Tottenham Report: From bubbles to gambling hells By Andrew Tottenham, Managing Director, Tottenham & Co January 25, 2022 at 10:00 pm The 17th and 18th centuries were times of great social upheaval. In England, a fight between the supremacy of Parliament and the monarchy led to the rise of Oliver Cromwell and the beheading of Charles I (1649). In America, the War of Independence (1775–1783) freed the colonies from the tyranny of the English Crown and in France, the populace revolted (1789–1799), beheading many of the aristocracy in the process. During this period, gambling was going through a boom, mainly because it was allowed, but hardly regulated. The line between investment, speculation, and gambling is extremely thin today, but in those days it was non-existent. In 1637, speculation on the price of tulip bulbs led to “Tulip Fever”; the price of tulip bulbs exploded. At this time, tulips were relatively rare in Western Europe and considered exotic. The bulbs were mainly available from traders in Amsterdam. The flower became much in demand and the price of bulbs started to rise. The general public began “investing” in tulip bulbs, hoping the price would continue to go up, so they could sell at a profit. So high was the demand that at its peak, the price of a single bulb cost more than a middle-class house. Inevitably, the bubble burst and fortunes were lost. Another example of a speculative bubble occurred 87 years later, when a government-sponsored joint stock company collapsed, ruining many British investors and nearly taking the British economy with it. Even Sir Isaac Newton was said to have lost the equivalent of over £20 million in today’s money. The government of England and subsequently the United Kingdom (England and Scotland) sponsored lotteries as a means of raising revenue. These proved quite successful; generally, they were public-private partnerships, but the private organiser of the lotteries usually did much better than the state. Gambling was not illegal, but was tolerated. There was much concern about the amount of money that the poor were gambling, though lotteries were seen to be more acceptable, because nobody complained when they lost. The rich who gambled away their fortunes would complain loudly. The expansion of the British Empire and foreign trade brought with it exotic goods. In the mid-17th century, cocoa was a phenomenon in England, becoming so popular that Chocolate Houses, where people could go to drink cups of hot chocolate, started opening everywhere. Wherever people congregate, gambling is sure to follow. Sure enough, it was in these Chocolate Houses that betting on card and dice games ensued. Another phenomenon of the mid-17th century was raffling shops. People went there to buy tickets to win prizes, such as items of food or the like. When enough tickets were sold, a drawing was held and the winning ticket announced. Rich and poor alike met in the Chocolate Houses and spent their time drinking hot chocolate and gambling. Inevitably, these houses also attracted cheats, thieves, and money lenders. The rich did not like mixing with the unwashed masses, nor did they enjoy being fleeced by cheats or having their pockets picked. Thus, their gambling moved to private houses. King Charles II (1660-1685) was an avid gambler and amongst his retinue was the Groom Porter. This was an appointed position that came with an annual salary of some £600 per year. The duties of the Groom Porter were to ensure the King’s lodgings were adequately furnished and to provide cards and dice. Further, the Groom Porter was responsible for adjudicating the disputes on the card tables and bowling green. During Charles II’s reign, the Groom Porter was Thomas Neale, an enthusiastic gambler, who had his finger in many pies. He was authorised by the King to license and control gambling and to prosecute unlicenced “rafflings”. Despite being a favourite of the King and organising both public and private lotteries, developing large property schemes (Neal Street and Neal’s Yard in London’s Covent Garden are named after him), and having the monopoly for the mail in the American colonies, he died a pauper. In Queen Anne’s time (1702-1707), the position of the Groom Porter was still very much alive. The London Gazette in 1705 published the following official notice: “Whereas Her Majesty, by her Letters Patent to Thomas Archer, Esqre., constituting him Her Groom Porter, hath given full power to him and such Deputies as he shall appoint to supervise, regulate, and authorize all manner of Gaming within this Kingdom.” A one-man Gambling Commission. Gambling was at its peak during the Georgian period. Gambling amongst the aristocracy was immensely popular, especially now that it was organised in private houses. There were always games being offered and fortunes were won and lost. There are reports of people losing over £100,000 in one sitting—with a “sitting” extending over several nights. In 1750, £100,000 were worth the equivalent of about £10 million today. The houses that held the games were often unauthorised and raided by the local constabulary. Many times, the owner of the house and the organiser of the games got off scot-free, either having bribed the magistrate or not having anyone prepared to be a court witness to the gambling. Some of the most famous organisers of gambling were the “Faro Ladies”, four women of society who banked games of faro in their houses. Not that everyone was safe in these houses. The Times, in 1793, reported that one such lady in St. James Square was about to commence a prosecution, because it was said that there was “much filching at her Faro table”. The article went on: “If justice is to be hoodwinked, and gambling and sharking permitted, why not make it an article of revenue, as in foreign countries, and lay a heavy tax on it?” I believe this is the first mention of using high taxes to control the supply of gambling. Pressure from the judiciary forced gambling organisers to ensure that anyone who came to gamble was known or had been vouched for. This was to ensure that they were not unwittingly allowing constables into the gaming rooms. In order to enter a gaming hall, a gambler, having been identified, had to pass through three of four very heavily locked doors. These doors were intended to stop the local constabulary from accessing the gaming room, before the organiser had time to hide all the money and gambling equipment. The gambling club, or gambling “hell” as it was then known, was born. London’s West End was full of hells, but perhaps the most famous of these was Crockfords, opened by William “Crocky” Crockford in 1823. Crockford was the son of a fishmonger who started his working life in his father’s business. Even though poorly educated, he soon discovered that he was proficient with numbers. In the early 19th century, betting had become a national pastime. Young Crocky started betting at tracks and ringside at fights. He also visited “silver hells”, where the not so wealthy could bet a shilling (a silver coin) on the outcome of a race or fight. Mostly by playing cribbage, a card game where a skilful player has an advantage, Crockford parlayed a very small bankroll into enough to open one of the most sumptuous gambling clubs in all of London, Crockford knew that certain games could be designed with a house advantage, so it wasn’t necessary to cheat gamblers out of their money for the house to make money. He decided his gambling club would only offer games with a house advantage. The early part of 19th century saw many young aristocrats return from the Napoleonic wars with nothing to do with their days other than bet, play cards or dice. Crockford attracted these bored young aristocrats to come and gamble at his club. At the height of his wealth, he was possibly one of the richest men in England, worth some £160 million in today’s money, most if not all sourced from Britain’s aristocratic families.