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MAKING CRIME PAY

Lesson 4

Besides, all the little regulations were irksome.  The rule that a player had to write out a cheque each time he wanted credit in the course of the evening, instead of just consolidating the total amount on one cheque: instead of just consolidating the total amount on one cheque the poker rule that a player should never get new credit if his previous cheques had not been cleared.  With Middle Eastern banks no one had ever seen or heard of, who in hell knew what was going on?  And with a man dropping half a million over a weekend, it didn’t seem prudent to inquire too closely.  These were ‘technical’ issues.

            The casinos got careless as well as greedy.  That was how the ‘casino wars’ began, though even so, the in-fighting would not have got out of hand had the principal personalities involved not been, personally, so antipathetic: Cyril Stein and Victor Lownes.
            Stein had built up the Ladbroke’s bookmaking business to become the biggest and most successful group in the country.  He came from a shrill, street-wise London background, and on the way up had acquired all the skill and had graft associated with the bookmaking business.

  (Another side of his life, which few knew about, was his total dedications to Zionist fund-raising which prompted the quip that, thanks to Stein, the Israeli economy was being fuelled on Arab petro-dollars lost at the tables.)  His casinos were a new venture and immensely successful.  Lowers, by contrast, was the playboy of the western world, Hugh Hefner’s man in London.  He led a free-wheeling, fast talking life, hosting celebrations every weekend at his ‘school’ for Playboy banners down at his elegant country house in Hertfordshire.  The thriving British gaming operation had turned out to be a financial life-saver for the then ailing Playboy group.

            The falling out of the two men came over the pursuit of the high rollers. The story, as revealed in the satirical magazine Private Eye,  was sensational Ladbroke’s was said  to be running an undercover operation to note down the registration numbers of all cards taking gamblers to rival clubs like the Playboy and the Clermont, and then paying 50p a time to an illicit contact working on the police national computer in Nottingham for each number to be checked out, so as to trace the name and address of the owner of the vehicle.  The punters, having been identified, could been be wooed across by personal invitations to wine and dine at the Ladbroke  club.

            The story was news to Lownes too.  He confronted Stein head on.  He had already warned Ladbroke’s that Playboy was going to support the police in their objections to his sort of thing, which was a very big step to take against a business rival in effect a move to drive the casino division of labroker’s, then ringing up £ 25m a year in profits, right out of business.  The dispute came into the open at a meeting of the Association of British Casinos in May, 1979.
            Lownes, according to his own account (Playboy Extraordianary, 1982)  figured that not to protest was another way of saying ‘Oh, well.  We’re all at it.’  He did not intend to help the police directly.  ‘But I wanted to go formally on record as raising an objection.  And if Stein had behaved differently at the meeting instead of threatening me as he did, that is all I most probably would have done.  Only after he threatened me did I bring in our lawyers and get really involved.

            Stein made a statement, according to Lownes, which directly challenged everything  Lownes stood for.  ‘He wanted , he said, to drawing poker the Association’s notice to the fact that Playboy was objecting to renewal of his licenses.  His words were: ‘I’d like to say that if Playboy doesn’t withdraw its objections, the mud’s really going to fly.  And it’s not just going to the fact that Playboy.”  Lownes’ reaction, scribbled on a note to a collegue sitting next to him was typical: ‘Fuck em.’

            By this date, the bloom had gone off the casino industry.  The flow of petro-dollars was drying up.  True, the clubs were still coining  money hand over fist.  But there was a nasty smell in the air over Mayfair, the slick smell of corruption.  There had been too such money around, too much temptation.  Skimming and other malpractices were coming to lift in dark corners.  In November 1979 the Coral Group, a household name in British bookmaking, was disgraced.  Its top casino executive, it transpired, had been nicking five thousand quid a week, just like that, over a period of 18 months – there had been an elaborate abuse of the credit regulations  for certain Arab high rollers.  The clubs were shut down.  Old Joe Coral was a broken man and his son Bernard departed to run a luncheon club off Fleet Street.

            The Gaming news Board at the national level and Magistrates Courts locally were reacting severely.  Amid all the public scandal and litigation, several clubs lost their licences, including the Victoria, a chromium temple of middle-class gaming in the Edgware Road.  In one of his most spectacular coups, Lownes bid for the place, later winning back its license on appeal.  It was a famous victory but it did endear him to prim officialdom.  Overall, there was a suspicion that the casinos were getting out of hand and, in consequence, a growing sense of public unease.
            Lowness was really beginning to relish English life.  The go–go Playboy and upmarket Clermont were the two best clubs in town.  With his movie-star salary, his ridign to hounds, his swinging parties, his clutch of toothsome bunny girls waving him on Lownes had it all.

(Could anything be more revealing of the way the English run things than the fact that Lord Allen of Abbey field , the then chairman of the Gaming Board, was paid a part-time salary of around £ 60 a week, while Lownes was the highest paid executive in the whole country?) The only thin Lownes had to do to say on top was run his gaming operations according to the book.
            And the ebullient Victor took the book to heart.  He began going around making speeches extolling the virtues of the British gaming industry.  Riding the wave of his own propaganda, like his bay hunter taking the fences, he cast himself as Mr. Clean.  His opposition to the renewal of Stein’s licences was not, in his view, a gigantic bit of chutzpah, but motivated by the desire to clean up the industry etc.  He informed Stein that he was in favors of full disclosure   of all the facts and figures, as a poker basics for reform of the tax system of casinos.  Stein, narrow-eyed, would have none of it.       

