Numbers game, also known as a numbers racket, policy racket, Italian lottery, or nigger pool, is an illegal lottery played mostly in poor neighborhoods in the United States, wherein a bettor attempts to pick three digits to match those that will be randomly drawn the following day. In recent years, the "number" would be the last three digits of "the handle"—the amount race track bettors placed on race day at a major racetrack—published in racing journals and major newspapers in New York. A gambler places a bet with a bookie at a tavern or other semi-private place that acts as a betting parlor. A runner carries the money and betting slips between the betting parlors and the headquarters, called a numbers bank or policy bank. The name "policy" is from a similarity to cheap insurance, both seen as a gamble on the future.
The game dates back at least to the beginning of the Italian lottery, in 1530. "Policy shops," where bettors choose numbers, were in the United States prior to 1860. In 1875, a report of a select committee of the New York State Assembly stated that "the lowest, meanest, worst form ... [that] gambling takes in the city of New York, is what is known as policy playing." The game was also popular in Italian neighborhoods known as the "Italian lottery", and it was known in Cuban communities as bolita ("little ball").
By the early 20th century, the game was associated with poor communities and could be played for as little as $0.01. One of the game's attractions to low income and working class bettors was the ability to bet small amounts of money. Also, unlike state lotteries, bookies could extend credit to the bettor. Policy winners could avoid paying income tax. Different policy banks would offer different rates, though a payoff of 600 to 1 was typical. Since the odds of winning were 1,000:1, the expected profit for racketeers was enormous.
Francis A. J. Ianni, in his book Black Mafia: Ethnic Succession in Organized Crime writes: "By 1925 there were thirty black policy banks in Harlem, several of them large enough to collect bets in an area of twenty city blocks and across three or four avenues." By 1931, there were several big time numbers operators, James Warner, Stephanie St. Clair, Casper Holstein, Ellsworth "Bumpy" Johnson, Wilfred Brunder, Jose Miro, Joseph Ison, Masjoe Ison and Simeon Francis. The game survived despite periodic police crackdowns.
Number games are popular in many Bahamian communities. While gambling in casinos is legal for tourists visiting the Bahamas, it is forbidden for Bahamian residents. There is also no legalized lottery for Bahamian nationals. As a result, the predominant form of gambling among residents is playing the Numbers. 
The Italian lottery was operated as a racket for the American Mafia, originally in Italian-American neighborhoods such as Little Italy, Manhattan and East Harlem by mobsters of the Morello crime family. A young Joseph Bonanno, future boss of the Bonanno crime family, expanded the Italian lottery operation to all of Brooklyn and invested the profits in many legitimate businesses. In the 1930s, Vito Genovese, crime boss of the Genovese crime family, gained control over the Italian Lottery, allowing him to have ample money to invest in nightclubs in Greenwich Village.
Dutch Schultz is said to have rigged this system, thanks to an idea from Otto Berman, by betting heavily on certain races to change the Win, Place and Show numbers that determine the winning lottery number. This allegedly added ten percent to the Mob take.
Today, many state lotteries offer similar "daily numbers" games, typically relying on mechanical devices to draw the number. The state's rake is typically 50% rather than the 20–40% of the numbers game. The New York Lottery and Pennsylvania Lottery even use the names "Numbers" and "Daily Number" respectively. Despite the existence of legal alternatives, some gamblers still prefer to play with a bookie for a number of reasons. Among them are the ability to bet on credit, better payoffs, the convenience of calling in one's bet on the telephone, the ability to play if under the legal age, and the avoidance of government taxes.
One of the problems of the early game was to find a way to draw a random number. Initially, winning numbers were set by the daily outcome of a random drawing of numbered balls, or by spinning a "policy wheel", at the headquarters of the local numbers ring. The daily outcomes were publicized by being posted after the draw at the headquarters, and were often "fixed". The existence of rigged games, used to cheat players and drive competitors out of business, later led to the use of the last three numbers in the published daily balance of the United States Treasury.
The use of a central independently chosen number allowed for gamblers from a larger area to engage in the same game and it made larger wins possible. When the Treasury began rounding off the balance many bookies began to use the "mutuel" number. This consisted of the last dollar digit of the daily total handle of the Win, Place and Show bets at a local race track, read from top to bottom. For example, if the daily handle (takings at the racetrack) was:
- Win $1004.25
- Place $583.56
- Show $27.61
then the daily number was 437. By 1936, "The Bug" had spread to cities such as Atlanta where the winning number was determined by the last digit of that day's New York bond sales.
