The Casinos

Perhaps the most obvious evidence of the new standard of political morality was the sudden opening of a network of lavish, Las Vegas-style gambling casinos across Sydney in the 1960s. Unlike the spartan environment of the two-up and baccarat schools, the new casinos invested heavily in expensive assets that could not easily disappear if the police arrived: roulette wheels, dice tables, bar equipment and scanty club uniforms for hostesses. Obviously, the casino operators had to be doubly sure that the police would not raid and confiscate their equipment before they could invest such a considerable capital in incriminating assets. And, in fact, for almost ten years, seven days a week, the casinos operated openly in downtown and suburban Sydney with an enormous walk-in clientele and without any police interference.

Although there was almost nothing approaching a full public discussion of the casino scandal while the Liberal Party was in office, opposition criticism of Premier Neville Wran’s Labor government in 1978-9 finally brought the issue into the open. Speaking in rebuttal to the Opposition’s attack on his own law enforcement efforts in April 1979, Wran responded with a denunciation of corruption under Sir Robert Askin’s former coalition government: ‘The greatest political patronage in relation to casinos was the hundreds and thousands of dollars poured into the coffers of the Country Party and the Liberal Party by illegal casino operators in the State. . . It staggers me that the only time the Opposition, and particularly the Leader of the Country Party, who is one of the bagmen for the former Liberal-Country Party Governments, has even taken any interest in casinos is when this Government made them illegal.’

Raising the illegal casino question again several days later in rebuttal to Opposition criticism, Mr Wran was somewhat sharper in his attack: ‘The House and the public know the answer to the simple question of who closed illegal casinos and who for eleven years allowed them to operate and proliferate. For eleven years illegal casinos, which have now been closed, were in existence.’ It should be noted that eleven years was precisely the period that the Liberal-Country Party Government held office, largely under the leadership of Sir Robert Askin.

While Mr Wran was somewhat indirect in his remarks, the Independent MLA Mr John Hatton mentioned both ex-Premier Askin and Police Commissioner Mr Fred Hanson by name in a speech in State Parliament on 16 August 1979:

Under the Askin Government in the 1960s, the real penetration of organized crime by overseas gangsters, mobsters and Mafia took place. Shop-front gambling and rackets came of age. Large corporate frauds, consumer cheating, securities frauds, and prostitution became rife, and in some ways have continued. I have no doubt that ex-Premier Askin and Hanson knew and may have encouraged these activities.

In a series of press interviews Sir Robert Askin dismissed the charges as ‘utterly false’ but did not explain how the illegal casinos had operated so openly during his tenure of office.

Almost simultaneously with the execution of Richard Reilly in 1968, the major baccarat schools operating in and around Kings Cross began to transform themselves into casinos. The transition began shortly after the 1967-8 gang war ended, but it was not until 1969 that the first mention of the changes began to appear in Sydney newspapers. In a rather routine gambling article headlined ‘Baccarat Business Booming’, a February 1969 edition of the Sun noted that an unnamed Kings Cross baccarat school now also had roulette, pontoon and blackjack. The establishment was maintained very much in the tradition of the transitory ‘gaming school’ and ‘the shabby exterior of the club concealed an even shabbier interior’.

Within four years the half-dozen baccarat schools ringing Kings Cross had been transformed into a city-wide network of fourteen luxurious casinos. Following the style of the city’s first casino opened at 33 Oxford Street, near Taylor Square, in 1968-9, each of the six major inner-Sydney casinos had roughly the same appointments: a garish thick red carpet, ostentatious interior decor, often a fish tank, a well appointed kitchen and bar serving free food and drink, two roulette wheels, four or five blackjack tables, a baccarat table, and a bevy of uniformed young hostesses who often doubled as late-night escorts. They operated all night, seven days a week and, as they became a fashionable place to frequent, began to count celebrities, leading athletes, solicitors and politicians among their regular clientele. Although most clubs retained boxers as doormen and installed electronic security devices, entry was open to almost any reasonably-attired patron who appeared at the door, and the crowds often numbered 150 to 200 on any given night. The casinos made no attempt to conceal their location, which was marked by a sign on the street.

