By The Other Guy | August 2, 2020
One of the easiest and most profitable “semi-legitimate” businesses the mob ever developed was the coin-machine industry.
Starting right after the repeal of the alcohol Prohibition in 1931, racketeers of all stripes started looking for other revenue streams now that bootlegging liquor was a thing of the past.
Many turned to gambling which had always been around but had never been a developed to its full potential as a premier racket. Bookmaking on horses, baseball, basketball, and other sports soon became the “go to” racket operation many engaged in.
Bookmaking became a popular vocation, as bookies accepted bets on nearly everything that moved.
Alongside that was the policy racket or numbers lottery, a hugely popular game of chance mostly played in the poorer sections of the city. The Italians had always run their own lottery with the winning number being drawn weekly from Italy and telexed to the states.
There were also punchboards, high-stakes card and dice games, and many other casino-type games.
But of all these variations on gambling probably the simplest gambling racket of all became slot machines, or “one-armed bandits” as they were commonly referred to.
New York City became ground zero for the slot machine racket in America, and although many racketeers of all ethnicities and Italian mafiosi alike would profit from slot machines, the biggest and most important mafioso of all had to be Francesco (Frank Costello) Castiglia, the longtime “consigliere” and later “acting boss” of the most important Mafia Family in the nation, the Luciano Family.
The iconic Costello was a racketeer businessman of epic proportions who was a visionary in several racket fields, not the least of which was the coin-machine racket, and most specifically slot machines.
By the mid to late 1930s, Costello unquestionably became the kingpin of the slot machine rackets in New York City. He literally had thousands of these “one-armed bandits” operating throughout the five boroughs. In years to come, he expanded across the country and was partnered with many varied racketeers in states as far away as California in slot operations.
Candy stores, coffee shops, diners, bars, restaurants, pizzerias, dry cleaners, factories, and many other retail locations too numerous to name, not to mention illegal speakeasies and after-hours clubs, and underground slot machine dens.
The incentive for the shop keeper was most often a 50/50 split of the gross revenue the machine brought in weekly. This could amount to a huge payday depending upon the location in question. Some locales were popular enough to support several machines.
In other situations, shop keepers were sometimes “convinced” to install the machines and received no percentage of its revenue. The business owners were happy to comply so as not to incur a hoodlum’s rathe. To keep on their good side so to speak.
In time the fledgling coin-machine industry would grow to tremendous proportions nationwide, through no small measure of the underworld.
It would expand into the newly designed “music box” business. Jukeboxes as they became known held all the popular music of the day.
The small records the machines held were accessible for a nickle or a dime for several songs worth. By the 1950s a quarter typically bought you three songs that would drop down and play one after the other in succession.
Jukeboxes became all the rage of the era. Suddenly any little neighborhood tavern or corner pub could instantly be turned into a dance haven and entertainment Mecca. With one simple silver quarter dropped into the slot, an otherwise quiet, nondescript watering hole became the next best thing to live entertainment…it was a great thing. And the mob had made it happen!
Along with music, the “pinball” game machine also became a very popular pastime. Machine manufacturers soon designed many different types of pinball games to entice patrons to keep on dropping those quarters into the slot. Players tried to accumulate “points” on the machine which could be converted into more free games, or redeemed for money, drinks or a small prize from the saloon or shop keeper.
Enter the automatic cigarette machine, and pretty much any given location could be turned into a one-stop entertainment emporium.
Let’s take a typical neighborhood bar for instance. Between the music, games, cigarettes and liquor, what more did you need? And your local mob-connected vending machine distributor supplied it all…”one-stop Mafia shopping” as it were.
From the Family bosses and hierarchies right on down to capos, soldiers and associates, literally hundreds of New York’s mob guys went into the vending machine field.
This was mirrored in borgatas across the country. Nearly all 26 officially recognized Cosa Nostra Families operating in the United States in that era ran jukebox and vending machine companies of varying size and dominance.
These companies were usually owned or controlled by the top hierarchy figures of each Family.
In truth, years earlier several Commission meetings had been convened for this very reason, in order to discuss a Cosa Nostra wide directive from the Commission bosses to the “Representante” of each borgata so his Family would now close ranks and join a concerted effort for nationwide Mafia domination of this industry…within several years time the industry was knuckled under the heavy hand of America’s mafiosi….It was an auspicious accomplishment, to say the least.
