regulations that would become law.  The regulations that were devised illustrated an approach to gaming that would leave casino operators in no doubt that conditions they had known in the 1960s were no more.

This was also made evident in the numerous regulations subsequently devised by the Board and imposed as Statutory Instruments (SI) under Section 22 of the Act. Though some were simply ‘Commencement Orders’, indicating the date from which licenses would run, others were created in response to actions taken by casinos and impacted on their routine day-to-day operations. These SIs dealt with matters that related to the environment in which gaming could take place by, for example, dictating the hours when a club could open and when it could serve alcoholic drinks, while prohibiting cross-subsidisation; the cost of hiring entertainers could not be met from gaming profits. They also shaped the culture of the casino as a workplace. It was through the regulations that the Act was enforced.

A majority of the SIs created in 1969 were solely concerned with establishing and enforcing the principle of unstimulated demand.  Regulation 4 and 6, for example, dealt with two significant aspects of club gaming during the 1960s, the intermingling of entertainment and other services.  According to regulation 4,  a licensing authority could refuse to grant or renew a license ‘in respect of premises to which a person might, otherwise than in an emergency, gain access directly from private premises not to be included in the licence’.  This was meant to ensure that casinos would be quite separate from their surroundings in order to diminish any cross-fertilization with other activities. A customer attending a bingo club, cabaret club or any other form of entertainment would no longer be exposed to hard gaming, particularly if that was their express wish.  This regulation helped to ensure that gaming clubs remained relatively anonymous with a single point for entrance and exit and signage at a minimum.

Possibly more disturbing for the casinos than a restricted entrance was the regulation’s effect upon the casino’s ability to provide hospitality.  Regulation 4 required casinos to separate their restaurants from the gaming floor.  Separation included the removal of a restaurant’s entrance and exit from within the casino’s licensed area.  If a customer wished to eat they were required to exit the casino and enter the restaurant from a different entrance.  The impact of regulation 4 was reinforced by regulation 6 which was also designed to restrict the other entertainments that might be offered in attempts to seduce potential gaming customers. Premises licensed for gaming – other than for bingo, bridge and whist – could not be used ‘for dancing or for music or entertainments by persons actually present or performing’.  This signalled the end of cabaret in gaming clubs.

As gaming clubs became established during the 1960s they attempted to attract custom by hiring musicians and cabaret acts.  Victor Lownes at the London Playboy Club, for example, hired Woody Allen for the clubs opening night.

Victor Lownes

Victor Lownes

Woody Allen opened the original Playboy Club in London

Woody Allen opened the original Playboy Club in London

According to former Playboy ‘Cocktail Bunny’ Marilyn Cole Lownes, ‘Woody Allen, in London filming Casino Royale, opened the cabaret room, and Sammy Davis Jr added a few songs.’

Marilyn Cole-Lownes

Marilyn Cole-Lownes

This was an indication of the expected return that such high profile entertainers were expected to generate. Cabaret acts clashed utterly with the principle of unstimulated demand and were now eradicated completely.  The removal of entertainment of any kind from within casinos under the 1968 Act can be illustrated by the reluctance of a casino in Luton during the 1980s to hire a Scottish Piper to pipe in the New Year.  It was assumed by managers of this particular casino that the Gaming Board would object to this ‘entertainment’ on one day of the year and the Board were never approached for permission.

Such regulations ensured that the gaming experience in Britain was unique. After the 1968 Act the British casino industry was forced to concentrate upon profits derived solely from gaming.  The freedom enjoyed by American casinos to generate substantial additional profits through slot machines was denied to British casinos. Moreover, the separation of entrances as discussed above also removed the ability of British operators to generate additional income from restaurants within the actual casino or from any form of entertainment which was eliminated by SI 1968/1110.  Therefore, British casinos became pure gaming environments.  Although some of the regulations created at the Act’s introduction would be relaxed and certain sections modified, the regime of inspection ensured rigid compliance once it came into force in 1970.

