Covington Gambling Lid Gives Newport a Boom

A Gambler's Paradise is Newport, Ky., Campbell County's largest city, located on the Ohio River across from Cincinnati and adjoining Covington.

 Covington, which is in Kenton County, is without gambling, at least openly, but gaming rooms formerly were operated there on as extensive a scale as they are now run in Newport.

 The situation at a glance is just this:

 Gambling spots in Covington have been closed since April 5, when the “Blue Ribbon grand jury” impaneled by Circuit Judge Johnst Northcutt, returned 196 indictments, forty-two against James Brink, proprietor of the Lookout House.  Nearly all the indictments were for gambling.

 Prospects are that gambling spots in the county will remain closed for at least four more weeks, pending outcome of the August 5 Democratic primary in which Judge Northcutt is seeking re-election

 In adjoining Newport, nearly every café and restaurant has slot machines and handbooks are scattered throughout the city.  The operate openly.

 The Beverly Hills Country Club, the State's and probably one of the nation's finest gambling houses, is located there.

 In one brief day, we were able to find two other gambling houses, operated on an extensive and lavish basis, either one of  which is comparable to our neighboring Club Greyhound [an illegal casino in Jeffersonville, Indiana, across the Ohio River from Louisville].

 Judge is Responsible

 And while gaming spots in Covington are closed, the “joints” in Newport are operating with increased business and being patronized by larger crowds.

 The man responsible for the whole affair is Judge Northcutt, who, since 1934, has waged a one-man battle against gambling in Kenton County, which ironically, has been a boon to the business in adjoining Campbell County.

 The Lookout House which was built years ago and was a roadhouse, began prospering as a night club and gaming sport in 1934.  It was then that Judge Northcutt first began hearing rumors about gambling in the club.

 Immediately Judge Northcutt made an appeal to the local police officials, but was unable to get the proper results.  In all, twelve raids were made but no arrests resulted.  On one occasion, State Police raided the Lookout House and confiscated a “hazard table and a bushel basket of chips.”

 “Once I even sought the assistance of some private detectives in Cincinnati,” he said.  “They agreed to help, but the next day they notified me that they would be unable to give me any cooperation.”

 Knowing the Lookout House was running a gambling room open to the public and advised of the presence of slot machines and hand books in the city's cafes, Judge Northcutt selected the first grand jury to investigate the matter.  This report was made June 13, 1936, and the body returned thirty-eight indictments.

 The report states the grand jury heard “overwhelming evidence that large sums of money have been collected by gamblers in Covington, Ludlow and Kenton County outside of the cities, especially at the Lookout House and its adjunct known as the Schlosser Place.  The jury believes it reasonable to estimate that a thousand dollars a day is available for the purchase of immunity for gamblers in Kenton County.”

 Continuing, the jurors compared the county's gambling spots to a “prosperous Monte Carlo” and stated that “perjury alone has prevented us from obtaining enough evidence to indict a number of these [law enforcement officials] for flagrant if not criminal neglect of their duty.”

No Results

 Meanwhile, while the grand jury was sitting, court proceedings were brought to enjoin gambling at the Kentucky Grill.  They were followed by twenty citizens, who testified that there was gambling and that it was common knowledge.  The injunction was granted, never appealed, but the place continued to operate.

 The injunction handed down, the court tried the thirty-eight defendants in which indictments were handed down but a hung jury resulted and the State never requested the cases reset for trial, according to Judge Northcutt.

 About this time an injunction suit was brought against the Lookout House and, as in the case against the Kentucky Grill, gambling was enjoined but the place continued to operate.

 Judge Northcutt said numerous gambling instructions to subsequent grand juries brought no results until the “Blue Ribbon grand jury” reported April 5, 1939, with 196 indictments.  Their report resulted in closing of Kenton County's gaming spots.

 The report recommended that the next grand jury investigate the county's law enforcement officials.

 Immediately, Judge Northcutt began to make preparations for calling of a special grand jury to investigate the officials, but he was interrupted when, on the day or the arraignment of the prisoners on the 196 indictments, attorneys made a motion to quash because of irregularities in the action of the grand jury.

 This motion is still pending.