Side Note: Top mafia leaders often officially owned and operated vending companies. Some good examples of this was New England boss Raymond Patriarca who owned Coin-O-Matic Distributors in Providence, Rhode Island;
Pittsburgh, Pennsylvania boss Sebastiano John La Rocca owned Keystone Sales Co., and the Keystone Cigarette Vending Company in Johnstown. La Rocca and underboss Mike Genovese also owned Coin-Machine Distributors, and L. & G. Amusement Co., both of Pittsburgh.
These were but a few of many similar jukebox-vending firms the Pittsburgh mob held interests in. They had a virtual lock on that city’s vending industry;
As the recognized capos and longtime bosses of Utica, New York, the Falcone brothers (Joe and Sal) controlled jukeboxes and slots in that Upstate region for many years;
New Orleans, Louisiana boss Carlos Marcello owned the Pelican Vending Co., a massive slot machine and vending company that oversaw thousands of coin-operated devices throughout the state and adjoining territories. He partnered with New York boss Frank Costello in these operations;
Baltimore, Maryland’s resident capo Luigi Morici and his successor Frank Corbi operated a jukebox-Vending firm for decades;
The Chicago Family underboss Anthony (Joe Batters) Accardo held near iron-clad control over the jukebox and vending machine field through his capo di decina Guiseppe (Joey Glimco) Glielmi who was their resident labor-union specialist and top industrial racketeer.
Glimco held sway over many Teamster Union locals in various industries including Jukebox Workers Local # 134. The Chicago crew were deadly in their control of this racket.
The entire state of Illinois was locked down by the mob. Even in the little ole city of Springfield, under the shadowy boss Frank Zito, the mob ran vending machine rackets. Zito himself owned Modern Distributors Inc., the largest vending machine company in Springfield.
I could go on and on with a list a mile long of mafiosi and their associates who ran vending companies across the country…but I think you get the idea.
By the early 1950s, the FBI and local law enforcement authorities were documenting widespread ownership, control or otherwise domination of this entire business.
During a major probe of the vending machine industry in Washington, D.C. in 1959, U.S. Senate racket investigators had called the entire nationwide industry “the racket-infested coin-machine business is rotten from top to bottom.”
The coin-machine industry became a “racket industry”, and was labeled so by law enforcement because of several key factors that made this particular type business very attractive, and tailor-made for racketeering and Mafia infiltration.
It is easy to understand when considering that the vending machine business offered the mob these factors and benefits:
a) A 100% COD business (no receivables), ALL cash (coins). The vending business was perfectly poised and easily lent itself to both sales-tax and income-tax evasion. It was one of the easiest businesses to “skim” from. For many years it was an unlicensed and unregulated business with no oversight or governmental regulations.
b) Racketeers always look to monopolize any business they engage in, to stifle legitimate competition through the use of fear and intimidation. Trade associations and labor unions especially formed to govern the jukebox and vending industry were used as a whip to either organize vending rivals forcing their operating costs to rise, or to drive them from the business. This monopolistic control also later helped with setting price control. Coercion and extortion were the tools most often used to control the business.
c) Once the mob monopoly was established, the underworld was able to designate controlled territories and jurisdictional areas to “carve up” territory amongst mafiosi. A typical goal in any mafia dominated activity.
d) Often times small businesses are in need of money to operate. Vending companies commonly extended loans to these establishments, getting paid back through the weekly revenue the machines generated. These “loans” were often shylock loans which more often than not bound the “location” to the vendor for life. Not to mention it was a great way to expand into the loanshark racket.
e) The type business where machines were placed were typically nightclubs, bars, taverns, restaurants, diners, pizzerias, retail stores, etc., which often lent themselves as gateways and springboards to other mob activities such as bookmaking, numbers, shylocking, stolen goods, untaxed cigarettes, narcotics, etc.
f) Untaxed cigarettes. The bootleg cigarette racket was perfectly suited to compliment the vending machine racket. Cigarettes smuggled in from southern states were often affixed with counterfeit tax stamps and sold as legitimate smokes through the thousands of Mafia controlled cigarette machines located throughout the city. It made an already very lucrative business even more attractive to mobsters, allowing them to get top dollar for a product they bought dirt cheap.
g) Some of the more creative wiseguys I’ve known would even go so far as to send out “raiding” crews or “theft” crews to locations where legitimate rival vendors had their machines placed. These teams of young hoods would simply walk into a tavern or diner, announce that they were sent from the rival vending company to restock, adjust or “fix” the machine on premises, and then just strap the machine to a hand dolly and roll it out of the location, lift it into a work van and take off…the result was twofold.
