The 1919 World Series was supposed to be a sure thing for the Chicago White Sox. They were the best team in baseball, the clear favorites. So when they started losing, people didn’t just notice—they smelled a rat. The man behind it all was Arnold Rothstein.
Rothstein wasn’t a gangster in the traditional sense. He was a gambler, a millionaire who had made his fortune by being smarter than everyone else in the room. He could have had a career on Wall Street, but finance wasn’t thrilling enough for him. He preferred the night life, the card games, the horse races, the rush of betting on anything and everything.
He never lost, not because he was lucky, but because he cheated. He only bet when he had fixed the game or had inside information. And he did it so well that by 1919, he was called “The Brain” all over New York City. The most impressive thing about Rothstein was that he had even beaten a charge of shooting two police officers.
The gambling house raid had gone wrong, and Rothstein lost his temper. He pulled a gun and shot the cops. It seemed like a guaranteed life sentence, but within hours, he walked free. His money and influence had reached into the police department and the courts.
He could buy his way out of anything. So when he heard that the White Sox players were furious with their owner, Charles Comiskey, he saw an opportunity. Comiskey was a cheapkate, and his players were making peanuts. They were short on cash and angry at their boss.
Rothstein knew they were ripe for corrupting. He bribed eight of them to throw the games. He didn’t just want to win. He wanted to win big.
Because the White Sox were the clear favorites, the odds on their rivals were high. So he bet every dime he had on the Cincinnati Reds, spreading his bets across the country so no one would catch on. The plan worked at first. The White Sox lost the early games, giving the Reds a series lead.
But by game five, the players got angry. Rothstein had promised them cash on delivery, and he wasn’t paying. His money was all tied up in his own bets. He was running a Ponzi scheme, always making money, but always spending it faster than it came in.
The players felt cheated. They decided to double-cross the double-crosser and play to win. The starting pitcher for game eight was a man named Claude “Lefty” Williams. He was determined to win.
If Rothstein wouldn’t pay him to lose, he would play for the prize money instead. A White Sox victory would have ruined Rothstein. He couldn’t allow that. The night before the game, Lefty Williams and his wife went for a stroll to relax.
They were approached by a man on the street. “If you know what’s good for yourself and what’s good for Mrs. Williams,” the man said, “you will lose that game, and you will lose it very, very early. ”
The threat worked.
Lefty and his teammates handed the Reds an easy victory. The White Sox lost the series, and Rothstein made millions. It was the biggest sporting fix in American history. And it smelled so bad that the government started investigating.
People began talking, confessing to district attorneys, and pointing fingers at Rothstein. But Rothstein was always one step ahead. He voluntarily went to Chicago and presented himself to a grand jury as an innocent victim. He fixed the grand jury the same way he fixed the World Series—with money and influence.
The case against him collapsed. His reputation with the general public was ruined, but he didn’t care about that. What mattered was that he had gained the respect of New York’s underworld. The street gangs saw what he had done, and they realized his power was equal to that of the government.
And that was the turning point for Rothstein. He was no longer just a gambler. He was starting to become a gangster. In 1920, Prohibition was imposed across America, but the nation was still thirsty for alcohol.
The street gangs were selling diluted booze to the poor, but The Brain thought big. He organized a bootlegging operation on a national scale, importing expensive Scottish whiskey for the rich. He wouldn’t sell cheap hooch on street corners. He had class.
He made contact with distillers in Scotland, paid off officials to get the booze into the country, and then handpicked the cream of the underworld to distribute it. He took the smartest young heavies and taught them that crime had to run like a business. He mentored Lucky Luciano, who would go on to lead the Five Families. He mentored Meyer Lansky, the future mob accountant.
He even took a gamble on a violent young thug named Dutch Schultz. He let all these little mice run where they wanted to run, do his bidding, and that’s where they got their start. Rothstein laid out the cash and never got his hands dirty. He was soon worth an estimated $125 million in today’s money.
He was the richest crook in the country, the only hood who could pass for a gentleman. He wore expensive suits, spoke like a businessman, and only had one weakness: he loved milk and cake. He also gave his protégés lessons in style and reputation. He taught Luciano how to use cutlery, how to dress, how to behave like a gentleman.
A cheap Lower East Side hoodlum was transformed into a gangland fashion plate. When Luciano was caught in a police sting selling drugs and made a deal to save his own skin, he ratted out his associates. His reputation was destroyed. He was a snitch, and his clients didn’t want anything to do with him.
In his hour of need, he turned to Rothstein. “Arnold, how can I get back in good graces? ” he asked. Rothstein told him to buy 200 of the best ringside tickets to the Jack Dempsey versus Luis Firpo fight and give them all away to the most influential people in America—rich businessmen, important congressmen, and gangsters like Al Capone.
