The South Sea Bubble was a giant speculative scheme that rocked England at the beginning of the 18th century.  No professional gambling, gambler as such, originated or operated the scheme; but many were to thrive beneath its respectable cloak.  For at the beginning the scheme was perfectly honest and respectable.

It was originated in 1711 by Robert Harley, Earl of Oxford, the Lord High Treasurer of Britain.  He formed a company (the South Sea Company) with the object of exploiting trade in the South Seas, and was granted a monopoly of British trade with South America and the Pacific Islands.  At first all went well.  In 1718 the king became governor of the company, and the directors declared that they would take over the National Debt (worth about $ 260,000,000) in return for further trade concessions- and that they would pay $ 17,500,000 for this privilege.  When their offer was accepted by the government in 1720, the company’s shares rocketed overnight.

   

Cheating at baccarat usually requires the croupier’s co-operation particularly in small gambling clubs where players are given an opportunity to shuffle the card games before the croupier stacks them in the sabot (dealing box).  Far left, a batch of prearranged card (here with red backs for identification) is introduced into the game by a cheat.  Left, the croupier places all the cards into the sabot, taking care not to disturb the order of the inserted batch.  The cheat waits for his sequence of cards to appear (right), then plays and bets accordingly.

The extraordinary success of the South Sea Company encouraged imitators, anxious to cash in on the sudden boom.  Soon a host of ludicrous ventures were being advertised, and thousands of gullible people rushed to throw their money into the hands of the professional swindlers who promoted them.  The prospectus for one of these ventures announced that a company was being formed “for the carrying on of an undertaking of great card game advantage, but nobody to know what it is”; another was to finance a firm for the melting down of wood shaving that were to be “cast into planks”; and another had plans for especially bottling South American sunlight “for release in less salubrious climes in times of inclement weather.”

These “fringe” companies wee condemned bitterly by the parent concern, but it was too late.  By August 1720 the bubble had burst, and the price of South Sea stock began to topple.  Thousands of people who had invested their money in both the real and bogus companies suddenly found themselves penniless.  Many fled the country, many committed suicide.  (Over 800 suicides were directly attributable to the calamity.)  The government set up a court of inquiry and discovered that even the South Sea Company itself had been swindling the public: For by bribing certain ministers, the directors had managed to get the company’s share value raised to an artificial level.  Robert Walpole, the prime minister, immediately confiscated and sold the property of the directors (who included several senior government ministers) and allocated the money to the victims.  But he was unable to check the wide-spread disaster.

A set of marked cards.  kinds of cards may be marked in a great number of ways-by adding spots or lines to the design on the back, by thickening lines, by shading, and so on.  In this instance each card has been marked with a shaded square.

The recent “casino investment “ concern to which I referred earlier is really a small-scale repeat of the South Sea Bubble.  It was heralded by a number of posters that began to appear in the windows of empty shops in London, Liver-pool, and Manchester in 1962.  The advertisement offered a weekly income of $ 17 for every $ 280 invested (an interest rate of 260 per cent).  Investors were invited to apply for pamphlets that explained the system in full detail: “Our organization operates at continental casinos, using operators who have expert knowledge and practical play poker experience in playing in the game of roulette.  Our system is infallible subject to sufficient funds being available…The proof of the soundness of this system is the fact that no investor has ever lost a penny of his capital.  We publicly challenge any mathematicians or so-called ‘experts’ to disprove our claim.”

One of the many posters advertising the fraudulent casino investment scheme that appeared in Britain in 1962.  the posters promised $ 6 ($ 16.80) a week income for every $ 100($ 280) invested.

Many Britons invested sums of up to $ 280 in the scheme, and for a number of weeks received dividend checks at the proper interest rate.  These were accompanied by a letter saying that the capital sum could be withdrawn at 30 days’ notice.  Then, suddenly, the checks stopped arriving.  The office of one firm was found to be abandoned; the staff of another lost its managing director, who had “gone to the continent in connection with the learn casinos game ” and forgotten to sign checks before going. The police discovered that none of the 20,000 checks.  They also found that the men responsible for the “casino enterprises” had made a profit of about $ 280,000.