The cash turnover from Sydney’s illegal casinos was heavy enough by 1973 to merit comment from Launceston’s Sunday Examiner Express, concerned over the future of Tasmania’s legal state casino at Wrest Point. Sydney casino gambling ‘has grown so quickly and attracted such wealthy custom after coming under the protection of heavyweights in Sydney’s criminal society that it must be regarded as a threat to the viability of the Tasmanian casinos’.

A scientific survey of illegal casinos conducted in 1974 revealed that their combined annual turnover was in excess of $600 million with profits amounting to some $15 million. In the course of a mathematical study of roulette odds, a Sydney University economics lecturer, Dr Geoffrey Lewis, surveyed the gaming tables at the Double Bay Bridge Club three times a week for the better part of a year. Using the Bridge Club’s premises on New South Head Road as a front, Sydney identity Percival Galea operated five roulette wheels, six blackjack tables and a craps table that averaged a turnover of $2 million per week. Calculating a house profit of 2.7 per cent on roulette and 5 per cent on blackjack, Dr Lewis estimated weekly gross profits at $30,000 to $60,000. After gaining their confidence, key club employees revealed to Dr Lewis that operating expenses totalled about $16,000 per week — $10,000 in wages for the twenty club employees, $1,000 for rent, and $5,000 in bribes to senior police and politicians. With an annual turnover of $110 million and profits of some $2.3 million, Galea’s Double Bay Club ranked among the city’s top five illegal casinos with the Goulburn Club, the 33 Club and another Galea establishment, the Forbes Club. Extrapolating the Double Bay club revenues for the other major casinos yields a total annual turnover of $550 million, without including the figures for Sydney’s ten minor casinos. The same calculations indicate that annual casino bribe payments to senior police and politicians totalled $1.4 million, a statistic which reveals how they were able to remain open for over a decade.

There was a considerable continuity of control from the baccarat schools of the early 1960s to the casinos of the 1970s. The baccarat school operating at the Victoria Club in Kings Cross became the Forbes Club still under the management of Eric O’Farrell of Elizabeth Bay, Percival Galea of Coogee and Ronald Lee. The established Goulburn Club at 51-7 Goulburn Street, owned by George Zizinos Walker and Christos Paizes of South Coogee, simply added roulette to baccarat, recruited a bevy of hostesses, and polished up its image. Similarly, the baccarat school at the Kellett Club in Kellett Street, Kings Cross became the Carlyle Casino, and another established baccarat school became the 33 Club on Oxford Street.

Perhaps the most important of Sydney’s casinos was the 33 Club, the city’s first casino and one which set the tone for the others. Located only three hundred metres from the Darlinghurst Police Division headquarters, the club was opened in 1968-9 by an English migrant, Michael ‘Mick’ Moylan, Sr. A gambler and minor businessman who had worked in England with his son Michael, Jr, in the early 1960s as an importer of watches among other things, Moylan and his family landed in Australia ‘broke’ in 1964. Through involvement in SP bookmaking, Moylan acquired contacts and capital. In 1968 he bought out the largest baccarat school in Sydney at 33 Oxford Street, and opened a proper casino with roulette and blackjack. After costly renovations the club eventually achieved an effect of moderate garishness subdued only by comparison with the decor of an ordinary Sydney Leagues Club.

Moylan turned away the migrant and working-class clientle that eventually found a home at the Forbes Club and made the 33 Club the haunt of ‘show business personalities, prominent lawyers, knighted businessmen — some reportedly close to the Government ministers’. The club was an enormous success and the sight of people milling in the street and queuing up the stairs to get in became a common one almost every night of the week. According to the testimony of Michael, Jr’s wife Patricia, the club operated from 7 p.m. to 7 a.m., seven days a week, closing only for Christmas, during its seven years of operation. With fifty-six full-time employees and an ‘atmosphere’ which made it the envy of its rivals, the club was reported to have a turnover ‘five times greater than Tasmania’s legal Wrest Point casino’ — a considerable figure considering Wrest Point was then earning the State $3 million per year.

