The existence of the punchboards dates from the 1800’s.At the beginning of the 20th century,the punchboard business boomed and according to some reports,approximately 40 million punchboards were sold between 1910 and 1920. Back in the days the mob had many rackets such as bootlegging booze and extortion but during the 20’s and 30’s,many gambling devices were sweeping the nation and one of them was the punchboard.Yes,one of the most common racket of all time was the punchboard racket wich made millions of dollars for the mob,an ammount similar to the policy racket.It was also a nickel and dime game,but it added up a lot of money for the mob and it was second after bootleging.
Photo from the Las Vegas Mob Museum
Punchboards were large cardboard rectangles about an inch thick and numbers in 1000(or 1200) circle holes were arranged across the front of them in bright colors. The boards were placed in many different types of establishments like hotels, night clubs, taverns, restaurants, candy stores,gas stations and even around schools.Also they could be found next to the cash registers,tobacco and news stands and belive it or not also drugstores.For example,you pay your nickel or a dollar,and punch a piece of paper out of a round hole and hope that when you unroll it and you would find that you had won,for example 10 bucks or more or some form of prize.Naturally, most of the punches produced no prize at all.Sometimes products like lighters or cigarettes were also given out as prizes to get around the law.In other examples,sometimes the punchboards were sponsored by various charities and with that the operators or the mobsters escaped prosecution.However,since the boards were easily hidden,it was difficult to catch the operators,especially if they had a tip-off before the raid.We cannot say that the punchboards were illegal because the U.S. government could never quite decide whether punchboards were illegal so the boards became a common thing.Also the state used to recive 3% of the value of every board that was sold so everyone was happy.
There were over 30 punchboard manufacturers in the United States.In Chicago were the biggest manufacturers and probably was the largest market for punchboards. There was about 7 leading producers and the total sales by all manufacturers was about $10,000,000 annually.The producers of the boards made the so-called straight money but the real big dirty cash was made by the gambling operators.Punchboards varied in price from $2 up,so that means a common type of board which sells for $2 will pay out $80 in prize money on a $120 total play, a $38 profit on a $2 investment. If, as sometimes happened, the board was destroyed before the large money prizes were punched, the profit was greater.The take from the punchboards was fantastic in amount and supplanted prostitution and bootlegging as the chief source of revenue for organized crime.The penalty for the punchboard sellers for failing to come to the terms of the Outfit was continual harassment by the police and or the gangsters themselves.The punchboards were ingeniously hidden inside of fake cigar boxes, candy boxes, briefcases, books, and transported around the U.S. and sometimes the punchboards were used for fundraising, sales promotion or gambling,all at once,just to turn your attention.
Back in the days,during the mid 1920’s the Capone gang passed the word along the suburbs that they wanted to install punchboards around the locals.The merchants that wouldn't buy the boards were pressured by the mob and in the end everyone took the boards.But not quite everyone…Roger“The Terrible”Touhy for example,was a big time gangster,racketeer and beer king who ruled the North West Side and held more than 150 joints together with his gambling boss Matt Kolb.Tohy kept things nice and neat and he didn’t want to share and didn’t want any outsiders on his territory.So during the mid 20’s Al Capone wanted to place punchboards all over Touhy’s territory and sent guys,Frank Rio and Rocco DeGrazia to scare Touhy a little bit.But Touhy was no easy target and refused many times and he also approached the local law enforcement officers and others to ask for their support against the Capone mob. Now Capone wanted the Touhy “gang” out of the picture.The Outfit needed to use force because every time when the Capone gang wanted to place their punchboards,all of the merchants refused.Also Jake Guzik and Murray Humphries tried to sweet talk Touhy from time to time but that didn’t worked ether.So on October 25 1931, Al Capone was convicted of income tax evasion and sentenced to ten years in prison and that same day Touhy’s right hand man Matt Kolb was killed at his speakeasy gambling club, the Club Morton on the corner of Dempster and Ferris Road.The shooting suspects were Paul Ricca and Red Barker. Kolb's death was a major setback for Touhy because he lost a big part of his gambling empire and with that a vast amounts of cash and also the political protection that Kolb had.Two decades later Touhy layed in his own pool of blood,courtesy of the Chicago mob.
Also during the late 20’s and early 30’s the Outfit placed its foothold in Miami,Florida.A lot of gangsters back than used to have their own joints,houses and criminal operations in that area.Theres an old story that when Capone used to visit the Palm Beach Hotel in Miami back in the mid 20’s,he used to stop by the stands every day and played the punchboards.But he never won until one day he unrolled the slip of paper he had punched out, and found that his prize was a $5 gold piece.Capone was so happy and proud he handed it to shop keeper and said, "Here, kid, keep this for good luck."A Miami grand jury reported that "in much of the city, residents and tourists alike could find numerous street machines, punchboards and other gambling devices that even little children may play without being molested."Mobsters like the Fischetti bros and Jake Guzik sent their own men wich placed and oversaw the gambling operations in Miami.Later among the leading hoodlums in the restaurant, night club, bar, and tavern businesses and also placing punchboards were Ralph Capone and Charles Fischetti.Some reports say that duiring this period Guzik made a connection with New York’s big shot Frank Costello and expanded the punchboard business around the country big time.
