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A national lottery, under proper Government control and regulation, would not only strike a death blow to the crime syndicates by depriving them of one of their major sources of revenue but, would make the people's gambling dollars work for the public welfare.
I am not, for a moment, suggesting that we make gamblers out of the American people most of them already are by nature. I am saying that it would be in the public interest to control and regulate this human urge.
We made one serious mistake with prohibition ; let us not compound that error with still another mistake. Prohibition should have taught us the lesson that instinctive human urges cannot be legislated away. Any additional attempt to do so as regards gambling would merely drive gambling activities further underground.
The prohibition laws brought in their train the bootleg era which was the beginning of large-scale crime syndicates in the United States.
We all know that millions of dollars were spent to combat the bootleggers with little success. It was only repeal of the prohibition laws that brought to an end the gangsterism that flourished in the roaring twenties. I might add that repeal proved that with proper governmental control and regulation, we could not only put an end to an era of terrorism, but bring into the coffers of our treasuries billions—yes, billions of dollars in taxes upon alcoholic beverages.
The updating of our attitude toward the proper relationship of gambling and the Government would enable us to deal the same lethal blow to, organizell crime as did repeal, and the U.S. Treasury would profit immensely as well.
There is absolutely no question that a national lottery would divert funds from the pockets of the underworld into the coffers of our National Treasury. There should be no question that a national lottery would be able to competitively weaken crime while at the same time greatly benefit the Treasury.
I urge that your committee in its investigation attempt to establish the degree of criminal reliance upon gambling revenues for operating funds.
I feel certain that the revelation of the extent to which the crime empires are supported by gambling moneys would pose a major argument in favor of the immediate establishment of a national lottery.
In conclusion, let me assure this committee that there are a multitude of merits to a national lottery-it would be the soundest, most sensible and realistic approach to the problem of gambling and it would be a two-fisted weapon for social decency and fiscal solvency.
Again, my appreciation for allowing me to appear before this committee.
The CHAIRMAN. The Chair will announce that the hearings will recess over until 10 a.m. on Thursday, September 7. The committee stands in recess until that time, but the Chair will issue a summary statement and place it in the record.
(The statement referred to is as follows:) For 8 hearing days, this subcommittee has heard testimony that has demonstrated that:
(1) Crooked gambling equipment is being brazenly and openly sold and transported in interstate commerce in the United States; and
(2) A confederation of operators in the eastern portion of this country is supplying, in a telephonic network, fast results of horseraces, which are vital to the multibillion-dollar bookmaking racket.
Unfortunately, neither of these operations is barred by Federal law.
With respect to the fraudulent gaming equipment, it is estimated that about 20 companies are engaged in this flagrantly dishonest business. Millions of dollars are being stolen from participants in private gambling games—many of them servicemen—through the use of loaded dice, marked cards, and other crooked equipment sold by these firms. This may also hold true in professional or commercialized gambling.
We have testimony, for example, that 400,000 decks of marked cards are being used each year, and that at least 150,000 pairs of crooked dice have been manufactured and sold yearly.
Clearly, Congress should outlaw the manufacture and shipment of this equipment in interstate commerce. This subcommittee will likely make legislative recommendations along these lines.
The second phase of our hearings has concerned the operation of a wire service that sneaks fast results from racetracks and then disseminates this information to bookmakers in the eastern half of this country. This service provides the very lifeblood of an enterprise that subcommittee testimony shows collects tens of billions of dollars annually from bettors.
We have established that a network of telephonic wire services giving out horserace results links, among others, the following cities : Boston, Wilmington, Miami, New Orleans, Hot Springs, Ark., Cincinnati, Newport and Covington, Ky., Chicago, and St. Louis.
The wire services, besides making bookmaking a profitable racket, have been lucrative in their own right. Illinois Sports News of Chicago, for example, reports gross annual incomes in excess of $1 million in 1958, 1959, and 1960.
Unfortunately, most of the operators currently engaged in this business availed themselves of the fifth amendment. This was a strange procedure for businessmen who have always insisted their operations were perfectly legal.
In this connection, it should be noted that we have heard testimony of intimi. dation against two individuals because they were willing to tell this subcommittee about wire service operations.
Race information wire services, operated for the benefit of bookmakers, must be put out of business by Federal law. The subcommittee will recommend a law to bring this about soon.
Aside from testimony on fraudulent gambling equipment and wire service operations, the subcommittee also has heard convincing evidence that bookmakers have been defrauding this Government of billions of dollars annually in tax revenues. Their actual payments of excise taxes on gross betting revenue came to only about $7 million in 1 year.