As the casino flourished, the Moylan family prospered. Michael Sr acquired a ‘luxurious penthouse flat’ in Elizabeth Bay, drove a late-model Rolls Royce with his initials painted on the doors and owned a number of well-bred racehorses. Employed by his father as an assistant, Michael, Jr purchased an expensive home in Eatham Avenue, Darling Point and added to the already extensive security system by installing bars on the upper storey windows. And in 1974 Michael, Jr, much to his father’s dismay, acquired a mistress from the attractive ranks of the 33 Club’s hostess staff.

Such prosperity attracted friends, some welcome and some not so welcome, willing to provide protection or ‘public relations’ for a reasonable consideration. Writing shortly after the club’s closure in 1974, a reporter from the Sunday Mirror observed of Moylan’s career that ‘standover men demanded their cut and he faced constant harassment from the law. One man threatened to kill a racehorse he owned unless a large amount of money was handed over.’

At the Moffitt Royal Commission into Organized Crime and Clubs, the manager of South Sydney Junior Leagues Club, Walter J. Dean, admitted that he collected $600 a month from Mr Moylan for ‘promotion’ of the casino:

Commission: When did you reach this agreement?

Dean: I haven’t my books with me but I think it was round about August, 1972.

Commission: How did it come about?

Dean: I approached Mr Mick Moylan, more or less along the lines that I was not doing particularly well in business and I would like to assist. . .

Commission: It must have been more than that?

Dean: No. When I have been gambling there I have brought people there and he appreciated that, and when they came again I would greet them and we would have a drink.

Commission: What else was said?

Dean: I have mentioned on occasions that Mr Moylan was a very astute businessman. I did mention club consultant matters to him.

Commission: Such as what?

Dean: I suggested to him that the power switches in the hallway was around — no parts being around in case somebody wanted to pull the lights out and rob the place. . .

Commission: You said Mr Moylan was a very astute businessman.

Dean: Yes.

Commission: Do you suggest any advice you would give him would be something Mr Moylan would not know?

Dean: I only mentioned a few matters to him. Mainly public relations. . .

Commission: Did you receive income from this club in amounts of $500, did you?

Dean: There was a lot of cheques for $500, yes. . .

Commission: A total of $1,300 in December 1972?

Dean: Was there? . . .

Commission: You say it was just for recommending people to go to the 33 Club?

Dean: Yes. I went through my books. . .

Commission: Is that the full story, Mr Dean?

Dean: Yes.

Commission: You would just go along to this Moylan at some stage and say you want to do this public relations. He said the sum was going to be $150 per week. Now, just take February, $600, $500, $600?

Dean: That is so your Honour.

Commission: You were not handing it to anyone else by chance?

Dean: No.

Commission: In the middle of that — in other words, in January — your wife had this win of $5,000, 10 January?

Dean: I can’t remember, I know it was round about that time, yes.

Commission: It was all Mr Moylan’s generosity, was it?

Dean: If my memory serves me correct, I think I done one trip for him to look at a casino. It could have been part of expenses in that period.

Commission: That is the Wrest Point Casino?

Dean: Yes.

In the course of his later examination of Detective Sergeant Francis Charlton, the Commissioner, Mr Justice Moffitt, speculated about the implication of Wally Dean’s testimony:

Commission: You know what is being suggested in the press, that in fact the police are giving [the alleged ‘Mr Big’ Leonard] McPherson, in effect, immunity?

Charlton: I have heard that suggested.

Commission: Does not it look as though perhaps the police are giving McPherson, in effect, immunity if they are not interested in finding out where he gets his income?

Charlton: I would say his reputation would give him his income.

Commission: Are you saying that he has got a protection racket of some sort?

Charlton: No, but I feel that with his reputation he would have some income. I have no evidence of it, but I would say if there was an SP better who had a bad bet to collect, if they phoned McPherson, and McPherson said to that man, ‘You owe $500 from last Saturday — pay up’, the man would pay up.

Commission: And McPherson would get a commission?

Charlton: Yes.

Commission: Just now that we are in this sitting — you get a case like a man like Dean, who goes to the 33 Club. You have no doubt read the evidence concerning that?