 Judge Northcut said on three or four occasions he has received threatening letters and twice word has reached him that it would be worth his while to ignore gambling in the county.  Once he heard it would be worth $250 a week to him if he would let up.

 One of the threatening notes was postmarked March 11, 1939, in Louisville.  Written with a typewriter on a penny postcard, it read:

 “Well, John, you show still further that you are not fit to be a Judge of any kind.  All the cheap publicity that you ben asking for it show that you are a cheap WARD HEALER.  Now Ward Healer John the Folks at the district will give you what is reely coming to you when the proper time come, however you may not finish the present term. Who Know?????”

 “Kind regards to the rest of the cheap Ward Heeler, and be careful, Judge.”

 “So strong is the gambling element,” Judge Northcutt said, “that a youth who testified before the grand jury was beaten and nearly blinded when Gangsters threw ammonia into his eyes.”

 Meanwhile, Judge Northcutt regrets that his drive to destroy gambling in the country has resulted in increased business in the neighboring city.

 “Why,” he says, so jealous are the Covington gamblers that it is rumored the Beverly Hills recent robbery was a reprisal from one of our local gambling groups.

 The judge told us the gambling element, which came to Kentucky from Detroit and Chicago, brought with it a group of mobsters and gangsters which overran the city.

 “One group had a Louisville businessman desperate with threats as they attempted to work the badger game on him,” the Judge said. [A badger game involves luring a mark into a situation that can subsequently be used for blackmail.]

 The judge said that a State officer in his report of the gambling situation asked the report to be kept confidential because “I don't want to wake up some morning with a belly full of lead because lead is so hard to digest.”

 Amazed by this tale of gambling and corruption, we thanked the judge and departed for Newport to see for ourselves.

 Being hungry, we decided to pick out a nice looking grill where we could get lunch.  We found an attractive restaurant.

 After seating ourselves in the grill room, we ordered lunch and proceeded to listen to the a radio over which a play-by-play description of the Cincinnati-Pittsburgh ball game was being called.

 Off at Latonia

 Suddenly we heard: “They're off at Latonia.”

 We left out chairs and walked over into the adjoining barroom. There, seated at a table adjacent to the street door, we saw a red-faced robust man, racetrack rundown sheets and racing forms before him and a radio nearby.  It was over his radio that the call had come.

 Even though we had been warned that we would find things in just such a condition, we failed to hide the surprise we felt.  The operator asked what was the matter and we informed him that we were from Louisville, where even the rear room handbooks were destroyed by police.  He laughed.

 “Here,” he said, “You will find that most of the small restaurants and cafeterias have handbooks.  You may eat your meals and either listen to the ball game or bet on race horses.”

 After listening to the running of several races - a pleasure which had been denied to us in Louisville for several months - we walked over to the corner and began playing a slot machine, for the place had several machines lining the wall.  (We recently authored an article in which it was asserted that persons playing slot machines had little or no chance to win.)

The Yorkshire Grill

 After eating our meal - we found it rather hard with the constant blaring of “they're off at Arlington” or “Mcormick hit a double scoring a run” - we decided to ride out to the Yorkshire Grill, 518 York.

 Entering the grill, we bought a drink and played a few moments at a group of slot machines which were lined up, back to back, in the middle of the room.

 Noticing a couple of swinging doors in the rear, we took a chance and walked through them.  A small man, with a mousy appearance, apparently noticed that we were looking around rather closely and asked us if we were looking for the men's room.  We said we were, and left.

 Returning to the gaming room, we discovered that it was furnished with modernistic leather chairs, contained two large dice tables along the left wall, a black jack table near the door as you enter the room, and a chuck-a-luck table adjoining the card game. [Chuck-a-luck uses a simple cage containing three dice. Players have the option of betting on the numbers (1-6). If one of the numbers you bet on come up once, you get paid even money. If one of your numbers come up twice you get paid 2-1. Should your number come up three times, you get paid 3-1. The house odds are so good that virtually no current gaming authority will allow it.]

 But No Music

 Along the rear wall were a number of racetrack boards.  Persons were lined up before the boards listening to the calling of the last race at Latonia.

 Having the plant well in mind, we left the room and walked several blocks to the famous Glenn Hotel, 928 Monmouth.  The outside of the hotel is very plain and shows the age of the building, which is almost a landmark in town.