In addition, the evidence shows that the bookmaking fraternity has financed the manufacture of—and has used-an electronic device that evades the payment of long-distance telephone calls. This practice defrauds both the telephone company and the Federal Government, which taxes long-distance toll calls. If the use of this device becomes widespread, millions of dollars in Federal tax revenue will be evaded.
These hearings have now been recessed until 10 a.m., Thursday, September 7. At that time we expect to hear testimony on the handicapping, for betting purposes, of such sports events as football, basketball, and baseball.
The CHAIRMAN. We will now be in recess.
(Whereupon, at 5:40 p.m., the subcommittee recessed, to reconvene on Thursday, September 7, 1961, at 10 a.m.)
(Members of the subcommittee present at time of recess: Senators McClellan, Muskie, and Mundt.)
LETTER OF EVERETT RUDLOFF
(See p. 358)
ASBURY PARK PRESS,
Asbury Park, N.J., September 14, 1961. Senator John L. MCCLELLAN, Chairman, Permanent Investigations Subcommittee, U.S. Senate, Senate Office Building, Washington, D.C.
DEAR SENATOR: The current hearings by your committee have generated testimony and subsequent public statements centering about the broadcast of news of racing by radio stations. In this connection radio station WJLK, of which Asbury Park Press, Inc., is the licensee, has been mentioned. Consequently, we feel it may be useful, at least for the record, to outline the extent of our identification with the subject.
We have operating here in Monmouth County a large racetrack, licensed by the State of New Jersey, which stages racing 50 days a year. During that time there is wide interest on the part of our listening public in the news from that track. For many years we have satisfied that interest with broadcast of the feature race, news of the entries, and with results of individual races as obtained from the wires of the Associated Press.
Within the past 2 years we were persuaded that our listeners were also interested in news of the two other New Jersey tracks, since many local horses participate in these meets. Thus we enlarged our coverage to include tracks at Camden and Atlantic City. Subsequently we found that the supposed listener interest had been somewhat exaggerated and we began restricting our coverage. For example, we covered the first 25 days of racing at Camden but decided not to go back for the second 25-day portion of Camden's season. Also, we dropped individual race coverage from the Atlantic City track but continued to broadcast the feature race as a news and entertainment feature.
May I point out that our coverage of racing has, in each case, been approved by the New Jersey State Racing Commission, usually after review by the attorney general's office, and that we follow any rules and restrictions laid down by State authorities. May I also point out that in ordering the racing wire from the Associated Press we were asked to file a letter in which we would agree to delay broadcast of results of individual races a minimum of 10 or 15 minutes. The letter was to be based on a letter originally filed with Associated Press by station WWDC in Washington, D.C., in which the Federal Communications Commission was quoted as having indicated that this was allowable and reasonable. Each year we have filed such a letter, as shown on the attached photocopy. We have adhered to this time delay in broadcasting individual races results.
During this past season we received an inquiry from the State racing commission about this time delay and we are subsequently informed by the commission that we could continue with the 10-minute delay.
We have never had any indication that broadcasts from our local track were in any way useful to "bookies” but we have had many indications that they were of great interest to our general listenership. In fact, we had considerable adverse comment when we restricted the coverage from Atlantic City. But we felt that the critics of our action were in the minority and that our decision to curtail the Atlantic City coverage had been sound from a programing point of view.
Racing news on station WJLK has been limited, has been judged in the context of its news value, and has been undertaken with the full advance sanction of all interested governmental agencies. It has generated no local criticism on grounds of being either against the public welfare or deleterious to public morals. The State of New Jersey licenses three flat tracks and permits mutuel betting at the tracks. Our news has concerned an activity that is legal and popular in the State of New Jersey,
We shall appreciate having this statement made part of the record of the Senate inquiry with which you are identified. Very truly yours,
MARCH 16, 1961. Mr. OLIVER GRAMLING, Assistant General Manager, The Associated Press, New York., N.Y.
DEAR MR. GRAMLING: In connection with this station's subscription to the race wire service of the Associated Press, it is understood and agreed that the broadcasting of horseracing information by us shall conform to the principles outlined as a reasonable test of propriety by the FCC January 30, 1948, in the case of Capital Broadcasting Co. (radio station WWDC), Washington, D.C.
It is agreed specifically that our use of race results will be within the area of latitude thus prescribed by the FCC in the case of WWDC as follows:
"It appears from the facts submitted that the WWDC program devoted to disseminating racing information in themselves present no substantial question. The information broadcast is obtained from regular new's services and the broadcasts do not deal exclusively with racing information. The information given is not presented with such urgency or in such detail as to suggest that it is primarily designed to be of assistance to those who may be engaged in betting or gambling on horseracing, which is illegal (District of Columbia Code, No. 22–1508). Only the results of the races and parimutuel prices are announced. There is a 10- to 15-minute interval between the running of the race and the announcement of the results over the air, and the sponsors of the program appear to be reputable merchandising and service enterprises in the community with no connection with betting or gambling." Sincerely yours,
(S) G. R., Radio station, WJLK.
