Though visitors of Hot Springs, Arkansas today don’t see the gambling, prostitution, bootlegging, and gangsters that were once rampant in the spa city, these operations had a strong foothold for decades, especially in the 1930s.
Illegal gambling occurred in the city as early as the mid-1800s and following the Civil War, was firmly established. By the late 1870s, gambling had become an industry that rivaled the healing waters of the hot springs. During this time, a Canadian gambler named Frank Flynn had arrived in the city and by the early 1880s, was in control of the gambling operations, as well as many of the brothels. By paying law enforcement officers of the Police Department and Sheriff’s Office, he prevented any intervention into his legal activities. Flynn, most often called “Boss Gambler”, either owned or controlled seven gambling houses, and any who dared to enter Hot Springs and attempt to open up a rival gambling house were dealt with by the police.
One man who dared to do so was a gambling entrepreneur from Illinois named Jim Lane, who arrived in about 1880. Lane soon opened two high-end gambling halls — the Palace and the Monarch. Lane refused to align with Flynn or pay a percentage to him for the right to operate his business. In response, Flynn, along with several other men attacked and wrecked the Palace Casino. During the attack, one of Lane’s dealers killed one of Flynn’s thugs. Afterward, Lane fled Hot Springs and made his way to New Orleans, Louisiana.
By the summer of 1882, many people were tired of illegal gambling and some of the shady elements it brought to the city. One of these people was Charles Matthews, the editor of the Hot Springs Daily Hornet, who raged against gambling and Mayor T.F. Linde for doing nothing to stop it. Shortly afterward, Mayor Linde, who also served as a judge at the time, was so angered that when he met Matthews on the street, he pulled out his pistol and began firing. When the smoke cleared, Linde had shot and wounded Matthews three times, as well as wounding a peddler and city councilman who were in the line of fire. Amazingly, the mayor was neither charged nor removed from office.
After the newspaper editor recovered from his wounds, he renewed his attacks on illegal gambling and the mayor, as well as on several other prominent men involved in the gambling business. Two of these citizens included the wealthy and powerful Samuel L. Fordyce and his partner, D.C. Rugg, who owned an interest in the Arlington Hotel and its gambling club. His article implied that the two men were in cahoots with none other than “Boss Gambler” Frank Flynn and labeled the trio the “Arlington Gang.” After this appeared in the newspaper, Samuel Fordyce approached Matthews on Central Avenue and struck the newspaper man with his cane. Pulling his pistol in self-defense, Matthews fired but missed. D.C. Rugg then pulled his gun, and Matthews fired again hitting Rugg in the leg. Matthews, who was wounded, was able to retreat down the street but was followed by Frank Flynn who fired a final shot at Matthews, killing the editor. Fordyce, Flynn, and Rugg were all charged with manslaughter. In the end, Flynn and Rugg were acquitted, while Fordyce was fined $200 for starting the conflict when he attacked Matthews with his cane.
In the winter of 1883, a new player came to town — former Confederate Major S.A. Doran. Doran had met Jim Lane in New Orleans, who had been run out of Hot Springs and his Palace Casino by Frank Flynn. Whether Doran decided to avenge his friend or simply liked a good fight, he decided to go to Hot Springs and challenge the gambling kingpin. Upon his arrival, he reopened the Palace Casino, refused to join Flynn’s gambling ring, and all attempts at intimidating him were ineffective.
The first violence occurred when Flynn challenged Doran to a duel not long after his arrival, which resulted in Flynn being shot once in the chest but not fatally. Afterward, there were other clashes between the two factions with men being murdered on each side. During this violent time, Doran killed ten men before he was killed in 1888. Afterward, Flynn continued to control the gambling operations and used the city police department to collect his debts and to force the competition to leave town.
Though Doran was dead, the feud continued into the 1890s, with the Hot Springs Police and the Garland County Sheriff’s Department in the middle as the two factions clashed over which law enforcement agency would control illegal gambling activities in Hot Springs and its profits in the form of graft and kickbacks. This led to the Hot Springs Gunfight between the two groups on March 16, 1899. After the gunfight, Frank Flynn was forced out of town by a Citizens Commission, but illegal gambling did not go away, and corruption within both law enforcement agencies remained well into the 20th century.
Within this arena of corruption, Hot Springs continued its illegal gambling habits, and by the 1920s the city was filled with hotel rooms, saloons, and back alleys that included casino-type gaming of all kinds. In 1926, Leo McLaughlin was elected mayor and fulfilled a campaign promise to run Hot Springs as an “open” town, which included legal gambling, and overlooked hotels that advertised the availability of prostitutes, and off-track booking was available for virtually any horse race in North America. As mayor, McLaughlin reigned as the undisputed boss of Garland County politics for the next 20 years. However, McLaughlin took it to a new level using voter fraud and other unlawful tactics to drive his political machine. During his tenure, local law enforcement was controlled by a political machine and a former sheriff, who attempted to have the state’s anti-gambling laws enforced and to secure honest elections, but was murdered in 1937. No one was ever charged with his killing.
Between 1927 and 1967, Hot Springs operated the largest illegal gambling racket in the country. In the 1930s, over a million baths a year were given and Hot Springs became America’s first resort.
During McLaughlin’s time in office, many underworld characters frequented Hot Springs’ spas, and gambling became one of the town’s most popular forms of entertainment. Some of these infamous names included Owen Vincent “Owney” Madden, Bugs Moran, Charles “Lucky” Luciano, and Al Capone. A few of their favorite hangouts were the Southern Club, which now houses Josephine Tussaud’s Wax Museum; the Ohio Club, now considered to be the oldest bar in Arkansas; the Arlington Hotel, which still entertains guests; and the Oaklawn Race Track, which is still open today.
Al Capone first came to Hot Springs in the early 1920s during the Prohibition era, and he and his boss, Johnny Torrio, stayed at the Majestic Hotel. During this time, Capone and his men came to town to strike deals with the many moonshiners in the area. Soon, he purchased an under-performing dairy outside of town and turned it into his own moonshine distillery. Mimicking the water products of the Mountain Valley Spring Water Company, which had been distributing water from Hot Springs since 1871, Capone placed his moonshine in clear glass bottles and called his product Mountain Valley Water. He would then smuggle his bootleg liquor in tanker railroad cars.