Oaklawn in Hot Springs, Arkansas operates a licensed casino today. Nothing remarkable about that.
What is remarkable is that the same town ran what Robert Kennedy, as Attorney General in 1962, called the largest illegal gambling operation in America. Not a speakeasy. Not a back room. More than ten major casinos operating openly, with the mayor’s blessing, for roughly a century.
Arkansas voters approved a constitutional amendment authorising casino gaming in November 2018, and the framework that followed was deliberately narrow, a small fixed number of licences rather than an open market. The Newgamenetwork website tracks which properties hold them and how each was awarded, and the concentration is unusual against most states that opened after 2018.
Ninety years earlier, the same town had ten of them and no licences at all.
A Century, Not a Phase
The scale is the part that gets underestimated.
Hot Springs ran illegal but wide-open gambling from the late 1860s until the late 1960s, interrupted only three times: briefly around 1900, again just before the First World War, and for a couple of years after 1946. That is the only place in the United States with a record like it.
The heyday ran from 1927 to 1947. More than ten major casinos operated alongside a scatter of smaller houses: the Southern Club, the Ohio Club, the Arkansas Club, the Indiana, the Illinois, the Kentucky. The Arlington Hotel had been there since 1874.
In 1931, a town of 16,000 people hosted roughly fifteen times that number of visitors. By the early 1960s Hot Springs ranked fourth in the nation for visitor volume. It genuinely rivalled Las Vegas until Teamster money built the Strip.
And the guest list reads like a casting sheet. Al Capone, who had his armoured 1928 Cadillac shipped down by rail from Chicago so he had something to drive on holiday. Lucky Luciano, Meyer Lansky, Bugsy Siegel, Albert Anastasia, Frank Costello, Mickey Cohen, Carlos Marcello.
Luciano’s stay ended badly. In 1936 he was at the Arlington with the dancer Gay Orlova when a New York officer, in town on an unrelated case, spotted him strolling near the bathhouses alongside the local chief of detectives. An extradition fight followed, and he went east to trial.
The Locals Owned It, Which Is the Whole Point
Here is where the received version goes wrong, and it matters for understanding the pattern.
Hot Springs was not a mob town in the sense people assume. Gambling there was primarily controlled by locals. The first real impresario was Bill Jacobs out of Memphis, who ran six clubs. After him came Jack McJunkins, then H. Dane Harris.
When Jacobs died, insiders approached Frank Costello about taking over. He declined. When Sam Giancana inquired about buying a share in the 1960s, he was turned down flat.
The visiting gangsters were customers. Hot Springs was somewhere they went to be left alone, soak in the baths and lose money without anyone shooting at them. Owney Madden is the exception that proves it: born in Leeds in 1891, raised in Hell’s Kitchen, and permanently resident in Hot Springs from 1935 after a doctor suggested the thermal water might ease the pain from his accumulated bullet wounds. He married the postmaster’s daughter, kept chickens, tended a flower garden he had learned to like in Sing Sing, and ran a wire service until he died in 1965. The Encyclopedia of Arkansas records him as a fixture of local charity work.
Madden is also credited with making the town the birthplace of the wire, the system that moved race results between tracks and made off-track betting possible.
The Legal Trick That Kept the Feds Out
This is the detail worth the price of admission.
Federal law reached interstate commerce. So Hot Springs simply never engaged in any. Operators manufactured their slot machines and gaming equipment inside state lines, and hired only Arkansas locals to deal the games.
Nothing crossed a state border. No federal hook.
Kennedy understood the problem and asked Congress for new powers specifically to get around it. Madden was hauled before the Senate rackets committee in 1961, chaired by Arkansas’s own Senator John McClellan, and took the Fifth repeatedly. The Mob Museum has a decent account of how long that stalemate held.
Meanwhile Dane Harris opened the Vapors in 1960, a million dollars of Tiffany chandeliers and mahogany with a casino attached and a showroom that booked Liberace, Jerry Lee Lewis, Red Skelton and Les Paul.
The Same Shape Elsewhere
Two other Southern towns ran versions of it, and the ingredients were consistent.
Phenix City, Alabama sat across the river from a large army post in Georgia, which supplied a permanent transient population with money and no local ties. It became notorious enough that the 1954 killing of Albert Patterson, the state attorney general-elect who had campaigned against the rackets, brought in the National Guard.
Biloxi and the Mississippi Gulf Coast ran gambling and liquor along Highway 90 in a state that was formally dry, serving both tourists and a nearby air base, until Mississippi legalised dockside casinos in 1990.
Three towns, one recipe. A pre-existing reason for outsiders to arrive, whether baths, beaches or barracks. Local ownership rather than imported. Political integration so complete that the operation and the town government were the same thing. And a jurisdictional seam to hide in.
How It Actually Ends
Not with federal intervention. With a governor deciding.
Orval Faubus had taken money from the Hot Springs combination for years. In 1964 he shut it down anyway, and the final wagers were placed on the eve of Easter Sunday. Gambling crept back briefly.
Then Winthrop Rockefeller won the governorship in 1966, hired a former FBI agent named Lynn Davis to run the State Police, and sent troopers in. Davis confiscated the equipment, burned it, and buried what would not burn twenty feet underground.
Even then the political capital held. Davis raided a Little Rock club and arrested its operator, and a circuit judge reduced the charge to a misdemeanour.
What the Return Looks Like
Fifty years on, Oaklawn runs a legal casino in the same town, under a licence issued by the state that once buried the equipment.
That circularity is common enough in American gambling history to be almost a rule. A place develops the trade illegally, gets cleaned up in a burst of reforming energy, and re-authorises it a generation or two later once nobody involved is still alive to be embarrassed.
Which is genuinely better source material than most of what gets filmed. Our earlier look at why casinos make perfect backdrops for action movies covers the fictional version. Hot Springs is the one where the mayor was in on it, the slot machines were built in-state to dodge the FBI, and Capone brought his own car.