Charlton: Yes.

Commission: By merely saying, ‘I want to do public relations’ and without much more it is agreed that he gets $150 per week. . . In this kind of set-up where you have a man like McPherson, can you really say, as at the present time, that it is not at least possible a man like McPherson through some other source, without him going directly, might be receiving money through this type of illicit activity?

Charlton: I would say it could be possible, but he has been warned by Mr McNeill [of the police Consorting Squad] he is not to visit those clubs.

Commission: I am not suggesting in asking this question that there is any link, but why could not a man like McPherson, through a man like Dean, for example, receive standover money from a place like the 33 Club?

Charlton: It is possible. . .

Commission: He [Leonard McPherson] is a friend of Ronnie Lee, is he not?

Charlton: They could be on a friendly basis, I am not sure…

Commission: Lee runs the Forbes Club, does he not?

Charlton: Yes, with others.

Commission: He [Lee] is a friend of Stan Smith and George Freeman?

Charlton: I do not think he is a friend of Smith.

Commission: A friend of Freeman?

Charlton: I think that Freeman is on a friendly basis with Lee.

During its later sessions the Commission probed the Dean-McPherson relationship further and found it had some ‘sinister’ implications for the 33 Club’s operations. In the course of a police investigation into private clubs in 1972-3, Dean had told the police: ‘I don’t know [Stanley] Smith but I do know McPherson. . . I first met him when I had a barber shop in Redfern and he used to come in for a haircut. I don’t associate with him’. In an earlier interview with police in 1968, however, Dean had apparently attached greater weight to their relationship: ‘Dean admitted he had known Leonard Arthur McPherson for a period of about twenty years. This association was found through Darcy Lawson [Lawler] and the association with the Labor Party. Dean . . . stated that McPherson had visited the Club [South Sydney Juniors] at his invitation about two weeks ago but this was in relation to a political matter between McPherson and another man (Pat Hills).’ During McPher-son’s appearance before the Royal Commission into Organized Crime counsel presented several police reports that alleged a business relationship between Dean and McPherson. Although McPherson denied any business relationship with Dean, he admitted knowing Michael Moylan, Sr but was not asked to elaborate.

In his final report, the Commissioner Mr Justice Moffitt found that Walter Dean’s connections with the 33 Club were of a ‘sinister’ and ‘criminal’ character:

It is clear that the monies paid over were not for the reasons that Dean gave and that he continually and blatantly lied in his evidence concerning these monies. It is obvious that behind these payments lay some criminal conduct which Dean covered with his lies. McPherson used to frequent the 33 Club, but had been banned from it by McNeil in 1971, obviously because of the possibility of his standing over the owner.

The 33 Club’s fortunes changed markedly after the death of Michael Moylan, Sr in 1973. Despite the complete illegality of his enterprise, Moylan’s death was given considerable publicity and an obituary appearing on page three of the Sun newspaper began: ‘Owner of the 33 Club in Oxford Street, Michael (Mike) Moylan, died yesterday after returning from an overseas trip’. Moylan’s widow and son assumed responsibility for the club’s management, and soon encountered threats from standover men demanding a share of the profits.

Apparently a man of considerable charm, Michael Moylan Sr had reached an understanding with the milieu and secured sufficient protection to keep the independent standover men at bay. The former N.S.W. policeman Murray S. Riley, then heavily involved in a variety of club management schemes with Walter Dean and an associate of American Mafia figures, was a close friend of the Moylan family and frequented the 33 Club. Until Moylan’s death the well-known Sydney boxer Charkey Ramon, according to police evidence before the Royal Commission on Organized Crime, worked ‘as a bouncer at the 33 Club’. When Ramon fought in Noumea in mid-1972, for example, some staff from the 33 Club together with Leonard McPherson, his wife and Stanley J. Smith flew up for the fight.