 Entering, we found ourselves in a rather dark and cramped lobby.  Walking several feet, we were in the grill.  Looking around, we were accosted by a shirt-sleeved man, apparently the manager, who asked us what we wanted.

 “Have you any evening entertainment?” we asked

 “We used to have music but we done away with it,” he replied.

 Still looking around, we said: “We're from Louisville and were told we might have a good evening's entertainment.”  By now our eyes had lighted on a couple of swinging doors leading from the right of the room.

 “Maybe you would like to see our club room,” he asked.  We assented and passed through the doors.

 We found we had walked into the most pretentious gambling rooms of our experience, and that takes in Indiana's Browns, Gorge, Club Greyhound, and several places in New Orleans.

 To the left of the room, placed on a large balcony, were a blackjack game and a dice table.  Very few persons stood around the card table, but the crowd stood two-deep at the dice table.

 On the main floor was a dice table, blackjack and chuck-a-luck tables.  This wall, as in the Yorkshire, was lined with racetrack boards.  However, by now the crowds had departed and only the trash on the floor was left to tell of the crowd that had stood eagerly awaiting the results of the holiday cards.

 “The room isn't too big, but it is nice if you like to gamble,” the man stated.  “We keep it air-cooled and will show you a good time.”

Robbed Twice

 Promising to return, we departed and started for the Beverly Hills Country Club, which is located on the outskirts of Newport.

 Approaching our destination, we saw huge neon signs telling us of the fine, expensive floor located within.  Driving up a long roadway, bordered by electric lamps and a huge chain - the club is situated at the top of a large hill - we drove up to the doorway, turned our car over to the doorman, received a check, and entered.

 Walking to the rest room, we struck up a conversation with the Negro boy.  He told us the Club was three and a half years old and said the large, rambling brick home, adjacent to the club, belongs to the club's proprietor, Glen Schmidt, who, he said, personally buys all the food for the kitchen at the club.

 Jumping from one topic to another, we were informed that the club had been robbed twice, never raided, and shut down during seasonal intervals when business was bad.

 The first robbery occurred a year ago and netted $9,000,a nd the most recent several weeks ago.  It netted about $11,000 we were told.

“Mr. Schmidt had gone to the market and the club was deserted when the armed robbers took the place,” the Negro said.  “The bookkeeper had just opened the safe and was preparing to take the money to the bank when the men entered.  If they had come at night, you can bet they wouldn't have gotten any money,” he stated.

 Leaving the washroom, we entered the outer lobby, which embraces a luxurious bar.  It was packed with perspiring and well-dressed persons, seeking to curry favor with Lady Luck.  The walls of the room were lined with slot machines - twenty-nine in all - including nickel, quarter, half-dollar and dollar devices.

 Players stood before each machine and the air was filled with the din caused by the clang of the device being set in motion.  Seldom was the clatter interrupted by the jingling of returning coins to victorious players.

 However, we noticed one woman hit three oranges and received ten silver dollars on the dollar machine.  It surprised us at that.  We didn't know there were enough silver dollars in existence to operate two one-collar machines.

Crowd Surrounds Tables

 Walking from the dining room through a door over which a neon sign reading “Club Room” glittered, we climbed a stairway and walked into the gaming rooms.

 The gambling room was crowded, and at first glance, it was hard to tell just what was going on in the room, it was in such a state of confusion.

 An investigation disclosed the four dice tables, four roulette wheels, a money wheel, chuck-a-luck and black jack tables were in operation and all were surrounded by a crowd.

 And in the crowd we discovered a host of Louisville and Jefferson County acquaintances, persons holding private and official positions.  Among them we discovered city officials, local detectives, and a prosecutor, all trying their luck.

 The money wheel being nearest to the door, we stopped and found the game, in which bets from a quarter up may be made on different numbers which pay odds in proportion to the frequency with which they appear on the wheel, being played chiefly by women.

 We noticed a flashily dressed, redheaded woman, formerly employed at the Club Greyhound as a shill, seated at the end of the table.  She won and lost her bets with little apparent concern as her eyes wandered round the room.