The racketeer vending company built up his stock of expensive jukeboxes, cigarette and pinball machines by stealing and not buying his supply of machines…a great way to save money and expand your stock. This tactic also helped to quickly destroy the competition by costing them a ton of money to constantly have to replace the stolen machines.
h) Jukeboxes were a very lucrative part of the coin-machine business. Not only because they generated a lot of quarters, but also because they could be used as a vehicle to help push the career of many young aspiring singers by controlling the volume of times their songs would be played, thereby expanding their popularity. Many mob guys were able to “sign” contracts with future singing stars because of the influence they had with jukebox distribution and record playing to make the songs “hits.”
i) Similar to untaxed cigarettes, the ability to stock jukeboxes with counterfeit records, or “fugazy 45s” was a big edge that mob guys had over legitimate jukebox operators. Legitimate music records were not inexpensive to buy. The need to constantly upgrade and rotate records to keep the most popular songs in stock on a jukebox route was always a financial challenge. With the ability to buy cheap counterfeits, mob operators were able to cut their overhead tremendously.
j) By the mid-1970s, video game machines came into existence. They quickly became the equivalent of super computerized pinball machines. One of the first being named Pac-Man. Besides the tremendous craze they became overnight on their own, machine manufacturers soon experimented and came up with a modern day slot machine, or “one-armed bandits.” These slot machines had bill-acceptors built into them that could accommodate a $1, $5, $10, or $20 dollar denomination note…the rest is history!
Forget all about the year 1935, and boss Frank Costello with his thousands of one-armed bandits placed all over The Big Apple because these new video gambling machines would soon eclipse anything the modern mafia had seen previously. They quickly became one of the biggest cash cows for the mob. Known variously as Joker-Poker, Eight-Line, Lucky Seven, Blackjack, and a host of other gaming variations, these machines became the rage across New York City and the entire nation.
It was very commonplace for these video slots to generate a weekly profit of from $1,000 up to $5,000 net per machine. It a mob guy had 5-10 machines out there working for him, he could become a wealthy hood in no time. And there were plenty of mafiosi who had a lot more than just 5-10 slots placed on the street. As the old adage goes, “everything old becomes new again.”
k) The usual percentage split between a location or “stop” was 50/50 in cash between the vendor and business owner. But because it was all cash and automatic “counters” could be manipulated, a scheming vendor could easily shortchange a location. It was another way for a vending company to constantly gain “the edge.”
l) Another lucrative scheme that was plied by some unscrupulous vending operators and hoodlums was to advertise through a fugazy vending company and frontman “routes for sale.” Maybe a cigarette route, or combination cigarette and pinball game route.
It is common knowledge even among legitimate people how financially lucrative and easy the vending machine business is to operate. Because it is mostly an “owner absentee” business, there was no shortage of eager, small business investors to plunk down a bundle of cold, hard cash in order to purchase a 10, 15, or 20 machine route that was alleged to be already established and supposedly returning a solid, hefty weekly profit to whomever was lucky enough to quickly get in on the ground floor of this easy “gift” of a business.
Of course, once the investor did, the lucrative “stops” his route had turned out to be anything but lucrative at all. They were mostly low revenue, “dead” locations that couldn’t generate four cents.
The volume of sales the buyer “clocked” for several weeks before purchasing the route had been staged by the sellers, with the vending firms minions dropping tons of coins into the machines daily to give a false impression that the route was a busy and lucrative operation.
The buyer may have purchased the route for $30,000 to $150,000 or better, depending upon the sales pitch and number of machines “put on the street” operating. The going rate was usually a 50% down payment on signed contract with monthly installments for the balance. Once the buyer fell behind on his notes (which they always did), the noteholders would then confiscate the machines and “route” back from the purchaser….and sell it all over again!
New York City and it’s outer suburbs such as Nassau and Suffolk Counties on Long Island, and Westchester County to the north had a plethora of racketeers, known hoodlums and noted mafiosi front and center in the vending machine business from the start.