With Moylan’s contacts lost by his death, N.S.W. police launched several raids on the club to mollify public opinion. John Regan began making demands on Moylan’s widow in the months before his execution outside another illegal Sydney casino in September 1974. Unable to cope with these pressures, the Moylan family were forced to close the casino within a year. On 6 October 1974 the Sunday Mirror reported that ‘buyers for the roulette wheels . . . and blackjack tables waited until this holiday weekend to carry out the removal under cover of darkness’. A Bulletin columnist described the 33 Club as ‘one of the best and most tightly controlled gaming rooms in the world — and that includes Vegas, London, Cannes, Venice-Lido’. He explained that it had closed because ‘the underworld is getting too rough and altogether too noisy in Sydney’.

Sydney’s remaining thirteen illegal casinos remained open for another three years and became a constant source of political controversy. Much of the media and the public became scandalized by the inability, or unwillingness, of the police to close large well-known establishments which were open to almost any pedestrian. While the press published detailed reports of the addresses, activities and ownership of the casinos almost weekly from 1972, the N.S.W. police seemed almost unaware of their existence. Writing in the National Times in 1973, one former N.S.W. police detective explained why the casinos were able to operate without serious police harassment:

I personally would not be surprised if some police officers in Sydney have shared as much as a million dollars out of graft over the years. The money is always paid in cash, by personal contact in a pub or in a car. The police ‘bag man’ will call once a month to collect.

It shows in some of the men who can’t control their new found wealth. You’ll see a policeman almost with the seat out of his pants. Then he gets transferred to a key squad and the next thing you know, he’s got a new house, a new car. . .

Although the 33 Club had opened in 1968, it was five years before the illegal casinos became a political issue. And it was not until 1973 that the casino controversy became serious. In the course of an interview with reporter Mike Rule of the Daily Telegraph, N.S.W. Police Commissioner Fred Hanson said he was aware of the illegal casinos but explained that ‘it is very difficult to gain entry and obtain evidence’. The Daily Telegraph then ran a series of stories showing just how easy it was to accumulate evidence. In one article Rule reported that casino operations paid bribes of $12,000 to $15,000 to police regularly and quoted a club manager as saying: ‘This is just pocket money or what you could lose at a good session. But to a policeman it’s a big deal.’ Although three of the clubs had already been named a year earlier by The Australian, Rule gained considerable publicity by detailing the descriptions and locations of four casinos. In a bid to keep up with the competition the Sun-Herald discovered that the casino business was now large enough to sustain a full-time training academy for croupiers.

The next round in the controversy came in June when Commissioner Hanson declared that gambling was difficult to suppress and suggested legalization of the casinos. Apparently angered by the transparent speciousness of these observations, ex-policeman Mervyn Rutherford charged in a television interview on ABC’s This Day Tonight’ that Mr Hanson’s statements about the difficulty of casino raids were ‘garbage’. After declaring the casinos ‘common gaming houses’, Rutherford claimed police ‘need only to take away that great big roulette wheel and those big tables, which they have the power to do’. Alleging a high level of police corruption, he further claimed that he had submitted a memorandum to police on 14 June demanding a raid on the 33 Club, but had been told that the club and its elite patronage would not be disturbed. The ABC program then highlighted the openness of casino operations by turning its cameras on the doorway to the Forbes Club just opposite its William Street studios.

Once media coverage began, political controversy followed and in June 1973 Premier Askin made the first of a series of gestures towards the casino problem involving statements, reports, conferences with the Police Commissioner, consideration of alternatives — everything, in fact, except the closing of the casinos. They continued to operate openly.

When Parliament resumed in August Opposition Leader Neville Wran charged: ‘The attitude of both the Government and the Police Commissioner is one of gross ineptitude and complete indifference to the daily flouting of the gaming laws’. In response, Premier Askin announced that he had received a report from Police Commissioner Hanson stating that repeated police raids had recently closed two casinos and reduced the turnover at those still remaining open.