The SI impacting most directly on casino employees prohibited the acceptance of gratuities with regard to gaming in casinos.  Effectively no casino employee licensed under the 1968 Act could accept a tip from a customer.  The order stated: ‘neither the holder of the licence nor any person employed on the premises under any service agreement shall accept from a member of the club … or from a guest of a member, any gratuity in respect of that gaming’.  This led to a peculiar anomaly whereby croupiers and licensed gaming staff were the only casino employees who could not accept a tip, a situation unlike any other in the casino world.  The rationale for prohibition, according to the Gaming Board, was that tipping might have the effect of increasing the’ house edge’. ‘In Monte Carlo’, it was argued, ‘… tips given in respect of roulette may well yield an income equivalent or nearly equivalent to that which would be gained by a second zero [on a roulette wheel]’.  The Board also claimed that ‘whatever arrangements are made for the disposal of tips, they always stand mainly to the benefit of the management either as an income or in relief of wages cost’.  They were thus persuaded to prohibit the practice of tipping altogether.

These concerns were well founded. In the 1960s managers and owners of casinos generally took a percentage of the tips proffered by customers and regarded this as additional income for the club.  However, Roger Munting claims the prohibition of tips was introduced to ‘…to prevent staff encouraging patrons to continue to play the tables irresponsibly, croupiers and other staff in the gaming rooms may not receive tips, whereas these are commonplace elsewhere.’  This opinion appears slightly flawed.  Croupiers, if in an environment where tipping is present, effectively prefer the customer to win.  A winning customer is more likely to tip, irresponsible play does not enter the equation and management dislike a customer who tips heavily as the money tipped cannot be regained in the casino through play.  Instead of outright prohibition, tipping could simply have been subjected to some form of regulation but it seems likely that the Board believed that compliance in such matters would prove difficult to enforce. This particular SI could be justified because it ended a process by which casino operators were generating commercial profit from gaming in a way that was neither honest nor open, thus breaching one of the fundamental principles of the Act. If a customer was prepared to offer a croupier a gratuity he may have felt cheated on discovering that the casino operator was gaining financially from the transactions.  However, regardless of the Board’s intentions, in the long run there was only one section of society that suffered as a result of the prohibition of gratuities in regard to gaming, the gaming staff.

In the 1960s gaming staff derived the majority of their income from gratuities.  Though hard evidence is difficult to find, many croupiers employed during this time state that their earnings were high and some claim that they earned as much as doctors or solicitorsAccording to Marie McClure, the last year of employment with tips during 1970, enabled her, with the help of a large win on the horses from her husband, to save up a deposit for a house. The removal of tipping under the 1968 Act had a considerable impact on croupiers and on casino operators who were required to pay higher wages if they were to retain highly-skilled staff.  This – along with the additional expense of licensing gaming staff – led to a huge increase in labour costs for casino operators.  If the greed exhibited by gaming operators in the 1960s, witnessed by their assimilation of a large percentage of gaming staffs tips into their own pockets, had been discussed and dealt with in an honest and open manner, both operators and croupiers might have benefited under the 1968 Act.  Instead casino operators were saddled with a hugely increased wage bill, which inevitably, they sought to reduce, much to the detriment of gaming staff.

Summary: the transition to a new era of regulation

 

The briefing notes on the 1968 Act made it clear that the purpose of the powers of enforcement proposed would ‘under-pin the whole of the control system and provide a major means of reducing the volume of commercial gaming’.  Taken in an enforcement context it is apparent that Section 22, whatever its stated purpose, was to be used initially as a tool to reduce the number of gaming clubs in Britain. Despite Enoch Powell’s claims that the regulation-making apparatus meant that too much power was now in the hands of central government rather than the local licensing authorities, it was clear that the aim was to create whatever regulations were required to control the new industry that had grown up under a less than watertight legal framework in the 1960s.

Enoch Powell

Enoch Powell

            As the 1960s came to a close the consistent pressure applied against operators by private citizens such as Raymond Blackburn and the reinvigorated police and court system began to take its toll.  The government’s decision to continue with the introduction of new legislation, despite enforcement successes in the courts, was possibly prompted by the fact that gaming operators seemed determined to find ways of circumventing the law as it stood under the 1963 Act.  In 1969, for example, The Times reported an unsuccessful appeal by the Victoria Sporting Club over its “marker chip” system for roulette.  This entailed the customer using different stacks of chips, one for play and the other as a contribution to the operator’s costs and was designed to maintain the operator’s profits after other systems had been found illegal. The Times, when reporting the outcome of the case, claimed: ‘A financial crisis for Britain’s gaming clubs and casinos was brought a stage nearer yesterday’. However, casino operators continued to prove resilient and ingenious in evading the law.  The last device utilised prior to the introduction of the 1968 Act was the ‘pool’ system whereby, as The Times explained,  ‘the bank is treated as a loan to the players, but at the end of gaming, a session charge for each player is deducted from the winnings of the bank or pool’.  The question could be asked, were the gaming clubs attempting purely to cover their costs until the introduction of the new Act and the successful application of a licence was achieved?  In a later article The Times believed, if the pool system was found to be illegal, ‘the clubs will be forced either to close or to play roulette and other games under rules in which the bank has no advantage.’  It is quite ironic that gaming clubs were now appealing to the government to protect them from a law which they had abused and manipulated.