The laundry list that follows, although quite extensive, is but a small sampling of the mafiosi and mob associates who have engaged in jukebox and vending machine racketeering through the years.
I tried listing and categorizing according to Family so as to better lay out the underworld landscape of this lucrative racket. We start with The Luciano/Genovese Family:
• Vito (Don Vitone) Genovese – This man needs no introduction. He held interests and partnerships with many of his Family’s members in various jukebox firms, but his main company was the Tryan Cigarette Service that held a virtual lock on distribution to nearly all establishments in Lower Manhattan. He was partnered with the Eboli brothers in this venture.
• Francesco (Frank Costello) Castiglia – The original consigliere and later acting boss to Lucky Luciano, at one time he controlled the largest network of slot and vending machines in the country. A renowned and highly respected racketeer whose far-flung slot machine enterprises were legendary, both in the New York metropolitan area, as well as Las Vegas, California, and Louisiana. Over the years junior partners of his were Philip (Dandy Phil) Kastel, Meyer Lansky, and boss Carlos Marcello.
• Thomas (Tommy Ryan) Eboli – A longtime capo who rose to become the underboss/acting boss for Vito himself. Eboli owned and operated the Tryan Cigarette Vending Service (in partnership with Vito Genovese), which was a major distributor of jukeboxes and cigarette machines in Manhattan, especially Downtown Manhattan’s Greenwich Village area. He was also partners in many other smaller vending machine routes with various mob affiliates.
• Gerardo (Jerry) Catena – Long considered one of the most important and influential mafiosi in America, Catena was also one of the wealthiest mobsters in all of gangland. He was a legitimate stockholder in Bally Corp., which then as now was a multi-billion dollar medley of corporations that held vast interests in the manufacture and sale of Bally brand jukeboxes and slots.
They also own gambling casinos in Las Vegas, Atlantic City, the Bahamas, Puerto Rico, and many other off-shore casinos. Catena held the rights for exclusive control and distribution of all Bally jukeboxes, and slot machines in the New York and Tristate area. He was the principal owner of Runyon Sales Co., another major jukebox-vending and slot machine company based on 11th Avenue in Manhattan around midtown, he held court from Bally’s headquarters for decades.
• Consigliere Michele (Mike) Miranda and capo di decina Antonio (Tony the Sheik) Carillo – They were partners for years in a large jukebox vending firm based off Queens Boulevard in Rego Park named Local Vending Corp., 78-18 Woodside Ave., Elmhurst. Their soldier Ciro Perrone was one of their jukebox “salesman.”
Side Note: Iconic Genovese business associate Alfred (Al) Miniaci and his family owned the Paramount Vending Corp., in New York for many decades. Miniaci was a legendary figure in the coin-machine industry, and Paramount Vending was indeed paramount as a leading distributor in the metropolitan area. Although not a hoodlum himself, Miniaci was said to be “with” Benny the Bum DeMartino of East Harlem. Miniaci worked hand in glove with wiseguys his whole career.
• Benjamin (Benny the Bum) DeMartino – A top soldier who was later elevated to a capo who owned Benjamin Vending Co., and National Vending Corp., both in Westbury, LI. Benny the Bum was a major shylock who used his money lending business to expand his vending business, and vice versa.
• Theodore (Teddy the Bum) DeMartino – Older brother to Benny and a top soldier in his own right. “The Bum Brothers” were known to be active in the jukebox rackets. Teddy was a convicted truck hijacker and strong-arm soldier in the Harlem faction of the borgata.
• Joseph (Joe Bari) Dentico – The older brother of the better-known future capo Larry Dentico. Before his death, Joe was very active in the narcotics traffic. Dentico was also a known vending machine racketeer with interests in at least one jukebox firm.
• Joseph (Joe) Ragone – Top mob associate and a known narcotics dealer. He was partners with his brother Gaspare in a Bronx vending machine firm, Rag Vending Co.
• Angelo (Charlie Four Cents) Salerno – A top Harlem soldier who was partners with his son Fat Freddy Salerno, Jerry Catena, and others in several major vending companies; Young Distributors of 375 11th Avenue, Runyon Sales Corp., 593 10th Avenue, and Atlantic-New York Corp., of 843 10th Avenue, all of Manhattan.