     After Stein repeated his threat, that the mud would fly, Lownes thought he had better run a check over his own clubs’ operating procedures.  Everything was fine.  Lownes’ staff assured him the business was a hundred percent clean.  Well they would, wouldn’t they?  Lownes went right on partying and hunting and starring in the gossip columns, unaware of the cardinal but unwritten rule of English social life you can live how you like, and do what you like, but you must never, ever, flaunt it.

            What schemes were smouldering in Cyril Stein’s breast were not revealed.  For one thing, he did not commit his thoughts to the media; for another, his own secretary claimed that senior executives had ordered vast quantities of documents at Ladbroke’s to be shredded, ahead of the police investigations which did not given Stein as chairman (though he denied the charge ) quite the Boy Scout image his shareholders might have wished.  In any case, it required little imagination to guess the form of Ladbroke’s revenge: for it rapidly emerged that in their mania to scoop up all the ‘mud’ they could find on Playboy’s operations, the company was actually paying out substantial sums to its former employees.  (Bunny, by Russell Miller., 1984, details the whole story.)

            In due course the hearings of the case against the renewal of Ladbroke’s licences camp up, Stein, in the witness box, got grilled.  The defence was as full of Gruyere cheese and was no surprise when Ladbroke’s three top clubs in London were ordered to be shut down.  Soon after, Stein sold the rest of the group’s casino interests, while there was still something left to sell.  It had been a total a total debacle.  Victorious Victor was left with the field of the cloth of gold virtually to himself.

            Nemesis was not long in striking the victorious playboy down, physically as well as financially.  On an icy day out hunting, his favourite horse lost its footing and Lownes was thrown, sustaining severe concussion.  While he was still in hospital, the police launched a mass raid on the Clermont and the Playboy clubs.  Scores of officers went in, names and addresses of everyone present were taken all the papers and records  were seized.  Whether mud from Ladbrokes had stuck or not was beside the point; this time it was clear that the police were out to get Playboy.  Lownes professed to be amazed; he put it down to the police wanting to show they were getting busy with all the clubs on principle.            

He was right in one way and wrong in another.  There was no bribery and corruption, no fraud, no cheating of customers, nor any other criminal offences at his clubs.  What was uncovered were ‘technical’ offences against the Gaming Act – muddles over cheques and the granting of credit cheques had been drawn on non-existent bank accounts by some of the Arab players, new credit had been extended when previous cheques had not yet been cleared, and so on.  It was in fact a ‘grey area’ of the law, but one which the authorities  now chose to interpret strictly.  In another incident (which Lownes himself had put a stop to ) hotel porters had been given honorary membership of clubs to enable them to introduce new online poker players.  And one of the directors, Liberal MP Clement Freud, had been foolish enough to gamble on the premises, which was likewise against the rules.

            Over in Chicago the top brass in Playboy organization, who had been scheming for months to get rid of the free-wheeling Victor, finally saw their chance.  While the casinos in London were in effect funding the entire Playboy operation, Lownes had been untouchable.  The police raids gave them a golden opportunity to persuade Hefner to give his old friend and fellow swashbuckler the chop.  His dismissal, which came as a thunderbolt to Victor, was front page news.   New management under a retired British admiral (whose previous job had been running car parks) was hurriedly installed, on a pledge of strict compliance with the law.  Unfortunately all this served only to confirm the authorities basic objection that real control of the company was vested in Chicago not London.

            Lord Allen and Gaming Board, stung by many pricks, opposed renewal of Playboy’s licences.  A phalanx of lawyers, hired by each side, prepared for a long and juicy argument. The Playboy people, however, chose to defend their record without calling on Lownes as a witness, and to answer the charge the ultimate condemnation in British gaming law that they were ‘not fit and proper persons to run a casino’ off their own bat.  They were probably bound to lose, and they did.  There were long faces up in the boardroom, and even longer transatlantic calls to the Playboy Mansion in Chicago.
            Faced with the cost and uncertainty of going to appeal, the boys in Chicago (the group was already running onto the rocks in applying for a licence in Atlantic City) lost their nerve.  Just a year and half after Ladbroke’s ignominious withdrawal, Playboy followed suit.

  All its golden gaming interests in London, lock, stock and limousines Lownes had a fleet of them for ferrying customers around town were sold off in a desperate liquidation to the first buyer it could find, a provincial company operating TV franchise.  (The new owners parlayed their £ 14m investment seven-fold in four years, selling out for over £ 100m.)  Lownes, insouciant as ever, flew off for a vaction and talked of opening night club.  I was not the only one who felt he had brought a much needed note of gaiety to the British gaming sconce, which has become very dull and understandably) cautious since he left it.
           The case showed that mere ‘technical offences’ concerned with credit and clearing cheques, minor matters of procedure, with no suggestion of criminality, could bring down a big company, not-withstanding the fact that it was earning foreign currency, paying bog taxes and providing thousands of jobs.  But that’s the British way.  I am not suggesting it’s better than the europe and america way, just different.

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