How did the Act, when it was finally introduced, shape the gaming experience for the British public?  The Labour Party, as Keith Laybourn has argued, had become dependent to some extent on small-scale gaming to fund it activities at constituency party level and was anxious to clarify the law generally with regard to gambling.

Keith Laybourn

Keith Laybourn

There was, however, an anti-gambling body of opinion within the Labour Party which had to be taken into account.  The key principle of unstimulated demand embodied in the new legislation was designed to make gaming in a casino less attractive than it had been under the 1960 Act, thus allowing the government to justify the legalisation of casino gaming by pointing to the severe restrictions to which it was now subjected.  The 1968 Act arguably made it possible for the government to claim that it was protecting the working classes from the perils of gaming and at the same time taxing, via gaming duty, members of the public who were unlikely to vote Labour – the rich, the middle class and foreign visitors.  According to Kelly, by 1983, 85% of London’s casino custom would be foreign.

Joseph M Kelly

Joseph M Kelly

The threat of impulsive gambling in casinos by working class citizens could largely be eradicated by the Act’s membership requirements and the prohibition of entertainment.  Labour legislators, if necessary could portray the principle of unstimulated demand as the socially-responsible bedrock of the Act, while effectively utilising the principle to assuage the fears and demands of less enthusiastic supporters on the Labour back benches.

             Britain during the 1960s experienced a constant flow of liberalising legislation of which the 1960 and 1963 Acts can be included.  As the decade drew to a close, there was something of a reaction or a readjustment.  According to Jonathon Green, ‘As the sixties turned into the seventies it appeared that freedom had proved too much.  People preferred the rules, preferred, as would become patently clear, Nanny’s grim scriptures, her “cruel to be kind” philosophising, her mix of menacing moral tales and nationalist fantasies that had not held water for half a century.’

Jonathon Green

Jonathon Green

Thus the abhorrent consequences of the 1960 Act were to be addressed with the new 1968 Gaming Act.  However, the decision to introduce a new Act, at a time when the enforcement apparatus of the state appeared to be succeeding in regulating gaming in clubs requires further consideration. Casino-style gaming had arrived in the United Kingdom at an opportune time.  Disposable income was increasing amongst the populace at a time of near full employment and gaming clubs were perfectly placed to meet the demands of a growing market for entertainment. There were opportunities in this situation for casino operators – and for the government too. This became clear when Roy Jenkins, anticipating the new Act coming into force on 1 July 1970, announced a reform of betting and gaming taxes in his Budget statement on 14 April.

Roy Jenkins

Roy Jenkins

According to Jenkins the government would ‘make changes in the structure this year so as to relate it more closely to the level of gaming in clubs’. The current tax system was based upon the rateable value of the casino’s premises.  Jenkins was attempting to tax gaming clubs by scale as opposed to a general taxation system.  Jenkins’ reforms would replace existing taxation with ‘a charge in two parts, consisting of a basic element related to the rateable value and an additional progressive charge increasing with the number of tables provided for gaming.’  He estimated that the new rate of taxation would raise ‘about £1m. a year extra revenue’.   Reform of the laws relating to gaming may appear at first glance to be part of the liberalising movement of the 1960s, but it was also driven by the perceived need to regulate an industry that had previously eluded controls and by the government’s search for new sources of revenue.



 

The 1968 Gaming Act: The Apparatus of Control

Permitted Areas

The new application process for a gaming licence, in particular the certificate of consent, acted as a deterrent to many individuals or organisations that had operated gaming clubs under the 1960 Act.  There were, however, other factors which played a part in the reduction of gaming clubs after 1968. Section 22 of the 1968 Act enabled the Home Secretary, after consultation with the Gaming Board, to create specific regulations from time to time.  One such regulation, introduced in 1969, created ‘permitted areas’ within which casinos could operate.  According to the American historian Joseph M. Kelly, the permitted areas regulation was introduced ‘to accomplish the parliamentary goal of drastic reduction of the number of casinos.’