- Albert J. Adams (1845–1906), operator of policy game in New York City in the 1900s
- Ken Eto (1919–2004), operator of policy game in Chicago
- Giosue Gallucci (1865–1915), operator of Italian policy game in Italian Harlem in the 1910s, known as the King of Little Italy
- Don King (born 1931), operator of a policy game in Cleveland before achieving fame as a boxing promoter
- Peter H. Matthews, operator of policy game in New York City in the 1900s
- Sai Wing Mock (1879–1941), operator of policy game in Chinatown, New York in the 1900s
- Joseph Vincent Moriarty, operator of numbers game in Hudson County, New Jersey in the 1950s
- Stephanie St. Clair (1886–1969), operator of policy game in Harlem, in the 1920s and early 1930s.
- Lexow Committee, uncovered illegal gambling in New York City
- Charles Henry Parkhurst
- F. Norton Goddard
- 1860 Private lotteries flourish in large cities
- 1894 Lexow Committee investigates
- 1901 Albert J. Adams arrested in New York City
- 1906 Albert J. Adams takes his own life
- 1916 Peter H. Matthews dies in prison
- 1964 New Hampshire starts the first modern US lottery
In popular culture
The 1948 film noir Force of Evil revolves around the numbers racket, with the plot hinging upon the workings of policy banks. The film tells of a gangster who is trying to take over all the banks in New York City by rigging the mutuel numbers to come up 776 on Independence Day. Since everybody plays those numbers for the Fourth of July, the banks will go bankrupt filling the policies.
In the 1972 film Shaft's Big Score!, John Shaft investigates the death of his friend, Cal Asby and discovers that while Asby appeared to be a beloved community member, he was also tied to a local numbers racket. A scene shows a character going door to door in a housing project, collecting money and handing out numbered slips. Missing money from this local numbers game is central to the film.
In the film The Godfather, Sonny and members of the Corleone family discuss the fact that black gangs have taken over their "policy banks" due to the turmoil caused by the gang wars between the Corleones and other New York Mafia families.
The numbers racket is also portrayed in the 1997 film Hoodlum.
The episode Fahrenheit 932 in CSI Las Vegas investigates the murder of a runner.
- The new Partridge dictionary of slang and unconventional English: J-Z, Volume 2. Taylor & Francis. 2006.
- Cary D. Wintz and Paul Finkelman, ed. (2004). Encyclopedia of the Harlem Renaissance. Vol. 2. Taylor & Francis.
- Sifakis, Carl. The Mafia Encyclopedia. Facts on File, 2005, p.336
- Holice and Debbie, Our Police Protectors: History of New York Police Chapter 13, Part 1. Accessed on 4/2/2005
- Harlem Gangs: The Numbers Game from Crime Library
- Hess, Margaret (February 25, 1934). "Game the Police Are Seeking to Curb Draws Victims From the City's Poor.". New York Times. Retrieved 2008-07-26. "The police offensive recently launched against the policy game has resulted in numerous arrests and the raiding of a "bank" in which three sacks of "slips" were discovered. Central depots in Harlem have also been closed and many collectors and bankers driven to cover."
- "Joseph Bonanno, 97; Infamous Mobster". Los Angeles Times. May 12, 2002.
- Sifakis, pp.38-9
- Associated Press, February 12, 1936
- ""Al" Adams a Suicide, Following Misfortunes; Broken By Ill-health and Money Losses, He Shoots Himself. Sage & Co. Sank $2,000,000. He Also Felt Deeply The Disgrace Of Prison Sentence. Great Fortune Made In Policy Swindle." (PDF). New York Times. October 2, 1906. Retrieved 2008-07-23. ""Al" Adams, known as the "Policy King," committed suicide yesterday morning by shooting himself. Members of his family and those in the apartment house who ... Standing before a mirror in his apartment on the fifteenth floor of the Ansonia apartment hotel, "Al" Adams, known as the "Policy King," committed suicide ..."
- "Paid $500 To Schmittberger.". New York Times. October 12, 1894. Retrieved 2008-07-26. "Forget Says This Tribute Went To The Police Captain. The Agent Of The French Line Tells The Lexow Committee Of The Money Transaction. Complete Exposure Of The Policy Business In This City. A List Of 600 Places Where The Gambling Was Conducted. Only One Precinct Free From The Evil."
- New York Times; Wednesday May 19, 1883; Policy-dealers Punished.
- Lawrence J. Kaplan and James M. Maher; The Economics of the Numbers Game in American Journal of Economics and Sociology;
- Nathan Thompson; Kings: The True Story of Chicago's Policy Kings and Numbers Racketeers An Informal History; The Bronzeville Press ISBN 0-9724875-0-6 (2003)
- Shane White, Stephen Garton, Stephen Robertson and Graham White, Playing the Numbers : Gambling in Harlem Between the Wars. Cambridge, Mass.: Harvard University Press, 2010. ISBN 978-0-674-05107-2.
- Sucker's Progress: An Informal History of Gambling in America, Herbert Asbury