• Joseph (Joe Cago) Valachi – The notorious soldier who later turned informant. A prolific heroin dealer and enforcer under underboss Tony Bender Strollo, he also owned a jukebox-vending route in the Bronx.
• Matthew (Matty the Horse) Ianniello – He was involved in vending machines through subordinates and mob partnerships in his myriad of bars, nightclubs, restaurants, and skin joints in Times Square.
• Michael (Mike Rosie) Maione – A soldier in the regime of Pasquale (Patsy Ryan) Eboli, this old-time convicted bootlegger and counterfeiter was also active in the jukebox rackets in the Bronx and Upper Manhattan area in the late 1940s-1950s era.
• Philip (Big Farvel) Kovolick – He was an early entry into the vending rackets. A close associate of Meyer Lansky, Lucky Luciano, Longy Zwillman, Abe Gordon, and other top hoods, Kovolick became an official of Teamster Local #805, which was formed by mob elements to take control of the fledgling vending machine industry in NY/NJ. He was a point man of sorts for the Jewish mob under Lansky, and helped run vending machine rackets for years before relocating to South Florida.
The Anastasia/Gambino Family
• Capo John (Johnny Dee) D’Alessio – Along with his brothers Alex and Mike and his uncle the notorious Alexander (The Ox) DeBrizzi owned and operated the King Vending Machine Co, the most dominant vending firm on Staten Island.
• Alfred (Big Freddy) Eppolito – A longtime soldier, Eppolito owned Colonial Enterprises, a jukebox distributor at 605 Grand Ave., Brooklyn.
• Agostino (Augie) Amato – He and his sons were major distributors of jukeboxes and cigarette machines down in Miami, Florida. He operated the Cigarette Service Co. Amato was an original member and later became a very respected capo who had moved to Florida by the early 1950s where he established himself as a top loan shark and vending racketeer. He was an intimate of both Carlo Gambino and Philadelphia Family boss Angelo Bruno who was another top vending rackets boss in both Philly and South Florida.
• Carmine (The Doctor) Lombardozzi; he was well known to control jukebox operations for his Family in the Sheepshead Bay section of Brooklyn.
The Profaci/Colombo Family:
• Salvatore (Sam) Badalamenti – Low-key Profaci capo who owned an interest in Caruso Music Co., a Rego Park, Queens jukebox firm.
• The Gallo Brothers…and we’re not talking Ernest and Julio of the famous winemaking family here.
Joseph (Crazy Joey), Albert (Kid Blast) and Larry Gallo were deeply involved in Brooklyn’s jukebox rackets. They even started a jukebox and vending machine owners association to try and better corral extortionate control over the industry.
They held sway for a time over Teamsters Local # 266 through mob associate Joe DeGrandis, Ernest Zundel, and labor union racketeer Vincent (Jimmy Unions) Amalfitano.
Joey and Larry Gallo were even once subpoenaed before a 1957 U.S. Senate Rackets Committee by Senator Bobby Kennedy to testify about their knowledge and attempts to extort fees from jukebox vending operators in Brooklyn. Both repeatedly pled the Fifth Amendment of course.
In 1960, DeGrandis, Zundel, and Joey Gallo were convicted in Mineola and Brooklyn of extortions related to the shakedown of a jukebox machine executive and were each sentenced to 7-1/2 to 8 years in prison. Gallo received 7-15 years in state prison on a another related extortion case.
• Pasquale (Fat Patty) Catalano – A Queens-based soldier in the Family, Catalano held an interest in a Long Island vending machine company with Stanley Nankoff, a longtime mob-connected industry figure and former partner of Genovese boss Tommy Eboli.
The Gagliano/Lucchese Family
• Savino (Sam) DeBendictus – A convicted bookmaker, hijacker and mob associate who owned several vending companies; G & F Vending Co., and Grand Vending, both of Hicksville.
• Felice (Philly Black) Falco and James (Jimmy Black) Falco – Originally based out of East Harlem and Corona, the “Black Brothers” were important policy racketeers who later expanded into the Queens and Long Island vending rackets. Philly Black was the righthand man to Tony Ducks Corallo, future boss of the Family.
The Falco’s actually once hid Corallo from Senate Rackets Investigators who had subpoenaed him to testify. The Falco’s were also related through marriage to the notorious capo Ettore (Little Eddie) Coco.