Police were called in when confidential records of investors were found in an ash can outside the firm’s London office (right ).  Far right, an investor quizzes a policeman about her money.

So much for the professional cheat, whose activities are outside the pale to both honest gamblers and anti-gamblers.  The next character to be looked at in our story of professional gambling the bookmaker holds a much more ambiguous position.  In countries like America, where his profession is illegal, he is considered a not-so-petty criminal.  But in countries where bookmaking is legal, he is an above-board business man who usually adopts a business like approach to gambling.  We have already looked at the bookie in action (both legally and illegally) in earlier chapters; here we can detail some of the mechanics of his highly professional activities.  Of course, like all business, bookmaking has its ups and down; but (as one British bookmaker told me) it can be the “most pleasant and bother free” of occupations once the business has been set up.  But to get established a bookie needs amounts of money and persistence “that would make the non-gambling mind boggle like a seismograph.” This was my informant’s personal story:

“You can’t imagine what a job I had getting started.  Nowadays it’s relatively easy. Under the new Act [i.e., the Betting and Gaming Act of 1960 that legalized off-course bookmaking] you’ve got to have a license from the Watch Committee [a town’s official guardian of public morals] to start a betting shop, and they never object so long as nothing’s known against you and you can find somewhere to open up.  As far as they’re concerned you can start tomorrow- unless there are objection from the other bookies about taking their business.  But you fix that first if you’ve any sense.

“It wasn’t that easy when I started in 1929.  I had been working as a plumber’s mate and I was getting nowhere fast.  Then I had a real stroke of luck: A relative died and left me a small legacy.  I say ‘small,’ but it was a fortune then-$ 500 [about $ 1400].  I’d always been keen on types horse racing and seized the chance to start my own bookie business.

“But in those days you had to be really careful.  You were allowed on the courses, but the only way to get the back-street business was to have ‘runners’ bringing it in on the quiet.  You had to pay them a percentage, win or lose, and you had to pay their fines when they got caught.  What with that and my losses I was down to my last pound within two weeks of starting and I had to go out of business for a week until I’d turned that one pound into 20.  And the same thing happened to me at least two dozen times during the next couple of years.  It was always the same problem – shortage of capital.  For in addition to the running expenses (which included clerks’ fees and their fares) there was the protection money you had to pay too if you didn’t want to be beaten up and have your stand wrecked.

“Apart from the capital, a bookie must have a feeling for odds: I don’t mean just the ability to work things out mathematically as an accountant would, but rather a feeling inside that tells him when to shorten or lengthen odds.  And, believe me, this takes a long time to develop.  I know one chap who ruined a good  business simply because he didn’t have the flair for odds.  You must have them working on your side.  For that’s how you make a profit.  A couple of big mistakes and you can be out of business for ever.

“Another bookie I know had really bad luck not with his bets but just with circumstances.  First of all he made an enemy of the police because his runners kept getting caught; then he got beaten up for not going into a protection racket; and finally he lost and lost until he was unable to pay his debts.  After that he got warned off all courses and was finished.  I tell you, it’s a tricky game.  But I wouldn’t have changed it.  you get plenty of excitement, and once you are in the money you can extend operations operate a football-pool syndicate, take bets on other events like tennis matches or prize fights.  Or you can build up a postal betting on poker business, like William Hill, or start in the manufacturing business, like Little woods.

“I’ve personally done what most of the boys I know have done: As soon as the 1960 Ace came in I opened a small betting shop, put a manager in, and kept the course work for myself.  There’s nothing like it.  The shop’s all right easy money rolling in all day long but the track’s where you want to be.  Plenty of noise and people, and your tic-tac signaling when you’re packing too much in your book.  It’s exciting.  But I could have gone down as easily as I’ve come up. For getting to be a bookie is just as much a gamble as staying one.”