Back in Chicago,in 1939 Jimmy”The Monk”Allegretti lived on 822 South Bell Street and his first big business were the punchboards.He sold punchboards for the Outfit and made a lot of cash for starters.By this time the use of punchboards for gambling was on the increase.Allegretti also started to sell a new variation of the punchboards and that was the penny only punchboards which were great attraction for children because if they won they got themselves a play doll or a box of candy. It is, not possible to estimate the annual sum played on punchboards but some reports say that during the late 30’s and early 40’s the Outfit made almost $20,000,000 a year only from the punchboard business.
By the early 1940’s a new player showed up in town by the name of Jack Ruby. In 1941, he and Harry Epstein organized the Spartan Novelty Co., a small firm that sold various gambling devices known as punchboards.Ex-cops and Outfit associates Earl Ruby and two of Jack Ruby's friends, Martin Gimpel and Martin Shargol, were also the players in this business.Ruby also made connections with New York and expanded his punch board business big time. Virgil Peterson of the Chicago Crime Commission drew law enforcement's attention to the existence of this company and Ruby’s connections, but later the investigation failed for unknown reasons and the gambling operation lasted less than 2 years.
Also in 1948 Chuck Giancana,the brother of future boss Sam Giancana,was arrested for smuggling gambling devices such as punchboards that were found in his car trunk.
During this period a lot of small operators started to get involved in the punchboard business and they all had too pay street tax.The punchboard sellers had been given the terms that they must come with the the Chicago crime syndicate or else.Small operators had small printing machines and they usually made pushcards that can be printed by almost any job printer,but the punchboard required expensive equipment.During the mid 40’s the biggest companies that produced the punch boards were the Bee Jay Co., Gardner & Co. and the Sax companies wich were operated by M. Robert Sax and they were separate corporations, but owned by the same people and back in thouse days their boards were in every location in the country.Robert Sax was the brother of Outfit associate George Sax,also part owner of these companies. The most significant scam between these product companies and the underworld was the selling of keyed punchboards, which means that they sold the punchboards to the mobsters and they also recived a key or a map showing all the winning numbers. For example,the retailer who buys the board can punch out all the winners and the entire take will be profit and he won't have to pay out any profit at all.Purpose in having a key would be to enable the operator, either himself or friends of his, to hit the lucky number and gyp everybody else because this was a gyp game.But no matter how much millions of dollars the Sax companies made,in the end the Outfit made double of that.George Sax also had connections and owned a lot of locals in Miami.In the late 40’s and early 50’s the “punchboard king” had a large investment in the Saxony Hotel together with Guzik’s guy,Joe Epstein.
But in the late 40’s the United States banned the slot machines and in the early 50’s the punchboards again blossomed out all over the country and the sale and distribution of punchboards were pushed by methods similar to those used with the slot machines..In 1951,the Kefauver Senate Crime Investigating Committie in Washington studied the punchboard business and found an evidence of widespread organized criminal activity,especially in Florida and the Chicago area,in connection with various forms of gambling such as the punchboards.The attorney general Fred Howser attempted to organize a State-wide system of protection for the distribution of punchboards. The whole government was confused because the ban did not existed for the punchboards because of the difficulty of definig them.During the early 50’s Charlie "Cherry Nose" Gioe and Jimmy Allegretti together ran the punchboard business in Chicago and Miami.When Gioe was shot to death in 1954 Allegretti took over the board operation.Don’t get confused with Allegretti’s business because his main rackets were prostitution,extortion,slot machines but not punchboards.Althou It was far more difficult to hide the slot machines and prostitutes than the punchboards.
80 million punchboards were sold by the late 1950’s and that period was also the beginning of their end.Now organized crime looked at Las Vegas gambling that already came up in the late 40’s and the Chicago mob saw a new way for making the big buck.Jake Guzik,the Outfit’s gambling czar died in 1956 and Hyman Rubenstein,the other brother of Jack Ruby, on June 5,1964 testified that he used to cover the Chicago territory during the 40’s with punchboards for many gambling operators.Allegretti was jailed in July 1965 to serve a 7 year sentence and when questioned by the FBI about Jack Ruby,Allegretti admitted he might have seen Ruby back in the old days but became agitated when the FBI pressed the issue and than he said that Ruby was not mob connected.Allegretti died from diabetes in 1969 and by the early 1970s the punchboards had been outlawed in most states around the country and the Outfit was mostly concentrated in the Las Vegas gambling scheme and bookmaking.Las Vegas was far more livable and had a lower crime rate than dozens of other American cities that don`t even allowed punchboards.The illegal punchboards have been replaced by lottery games,riverboat casinos and poker machines so the boards were forgotten by the gambler and the racketeer and remained in mob history as one of the oldest big time gambling rackets.
This article is made from various infos that can be found on the internet.cheers