• Capo Samuel (Big Sam) Cavalieri – One of the top policy racket kingpins along 1st Avenue in East Harlem. He was a longtime member who was influential in the jukebox racket and later was involved in corruption in the laborers and bricklayers union.
• Frank (Frankie Dio) Dioguardi – A top-ranked associate-member of the Lucchese mob, and brother of labor racketeers Tommy and Johnny Dio. Frankie had relocated down to Miami by the early 1950s. He engaged in many rackets such as shylocking, extortion, gambling, and narcotics. He also operated several jukebox and cigarette machine businesses that he later sold and then stole back the “stops”.
He and his brother-in-law, mobster Anthony Sutera, operated Sunny Isles Vending Co., 17308 Collins Avenue, Miami. This firm owned 53 cigarette machines which they placed throughout the Miami area. He repeatedly sold and resold the same routes. Dio was eventually investigated for income and sales tax evasion related to these businesses. Frankie Dio was notorious as a cheat and schemer.
The Bonanno Family did not have as many interests in the vending field. But although they were not as heavily engaged in vending rackets as their mob contemporaries the iconic capo Joseph (Bayonne Joe) Zicarelli, a veteran member based in New Jersey did own a piece of a cigarette machine distributor in West New York, New Jersey.
• A second mob figure from this crew was Frank V. Lupo – A little-known capo in the Bonanno Family who operated Mayfair Music Co., of Middletown, in Upstate New York that was known to dominate the vending field in that section. Lupo, who had convictions for policy, possession of a pistol, and disorderly conduct, was one of the first mob guys to establish jukeboxes up in Orange and Rockland Counties.
• Veteran Bonanno soldier Vito Militano worked closely with Lupo in this vending firm. Militano had convictions for policy operation (twice) and possessing a blackjack.
There have been other mob guys…many others mob guys in this field. Nearly all 26 borgata’s throughout the country had jukebox and vending machines networks operating to one degree or another in their respective territories for upwards of fifty years.
But with the advent of modern technology, as well as the steep decline in smoking habits, by the early to mid-1980s, continuing up to the present day the vending machine business started to wane.
Soon, personal music devices such as piped-in music, Walkman’s, to the current iPod craze, and laptops provided personalized music at the touch of a button. It made jukeboxes become obsolete. People can now carry music right in their pocket.
Cigarettes are no longer the allure they once were. Some people still smoke but not nearly at the volume they once did. So that end of the vending business collapsed as well.
And as for that old classic the pinball game, shuffleboard games, even video games such as the early Pac-Man and other such diversions that consumers loved to play at their local gin mills?
With the advanced technology of PC’s, laptops and online gaming available today, game aficionados don’t even have to get off their couch. They literally have thousands of the most interesting and sophisticated games known to mankind at their fingertips.
With the development of “online gambling websites”, a bettor doesn’t have to jump in his car and drive to a legal casino, or even his friendly neighborhood illegal slot machine parlor down the block anymore. He can just click into one of these popular sites, pledge up a credit card and he’s on his way to playing a wide variety of cyber slot machines, dice or card games, roulette, or any number of other casino-style gambling he wishes…it is a very different world nowadays!
Today, the only type of automatic vending machine still thriving are food, snack, coffee and soda machines…but these were never mob dominated and are not conducive to racket control. They are mostly distributed by major corporations.
…As the old saying goes, “nothing good lasts forever.” The mob had one hell of a good thing going for many decades, but as with everything else in life, its time and era has passed. Technology curbed this racket, and the entire industry for that matter much more efficiently than anything Senator Robert F. Kennedy and his Senate Rackets Committee could have ever done.
Today, the one coin-operated device that is still a huge money-maker for the underworld are the “joker-poker”, blackjack and other gambling-type machines that mob guys still place in private social clubs and underground gambling dens.
Although these are still extremely profitable, even those operations are a far cry from the volume of machines and revenue once placed “on the streets” by the various borgatas and independent racketeers.
As I stated above, the online version of these slot machines has reduced street volume by a large measure. It’s mostly the older gamblers who aren’t computer savvy who frequent these type of slot machines.
By and large the jukebox, pinball, and cigarette-vending machine industry has gone the way of the dinosaur…and it’s not coming back anytime soon!
Until the next time, “The Other Guy”
This article was originally posted “here“