Nick Pileggi, a longtime chronicler of New York’s underworld, calls Rothstein “the key figure in the history of organized crime, the godfather to both Meyer Lansky and Lucky Luciano, the man who taught the untutored Italians.” One way to understand Rothstein is as a player in the city’s endlessly evolving wars of ethnic succession. He began by courting—and then manipulating—the fading Irish bosses of Tammany Hall, who ruled New York through their intricate collusion of politicians, police, and clergy. Tim Sullivan, once the city’s dominant boss, was first Rothstein’s patron, then his dependent, ultimately borrowing money from him to pay off his gambling debts.
But Rothstein’s true significance lies elsewhere. Just as Houdini understood that his real audience wasn’t in the theatre but in the national press, Rothstein knew that New York gambling could be scaled up. He became the master of the “layoff.” The bookmaker’s challenge, from the beginning, was simple: if too much money poured in on the favorite, the bookie risked ruin. The solution was to balance the action by “changing the line,” adjusting the odds in order to encourage wagers on the underdog. If that failed and the favorite was still too heavily backed, the bookie would “lay off” the excess bets with another bookmaker, essentially betting on the favorite himself, to hedge.
Starting in the nineteen-tens, with his acquisition of a string of Long Island casinos, and continuing into the twenties, Rothstein was the first to regionalize—and then nationalize—the layoff. He grasped the essential truth: everyone loses in the end, so the real art isn’t to pick winners but to have enough money to lend to those who imagine that they can. His two most famous nicknames—the Brain and the Big Bankroll—were interchangeable, since the bankroll proved the brain. The bankroll also let him hunt for tiny arbitrage opportunities by shifting odds across different books, squeezing profit from the ceaseless churn of other people’s hopes.
As Rothstein’s operation expanded, independent bookmakers became nodes in his network. He put the “organized” in organized crime. The next generation of gangsters—those who carved New York into families and divided the country into regions under a single Commission—inherited the scope and the national infrastructure of his layoff system.
Yet the reason Rothstein’s legend endures is mainly because of two much debated mysteries: the fixing of the 1919 World Series and his murder, on November 6, 1928. Both have inspired a literature far out of proportion to the sordid events, perhaps because each holds a certain moral voltage: evidence that even the invulnerable can be undone, that anything can be fixed, and that anyone can be killed.