LETTER AND AFFIDAVIT OF C. RAY EDMONDS
(See p. 504)
NEW ORLEANS, LA.,
September 1, 1961. Hon. JOHN MCCLELLAN, Senator, Senate Office Building, Washington, D.C.
MY DEAR SENATOR: When I returned to New Orleans, a Mr. Cecil Burglass, attorney at law from Jefferson Parish, visited with me and I deem it fair and necessary to correct any impression to the contrary that I should execute the enclosed affidavit to be filed with the records of the committee.
I do not feel that any testimony that I have given might have been misinterpreted. On the other hand, so that there may be no doubt as to the intent of my testimony, the enclosed affidavit is filed. Respectfully,
C. RAY EDMONDS.
Before me, the undersigned notary public, personally came and appeared C. Ray Edmonds, who, after having by me been first duly sworn, deposed and said: That certain newspaper accounts appearing in the New Orleans papers of his testimony before the committee prompted a visit by Mr. Cecil Burglass, an attorney from Jefferson Parish whose name had been mentioned by affiant in his testimony.
Edmonds declared that following a discussion with Mr. Burglass he deemed it only fair to Mr. Burglass to clarify his testimony because at no time did Edmonds mean to imply that Carlos Marcello was a client of Mr. Burglass or that Mr. Burglass was connected with him in any way other than at Edmonds' request to arrange a meeting between Marcello and Edmonds.
Edmonds further declared that he requested Mr. Burglass to arrange the meeting because of Mr. Burglass' representation of the track when the stock in Jefferson Downs, Inc., was owned by certain former stockholders and his familiarity generally with the affairs of Jefferson Downs, Inc.
With regard to the possible sale of the racetrack, Edmonds stated that that matter was an entirely separate transaction, and Marcello was at no time interested in purchasing the stock of Jefferson Downs Racetrack.
Edmonds further declared that while in Washington he had been advised by an investigator of the Senate subcommittee that the Senate's investigation did not reveal any evidence of the fact that Mr. Burglass was the attorney for Carlos Marcello, and Edmonds did not mean to imply otherwise.
C. RAY EDMONDS. Sworn to and subscribed before me, this 1st day of September 1961.
W. FORD REESE,
LETTER AND AFFIDAVIT OF C. RAY EDMONDS
(See p. 496)
NEW ORLEANS, LA.,
September 13, 1961. Hon. John L. MCCLELLAN, Senator, Senate Office Building, Washington, D.C.
DEAR SENATOR: There is enclosed an affidavit by me, which I would appreciate your having spread upon the minutes of the Senate Investigation Subcommittee hearings, at which I testified on Wednesday, August 30, 1961.
An investigation of Mr. Henry Raziano, whose name was mentioned because of misinformation given me, eveals that Mr. Raziano was not involved in any way. I am, therefore, taking the liberty of filing the enclosed affidavit in order to correct the record. Respectfully,
C. RAY EDMONDS.
Before me, the undersigned notary public, personally came and appeared C. Ray Edmonds, who declared :
At the Senate Investigation Subcommittee hearing held in Washington, D.C., I appeared on Wednesday, August 30, 1961, wherein I submitted certain data relative to gambling activities in and around New Orleans, La.
In my testimony I stated that several places of business were found to be accepting bets on Jefferson Downs racetrack. I further stated that one of these was being operated by Mr. Henry Raziano (old E. & G.) situated on the Airline Highway, Kenner, La.
Upon my return to the city of New Orleans, and after making a further investigation and inspection, I find that my statement concerning Mr. Henry Raziano was in error. I have now found that the place of business that I stated was owned and operated by Henry Raziano (old E. & G.), Airline Highway, Kenner, La., was actually sold in 1955 to Mr. Walter Brown, in full ownership, and that subsequently to this sale, Mr. Henry Raziano operated on a portion of this property à place of business known as Kenner Truck Stop, located at 1701 Airline Highway, Kenner, La., which Mr. Raziano likewise sold on April 9, 1959, to Mary S. Conforto.
It is requested that this letter be incorporated into the minutes of your Senate Investigation Committee hearing, in order that my testimony be corrected to reflect that Mr. Henry Raziano did not own or operate a business of accepting bets on Jefferson Downs racetrack located on the Airline Highway (old E. & G.), Kenner, La.
C. RAY EDMONDS. Sworn to and subscribed before me, this 13th day of September 1961.
W. FORD REESE, Notary Public.