In November the casino issue was raised in Federal Parliament when Senator A.T. Geitzelt (N.S.W.) asked: ‘Is it a fact that pistol licences have been issued to the following people associated with major illegal gambling clubs in Sydney: Mr Eric Farrell, Mr Percy Galea, and Mr Ron Lee, operators of the Forbes Club, Mr John Williams, an employee of the 33 Club and Mr George Walker, an employee of the Goulburn Club? . . . Could the Attorney-General also find out whether these pistol licences were issued before Sir Robert Askin relinquished his position as Minister for Police, and, if so, whether there is any basis for suggestions that special representations have been made to assist these men to obtain pistol licences?’ Police Commissioner Hanson answered: ‘In regard to the insinuation regarding Sir Robert Askin, I want to. say that this is utterly baseless’.

In the waning months of Liberal power in 1975 a vast new illegal casino, Sydney’s largest, was opened in a Blacktown arcade on Main Street with costly appointments worth several hundred thousand dollars including an enormous imported, dual-head roulette wheel 22 feet across. According to a Mirror reporter, detectives inspected the new venue just prior to its grand opening and expressed their approval of the lay-out.

Soon after the 1976 State elections the new Wran Labor government announced its determination to resolve the casino question. Despite assurance from the new Attorney General, Mr Frank Walker, that he would not tolerate ‘blatant breaches of the law’, the illegal casinos continued to operate openly for another eighteen months. In May the National Times published another of its regular exposes, pointing out that the Double Bay Bridge Club had recently moved its entire equipment from its original site on New South Head Road in Double Bay to Bondi Junction in broad daylight without interference. Premier Wran introduced a few new gambits in the casino game, first with an announcement that casinos would be legalized, then a government inquiry into the question, and finally no action at all.

Without the well-publicized indiscrection of the State’s new Police Commissioner in late 1977, it is possible that the illegal casinos could have operated indefinitely. Announcing at the time of his appointment in November 1976 that there would be no changes in police policy towards casinos, Commissioner Mervyn Wood continued the tolerant policies of his predecessor Fred Hanson.

Failing to win support for its scheme to legalize casinos, the Government was faced with mounting political pressure to close them down. In October 1977 the organ of New South Wales’ police officers, Police News, carried a copy of a resolution by one of its branches which read: ‘Resolved that the executive approach the Premier and voice our disapproval of the sanctioning of illegal casinos in New South Wales’. Neville Wran and Police Commissioner Wood met to agree that the casinos would close by 16 December and then met again to postpone the date. In an interview with the Sydney Sun, Mr Wood said: ‘Last week we decided that 16 December would be the last time casinos would be allowed to operate. Later I was told that more than 300 people were employed in casinos in Sydney and other parts of the State. I was rather shocked that these people would be jobless a couple of weeks before Christmas. The Premier agreed that these people should have a happy Christmas. . . The proprietors were then informed and all knew they have to close their doors on 31 December.’

The day before Commissioner Wood made this suprising announcement the Leader of the Opposition, Sir Eric Willis, had made an allegation in Parliament which was reported in the press simultaneously with Wood’s announcement:

. . . On Monday, 17 October, at the La Causerie [Restaurant] the Commissioner of Police was about to have lunch with a fellow called [George] Walker, who runs an illegal gambling casino in Goulburn Street, but as soon as he saw a person whom he recognized, he rushed out so hurriedly that he left his untouched glass of beer on the table. This indicates why it will take a few weeks to close the casinos. They cannot be closed down overnight. They have to be careful. The casinos have to be given time in which to organize themselves to remove equipment and to get it underground.

The political damage to the Government’s prestige was obvious and, speaking outside the Parliament, Premier Wran announced that the casinos would be closed immediately. Commissioner Wood admitted to meeting George Walker and repeated his opinion that it was ‘inhuman’ to turn 300 people out of work at Christmas. The following day Commissioner Wood told the press that Mr Wran had given him a ‘verbal assurance’ that the casinos would not close until February. As the debate continued, the Police 21 Division raided the Forbes Club in East Sydney at 2.30 a.m., 5 December, beginning the process of closing down the casinos.

Although the casinos did not disappear, the loss of political protection and the threat of police raids forced most to discard their immovable assets and return to the style of the baccarat schools. In short, they were forced to return to the more restrained style which had characterized their operations for a quarter century under previous Labor administrations. As Mr Wran himself put it: ‘A casino is one thing and a card game is another’.


from Drug Traffic by Alfred McCoy