Joseph M Kelly

Joseph M Kelly

The proposed permitted areas in England were the County boroughs of Birmingham, Blackpool, Bournemouth, Brighton, Bristol, Coventry, Great Yarmouth, Kingston-upon-Hull, Leeds, Leicester, Liverpool, Manchester, Newcastle upon Tyne, Nottingham, Plymouth, Portsmouth, Salford, Sheffield, Southampton, Southend-on-Sea, Stoke-on-Trent, Teeside, Torbay and Wolverhampton. Permitted areas outside these county boroughs were Hove, Lytham St. Annes, Margate and Ramsgate.  The areas within London were to be Kensington and Chelsea, City of Westminster and Camden or, more specifically, an area specified within the Licensing (Metropolitan Hours Area) Order 1961(a).   Though the criteria underpinning the designation of permitted areas were unclear, according to Miers, ‘The assumption (but not one ever empirically tested or in fact accepted by the Board) was that the unstimulated demand for gaming was likely to be ubiquitous rather than concentrated in particular areas of Great Britain’,  the fact remained if a casino existed outside a permitted area it would have to close.

Professor David Miers

Professor David Miers

As the Budd Report of 2001 later acknowledged, ‘areas were chosen on a subjective basis and this led to disputes’.  The Conservative MP for the Isle of Wight, Mark Woodnutt, challenged the government on this issue.  He recognised that many of his colleagues ‘would be happy to see gaming abolished altogether’; ‘…if it was to be legal, however, ‘there must be equal opportunity to participate.’  Woodnutt asked why legalised gaming was to be ‘restricted to 31 closely defined areas in England, two in Wales and only three in Scotland?’

Mark Woodnutt MP

Mark Woodnutt MP

He was supported by Gordon Bagier, Conservative MP for Sunderland South, who observed that gaming was now fairly widespread throughout the country ‘because of the accident of the 1960 Act and its interpretation by the courts’. His particular anxiety was that the government’s policy might inadvertently create an illegal gaming industry outside the permitted areas. The ‘underlying fear’ was that, restrictions of the kind proposed would simply drive gaming underground. 

Gordon Bagier

Gordon Bagier

It is possible that Bagier was representing constituency interests as Sunderland had not been designated a permitted area; Woodnutt may have had similar motives. Other objections to the permitted area regulations were raised by the Conservative, Enoch Powell, MP for Wolverhampton South-West, who complained that the regulations allowed the Home Secretary to usurp the powers of the local licensing authorities in a way that had not been anticipated when the Act had first been passed. Powell’s objections illustrate the powerful tool that the government had created with Section 22 of the Act.  It is also an illustration of the lessons learnt from the mistakes of the 1960 Act which envisaged no such powers to create regulations.

Enoch Powell

Enoch Powell

The debate over permitted areas in the House did result in some concessions from the government.  Bagier, at least, would have some cause for satisfaction. The original regulation was revised in 1971 allowing licences to be issued in any county borough outside Greater London having an estimated population of 125,000 or more.  This meant that casinos could benefit from large catchment areas. This would help to ensure that the principle of unstimulated demand remained intact as casinos in such areas could expect to survive without making special efforts to drum up business. Unfortunately for Woodnutt, the Isle of Wight remained excluded as stimulated demand would be necessary if a casino was to survive there.

Participation in Gaming

 

Though the Gaming Act 1968 sought primarily to ensure that casino operators were responsible and to restrict the spread of gaming beyond the permitted areas, the provisions contained in Part II of the Act were designed to protect the individual by limiting the extent to which vulnerable customers might be exposed to hard gaming and by making it as difficult as possible for those who were willing and eager to game to do so.  Section 12 of the Act, ‘Who may participate in gaming to which Part II applies’, was pragmatic but significant when abuses under the 1960 Act are considered.  Essentially it was now illegal for anyone to game by proxy, a provision designed partly to protect casinos from organized gambling syndicates.  Casinos could protect themselves from this threat by removing the membership of those who they believed were acting in concert to exploit the ‘house’. To gamble in a casino one had to be either a member of the casino or a bone fide guest of a member.