$5 Minimum

 Two other women, their faces showing concern as they were greeted with success amd more frequent failure, sat at the end of the table and pooled their money.  One of them was heard to remark, “If we lose much more we will have to hitch-hike home.”

 Moving to the next table, we found the black jack dealer turning all of the players' cards face up and one of his face down.  Surprised, we turned to a well dressed woman standing alongside and remarked that where we came from, the Greyhound, they didn't play that way.

 “Oh, you must be mistaken, that is where we used to do our gambling and they sometimes played the game that way there.  You see, the player knows whether the majority of cards out are low of high,” she advised us.

 Thanking her, we moved on to the chuck-a-luck table where, just as at the dice and black jack table, the smallest bet was a dollar and not less than $5 worth of chips could be purchased.

 We noticed a nice looking white haired woman, who would have looked more at home at a church social, playing chuck-a-luck.  As she cashed in her chips - $40 worth - she had to call the cashier's attention to the fact that he only gave her $35.  Such occurrences were frequent.

 From there we went to the roulette wheels, all closely aligned.  At each table, groups of women sat in serious and studious attention.  The women - nary a man was playing at either of the four tables - were having average luck.

 Instead of betting the numbers, the players were playing odd and even, and red and black, but even then, 0 and 00 came up on the wheels at frequent intervals and the house took all the bets.

 No dimes

 Like all of the other tables, the minimum amount of chips one could purchase was $5, even though the chips were only 10 cents each.  One woman leaned over the table and put a dime on a number only to have it picked up and returned to her by the gamekeeper.  Our attempt to buy $1 worth of chips also failed.

 Walking to the dice tables, where the players, predominantly men, were standing two and three deep, we met a Louisville friend who warned us that “I am told that if you just win a little up here and leave the table it is all right, but if you try to win a lot they will throw in bad dice on you.”

 Thanking him, we started watching.  We noticed players frequently threw $20 and $50 bills on the tables and asked for chips.  One Louisville player approached us and said that he had been cheated of $4.

 “I was betting on a nine, the man made nine, and they refused to pay off.  They said I was betting on a five.” He asserted.

 About this time, the photographer complained the room was full of guards who mingled in the crowd and appeared to be watching him, although his small camera was hidden under his coat.  We advised him we couldn’t help that and went back to work.

 The croupiers' shouts of “they're coming out, all bets down,” caught out attention.

 “Four is the point.  Get your bets down,” he said.

 Throughout all this, the croupiers' assistants at each of the tables were kept busy removing bets and paying off with each roll of the dice.

 We were enjoying this when we received a tap on the back from a young man, not more than 18, who asked if we were playing.

 Being only kibitzers, we relinquished out place to the youth, who threw a $20 bill on the table and asked for $5 in chips.

 Returning to the money wheel, we were met by a Louisville detective who truck up a conversation.  He told us of the attempt of two Louisville men to take advantage of the ease and success with which gambling resorts operated in Newport

Dropped $7,500

 According to the other officer, two Louisvillians opened a gaming spot in Newport.  The gaming proprietors, who work together, apparently resented the intrusion.

 Obtaining the cooperation of the outfit supplying race results, the Newport men arranged to have the results withheld for several minutes from the new gaming house.  Other persons were given the results so that they might make bets at the new spot.

 At the end of a few weeks, the Louisvillians were sadder but wiser.  They returned to Louisville minus $7500, and with their only remaining piece of equipment, a dice table, on the back end of a truck.

 We left, danced a few steps in the dining room, paid our bill, and departed, after first producing the car stub and a receipt showing we paid our check.

 Driving on through Newport to Covington, we entered a number of small restaurants but were unable to find a slot machine in operation.  Entering the Lookout House, we were informed that the gambling rooms were closed tight and had been for some time.  The club was being operated at a 60 per cent loss in the hope that it might weather bad times for four or five more weeks until the primary is held, a musician said.

 It was explained it was hoped that Judge Northcutt might be defeated and the gambling permitted again. 

“Why,” we were told, “since our gambling has been stopped we haven't been able to draw any business.  It is all going to the Newport joints.”

 Leaving, we entered our car and departed.


From Louisville Courier Journal, July 16, 1939 “by three Investigators”