Luciano did it, appearing at the match dressed to the nines. His reputation was restored. Everyone wanted to know him. Rothstein also acted like an illegal bank, offering crooks credit to start their own illicit businesses.
That earned him another nickname: The Big Bankroll. His loans came with strict conditions. The gangsters had to take out life insurance policies naming Rothstein as the beneficiary. If they died and couldn’t pay their debt, he collected on the insurance.
And he charged a 20% interest rate. If they couldn’t pay him back, he felt he owned them. They could do him favors, the dirty work he didn’t want to do himself. But all this bankrolling put a dent in his finances, so he moved into labor racketeering.
He connected with a vicious gangster named Louis Lepke, a total animal, a thug of thugs. Rothstein taught him his signature move: don’t just work for management. Work both sides. Under Rothstein’s wing, Lepke took control of an entire union and turned it into a protection racket.
Not all of Rothstein’s protégés stayed loyal. Dutch Schultz had gotten his start as Rothstein’s bootlegging driver, but he wanted a bigger piece of the empire. He started hijacking Rothstein’s booze deliveries. Rothstein dismissed the rebellion, partly because he could see that Prohibition was coming to an end.
He needed a new market, and his former drug pusher, Lucky Luciano, told him about the unprecedented demand on the streets. Rothstein had no qualms about drugs. If it lined his pockets, he was interested. He turned his booze network into a drug network, supplying cities across the country.
He kept his hands clean by arranging for others to do the distribution. There was a layer between him and the drugs, a wall that made it very hard for the authorities to penetrate. He is accurately called the father of the modern American drug trade. But it wasn’t enough.
Rothstein wanted to go global. For that, he needed a backer even richer than himself. In 1928, he met with Captain Alfred Loewenstein, the third richest man in the world. Together they planned an international drug ring, with Loewenstein providing the European connections and Rothstein providing the American ones.
The flow of illegal drugs was about to increase tenfold. Then, on July 4th, Loewenstein mysteriously disappeared from his private plane. He got up to go to the bathroom, and when the plane landed, he was gone. No one ever knew how.
The dream of the international drug empire turned to dust. And that was just the start of Rothstein’s bad luck. His investments started to fall through. The mobsters he had schooled were out of control.
Luciano was drawn into a murderous feud between two Italian crime families, and Dutch Schultz was now the most feared man in New York. Rothstein operated like a lone wolf, a portfolio manager bringing in different deals from different people at different times. Without the protection of a gang, he grew paranoid. He started losing money at the track.
He started losing money in poker games. The Big Bankroll had big problems. One night, in a seventh-floor Manhattan apartment, there was a high-stakes card game. It was a chance to win half a million dollars.
Rothstein had hands good enough to win, but he never quite won. He just missed enough to keep him in the game. The other guys wanted to walk away because they were ahead, but he said, “No, no, let’s keep playing. ”
He played for 36 hours straight and lost over $4 million in today’s money.
Unable to give up, he bet a final $320,000 on a single cut of the deck. His entire reputation and criminal empire were riding on one card. It was a deuce. He couldn’t conceive that he had lost that much money.
He believed the game was fixed because he was so used to winning. “That game has to be fixed,” he insisted. “There’s no way that me, Arnold Rothstein, could lose that kind of money. ”
In the gangster world, calling a man a cheat is a big deal.
Rothstein had crossed a line. He treated George McManus, a well-known and well-connected gambler, like nothing, and he refused to pay up. It was his most dangerous gamble of all. Two months later, in the Park Central Hotel, Rothstein was shot.
The next day, after massive internal bleeding, he died. The police asked him who did it as he lay on his deathbed. He looked at them and said, “You mugs. You know.
” He wouldn’t identify the shooter, sticking to the code of the mob. He never revealed who killed him. The list of suspects was long. George McManus, the man he owed thousands of dollars, was arrested but acquitted.
Lucky Luciano stood to inherit the entire drug business. Dutch Schultz had long been chasing Rothstein’s bootlegging empire. And Louis Lepke was a violent labor racketeer who had plenty of reasons of his own. No one was ever convicted for the crime.
Just months after Rothstein’s death, all the suspects met at a fancy hotel in Atlantic City. It was the biggest mob meeting in American history. Everyone Rothstein had hired was there. They wanted to know what happened next.
The king was dead. Who was going to replace him? They divided up the rackets he had built. Luciano and Lepke continued to expand the drug business across America.
The men Rothstein schooled in organized crime seized his empire and ran it like a business, following the model he had created. Arnold Rothstein died like a gangster, keeping his secrets to the grave. He went down in history as the founding father of the American mafia, the man who turned thugs into businessmen and transformed crime into an enterprise.