In order to ensure that the principle of unstimulated demand was adhered to, new members were required to have submitted a written application for membership on the premises and then to have waited 48 hours before they were entitled to game.  Section 12, according to the Bill’s introductory note, was ‘intended as a check on impulse gaming and to prevent anything in the nature of public gaming houses’. Kelly claims ‘Impromptu or impulsive gaming was discouraged by the so-called “48 hour rule”’.  There may have been other reasons for the 48 hour waiting period.  It seems likely that some Labour MPs would undoubtedly have been concerned to protect vulnerable customers from the temptations of hard gaming, particularly if they were under the influence of alcohol at the time of entering a casino.  The 48 hour rule may have been designed to minimise the incidence of impulsive, alcohol-fuelled casino gambling. It was combined with a strict licensing system which minimised the hours during which casino bars and restaurants were permitted to serve alcohol. The perceived aim could have been to minimise the attractions of the casino for anyone who was simply looking for an extension to their drinking session beyond normal public-house hours. Section 12 also required a member of the club to accompany any guest they signed into the club.  The introductory note for the Bill illustrated the belief of legislators that the position of a ‘guest’ within a gaming club had been ‘much abused’.  ‘Guests of the club’ would no longer be recognised; furthermore no-one would be regarded as a bona fide guest of a member unless ‘accompanied by that member as his host’.   Gaming club operators prior to 1968 applied few restrictions on entrance and, in Wally Birch’s case, had paid taxi drivers to bring customers to his club. Gaming ‘junkets’, organised gambling trips for tourists, in particular from the United States, were also effectively curtailed by this section of the 1968 Act.

To counter any interference in gaming by the ‘house’ it was also illegal for an employee of the casino or for anyone acting as their agent, to participate in gaming.   This eradicated certain practices employed by gaming clubs after 1960 whereby ‘ringers’ were employed either to attract customers to quiet tables or to join a game at which the ‘house’ was fairing badly and bet in a manner which would be distractive or detrimental to the gamblers at the table.  There is very little hard evidence to suggest that gaming clubs had used such tactics to enhance their profitability and, when interviewed, Wally Birch appeared reluctant to confirm or deny such activities but he did claim that some high-stake chemin-der-fer games in Knightsbridge were rigged and that participants ‘didn’t have a fucking chance’. Such practices could not to be tolerated under the 1968 Act.

The protection of the young and vulnerable was one of the three key principles behind the 1968 Act alongside keeping gaming crime free and ensuring it was conducted in an honest and open manner.  Thus, in addition to the protection offered by Section 12, it was stipulated in Section 17 that ‘no person under eighteen shall be present in any room while gaming  … takes place in that room’.    The briefing note produced for MPs elaborated further stating: The prohibition applies to club employees no less than to members and guests’.  Gaming under the 1968 Act was to be a thoroughly adult affair both for the participants and the providers.  Casino operators proved to be extremely conscientious with regard to Section 17.  Prospective casino employees were interviewed only if they were 18 or going to be 18 at the time they were expected to commence work.   At least one casino organisation negotiated service agreements with public utilities, maintenance contractors and suppliers to ensure that any staff visiting a casino in pursuit of their business also met this requirement. In these various ways the 1968 Act helped to protect the general public – and especially those deemed vulnerable – from unscrupulous casino operators while also seeking to protect the casinos from unscrupulous gamblers and criminals.

Charges and Credit

 

Section 14 of the Act dealt with charges levied on customers. The most popular game for operators under the 1960 Act had been chemin-de-fer where casino operators opted to impose a session charge on players, thus circumventing the 1960 Act.  According to Miers, chemin-de-fer, ‘…was an unequal chance game in which, because it was not a player, the club received no income from the edge enjoyed by the dealer.’   Section 14 of the 1968 Act, however, prohibited ‘any charge for gaming (apart from stakes) except as permitted by regulations’.  Legislators were keenly aware of the confusion generated by gaming law when dealing with card games within private members clubs and the subsequent exploitation of the measures introduced under the 1960 Act to legitimise ‘soft’ gaming in private clubs or for charitable purpose.  Under the 1968 Act, according to the explanatory notes, casino operators were to be permitted to make ’a single undifferentiated charge for a session of play, e.g. for the use of a card room for the evening, at a controlled rate which will be designed to allow the recovery of costs, but little more’.  Section 14 was underpinned by Section 15 of the Act which forbade a levy on winnings or stakes.  In this respect the Labour government was using the Act for two purposes: firstly, to clarify the 1960 Act in relation to soft gaming at bridge clubs and whist drives; and, secondly, to ensure that the law could not be abused commercially.

