Arthur Webb's The Clean Sweep (Regnery, $4.95) is a remarkable story of a business with a split personality. Perhaps all corporations are slightly schizoid—their public identity contrasting with a private, hidden side, but in the case of the Irish Hospitals Sweepstake the duality is built into its very structure. It is a successful, efficient, highly organized charitable enterprise dealing in a commodity which, in most of its sales area, is against the law.
This is an article from the July 6, 1970 issue
The Irish Sweepstake began with the work of Richard Duggan, a quiet, mannerly, well-dressed Dubliner who shocked his family at the age of 19 by going to work with a bookmaker. Many years later, in 1918, a group of Duggan's racing friends were going to sail to England on the steamship Leinster to watch the running of the Cambridgeshire, and Duggan was at the dock to wish them luck. The Leinster was thereupon torpedoed by a German sub, with the loss of 501 of the 771 aboard. In sympathy Duggan organized a lottery for the relief of the families of the drowned. The returns were so great that after the war he promoted another sweepstake for the benefit of Mater Misericordiae Hospital in Dublin, offering ¬£10,000 in prize money and ¬£10,000 to the hospital. Once again the promotion was a huge success.
It was not until Duggan teamed up with one Joseph McGrath, however, that he was able to get the Hospitals Sweepstake on a really solid footing. McGrath was a former accountant who had become a leader of the Irish Republican Army. McGrath and Duggan were joined by Spencer Freeman, a Welsh engineer who previously specialized in taking squeaks and rattles out of automobiles for the Chalmers Motor Company of Detroit. Their first sweepstake was pegged to the running of the 1930 November Handicap at Manchester, England. Tickets were sold in books of 12 each—10 tickets to be sold for ¬£5, with two free tickets to the agent selling the book.
A return of perhaps ¬£40,000 was expected—but more than ¬£600,000 worth of tickets were sold. The prize money came to ¬£417,586, of which the benefiting hospitals got ¬£131,798. The promoters got 7% (later reduced to 2%,), amounting to ¬£46,085. There were 79 horses entered in that first race, and a man named Fred Ward, employed by the Ministry of Agriculture in Northern Ireland, had the ticket on the favorite. Glorious Devon. If Glorious Devon were to win, Ward stood to get ¬£204,764. He sold part of his ticket to two Belfast men. The big London bookmakers, Ladbroke's, perceived the advantage of the sweepstake in layoff betting and bought half of the original investment for ¬£3,300. Glorious Devon won and Ward pocketed ¬£35,000, in addition to his previous sales, while Ladbroke's got a return of ¬£100,000 for their ¬£3,300 investment.
The second sweep was pegged to the running of the 1931 Grand National. Sales went so fast that the partners hired 800 girls to work in temporary huts in the garden around their old office, and 3½ million tickets were sold. The ticket on Grakle, the favorite, was drawn by Emilio Scala, a shrewd and good-natured Italian who owned a small restaurant in London. Scala sold approximately three-fourths of it to Arthur Binder, a London bookmaker, for ¬£10,500 and kept the rest. Grakle won in the record time of 9:32.8, Scala banked ¬£99,180 and Binder collected ¬£255,543.
The ticket on the second horse, Gregalach, was owned by a workman in the Buffalo plant of Fisher Bodies. He had sold shares of it to his wife, his brother and his two brothers-in-law. Gregalach paid them $886,630, but an old law that gambling winnings could be seized by the city of Buffalo sent the winners fleeing to Canada. It did them little good. The U.S. Government took $213,000. The winner's wife divorced him. His brother's wife was committed to an asylum and one of his wife's brothers was arrested on a morals charge. Released on bail, he was found dead in the woods near Buffalo the next day.
Duggan himself died at the age of 56 in 1935, a venerated pioneer, but the sweep he organized went on and on. By 1959 its annual income was more than ¬£16 million, and four of every five tickets were sold in the United States. By 1966 Ireland's 400 hospitals, clinics and medical centers were collecting about ¬£3 million per year from it. McGrath's death in 1966 left only Spencer Freeman of the original partners, and Freeman concentrated on making the sweep an even more efficient organization than it was in the past, a dignified, modestly sumptuous business with an air like that of a well-run bank.
And yet the Irish Hospitals Sweepstake has always been, in a sense, an underground operation. Even the author of this book insists that he does not know how the tickets are sold. Occasionally British and American authorities have moved in on the sellers, but never with any notable success. Tickets have been shipped in coffins, in egg crates, in heavy machinery, in toys, in laundry and in suitcases apparently abandoned in stations. They have been unloaded by the cargo netful from steamers, and packed in the deicing tanks of airliners. The operation is possible, of course, only because of a general lack of interest in enforcing any law against it. Even so, the quiet efficiency of the Irish Sweepstake operation makes all previous smuggling stories seem trivial.