The aim of Section 16 of the 1968 Act, concerning the provision of credit for gaming, was to eradicate what were widely regarded as the most dangerous aspects of the gaming industry.  The allocation of credit to casino customers had resulted in much unpleasantness when agents employed by casino operators attempted to collect bad debts.  Gambling debts had been unenforceable by law and the spread of gaming after 1960 had resulted in a rising number of dishonoured cheques returning to the casino operator.  Most casino operators would have borne such debts as an acceptable cost to their overall business and would have been very cautious when deciding which of their customers were creditworthy.  As Wally Birch explained: ‘… I wasn’t in a position [to give credit] because we were looking to get their money – and to give credit you find you lose your customer and you lose your money’. Birch did not deny that money lending or the extension of credit to customers did not take place and cited as an example one frequenter of the Victoria Sporting Club whose sole purpose was to lend money.

However, with criminal involvement in the gaming industry becoming increasingly obvious during the 1960s, debt collection using strong-arm methods became a major cause for concern.  Joey Pyle, a self confessed ‘gangland enforcer’ collected debts for casino operators in the 1960s.  Pyle claimed one of his first gambling debt collections was from ’…Cubby Broccoli, the man who produced all the early James Bond films.’  According to Pyle, Broccoli owed £40,000 and, ‘At first refused to let us into his office and then, when he finally did, had all his minders around him.  The funny thing was, the minders knew us and once Broccoli realised that, he knew he had no protection at all.’ Pyle claimed the debt was paid in full the same day.

Joey Pyle (centre)

Joey Pyle (centre)

Section 16 of the Act was designed to protect the customer from exploitation by removing the casino’s ability to offer unqualified credit while simultaneously protecting the casino from bad debt.  According to the Act’s briefing note, Section 16 prohibited  licensed clubs ‘from allowing any form of credit for gaming whether by funding a player in advance, settling his losses with other players, or allowing his losses to the club to stand on account.’  Yet, although this appeared to prohibit the customer from any form of credit within the casino, they were allowed to cash cheques ‘to provide means for gaming yet to take place’.  This concession – which meant that customers were not required to carry large amounts of cash – left the tiniest of cracks within the 1968 Act which some operators later exploited.

The 1968 Act appeared to place a great deal of responsibility upon the casino operators with regard to credit for gaming.  Although they had often offered credit to their customers in the 1960s the vehicle of delivery of that credit varied from club to club.  A customer could supply a cheque which, if dishonoured, the casino could choose to pursue or accept as a normal business cost.  Customers could also simply sign a ‘marker’ or ‘chit’, often referred to as a ‘house cheque’, to pay for their gaming activities.  The casino offered such ‘markers’ as a matter of trust between the customer and the club and undoubtedly chose which customers should receive credit with some care.  There was little within law to protect the casino in such matters. Finally, the casino operator might advance a personal loan to a customer, a practice avoided by legitimate operators but utilised by the Krays at Esmeralda’s Barn.

While prohibiting the use of ‘markers’, cash loans and house cheques the 1968 Act sought to balance the interests of casinos and customers in relation to credit. Customers were permitted to cash personal cheques with the casino as long as it was then ‘delivered to a bank for payment or collection within two banking days’.  This could not ensure that the customer’s cheque would eventually be honoured, however, it was hoped, as the briefing note issued to MPs explained, ‘To instil a sense of responsibility into the players, and to remove the temptation to recover the money by blackmail or intimidation, the statutory provisions invalidating such cheques are abrogated’.  In this way Section 16 attempted to remedy the excesses that had been evident in the 1960s.

The Workforce

 

The government’s determination to ensure that the abuses of the 1960s were eradicated was also clear in the provisions of the 1968 Act regarding those who were permitted to work in the gaming industry. Section 19 of the Act required ‘gaming operatives employed in licensed clubs to obtain certificates of approval from the Gaming Board’; moreover, it empowered the Board ‘to require any person appearing to it to be acting as a manager, supervisor or organiser of gaming in any licensed premises to apply to it for such a certificate’.  The Gaming Board was to control, through the issue of gaming licences, all employees directly involved in gaming in Britain.  All employees – with the exception of receptionists, waiters and others not directly concerned with gaming – required licences to perform their various duties within the casino.  In practical terms the licensing of gaming staff would impact upon the new industry as strongly as some of the financial and membership regulations.  The stringent nature of the new licensing system was illustrated by the Gaming Board’s first Chairman, Sir Stanley Raymond, who informed a press conference that: ‘Only people of the highest repute would be granted certificates by the board to operate gaming clubs.’  The principle of ‘highest repute’ would also be extended to the casino staff.  The licensing criteria applied to casino staff would impact upon the practical operation and the required staffing levels for casinos under the 1968 Act.

Sir Stanley Raymond (Getty Images)

Sir Stanley Raymond (Getty Images)

Regulation and licensing influenced the working practice and environment of the casino workforce.  The licences available to casino staff were issued under a colour coded system.  Croupiers were required to hold a Blue licence which enabled them to deal casino games and little else.  Table supervisors needed to hold a Yellow licence, ‘Pit Bosses’ a Green licence, managers a Grey licence and senior directors or casino operators were required to hold a White licence.  These licensing requirements made casino operations more labour intensive.  Many began to organise their table supervision on a one to one basis; one croupier and one inspector per table.  Though the Act was silent about staffing levels on the gaming floor, the Gaming Board would advise or suggest on what they believed were the required levels of supervision within a casino and this established a de facto minimum of one Inspector for every two tables.  The Gaming Board also insisted upon the presence of at least one Grey licence holder on the gaming floor at all times which ensured that casinos employed a larger number of managers than a corresponding Bingo operation.

Regulations, Responsibility and Machines

 

Section 22 of the Gaming Act gave the Home Secretary a ‘variety of regulation-making powers’.  As the briefing note for MPs explained, he was empowered to:

… prescribe the manner in which rules of games are to be displayed, and records of cheques are to be kept … and, in general, to make regulations to prevent unfair play in licensed premises or the evasion of restrictions by either licensed or registered premises … to add to the grounds upon which licences must or may be refused, or to require restrictions to be attached to licences …

This was underpinned by Section 23 which made it clear that a licensee could not seek protection from any breaches of the Act by blaming the management or a member of staff.  Effectively, blind justice would be administered upon those found to be in breach.  Section 23 was in turn supported by Section 24 which empowered the courts, if a licensee was found guilty, ‘to disqualify the premises concerned for a period of up to five years, with consequential cancellation of the licence’.  Thus a licensee found to be in breach of the Act could lose their operators’ licence and possibly also the use of the building in which their casino was located.  This could be extremely costly, bearing in mind that some of the newly-legitimised casino operators had premises purpose built.  According to Miers, ‘The impact of disqualification on the market value of those premises can therefore be very substantial, in the centre of London running into millions of pounds.’

Whereas Part II of the Act dealt with gaming in licensed or registered premises, Part III was solely concerned with gaming machines.  There was an acknowledged problem with the provision of gaming machines or slot machines on premises which were deemed unsuitable.  According to the briefing note prepared for MPs,  such machines were now to be found in public houses, coffee bars and restaurants, ‘which are not true amusement places’.  The note continued by stating: ‘One of the purposes of the Act is to restrict this development without interfering unduly with the traditional and long established business of amusement caterers’.  Slot machines had become a lucrative business and some criminal entrepreneurs, realising the potential, had exchanged protection services with casino operators in return for the slot machine concession within a gaming club.  The Act sought to limit the public’s access to gaming machines.  In the case of casinos they were to be severely restricted to a specific number of machines – not more than two – on their premises.

British casinos were therefore denied a major source of revenue which gaming operators in other jurisdictions enjoyed.  This particular consequence of the Act would do as much to shape the gaming experience in British casinos as unstimulated demand.  The cacophony of sound originating from a vast array of gaming machines which greets visitors to American, Australian and, to a lesser extent, European casinos, would be absent from British based casinos.  However, the restriction of gaming machines to two was not unopposed.  According to Kelly, ‘The government rejected a Tory attempt to allow the Board to increase the number (of machines) for member’s clubs.’  The government’s determination resulted in a more genteel atmosphere which helps to perpetuate the image of gaming as a gentleman’s pursuit, not dissimilar to that which was available in the late eighteenth and early nineteenth century at the time of Crockford.

"Father of Hell and Hazard" , William Crockford

“Father of Hell and Hazard” , William Crockford