Business Lessons From A Gambling Hideout

“They’d call us gypsies, tramps, and thieves;
But every night all the men would come around;
And lay their money down.”
– Cher

I learned about outsourcing and other business techniques in the 1970s, during my teenage years.

I worked at a dry cleaning business that had no dry cleaning equipment. It had two clothing racks, a counter and a cash register; nothing else. There was no drive-thru window and no parking lot.

The business was located in the roughest section of Newport, Ky., which was one of the most economically depressed cities in America.

My father said that “gypsies, tramps, and thieves” was an accurate description of the neighborhood.

The shop’s location did not cater to an upscale clientele. Living conditions were bad and the crime rate was high.

I witnessed armed robberies, streetwalkers, numerous fist fights and a car jacking.

I watched a woman run over her soon-to-be-ex-husband with a car.

There was a diverse mixture of cultures and personalities in that neighborhood. None of them seem concerned about owning neatly pressed, dry-cleaned clothes. They bore no resemblance to the people who lived in the suburb that I lived in.

There was one factor that made the dry cleaners a smart business decision. In its back room there was a bookmaking operation and an ongoing card game.

The back room had far more traffic than the dry cleaners ever did.

I was the “manager” of the dry-cleaning section. Since I was the only employee, there was not a lot to manage. However, the experience at the dry cleaners was a better lesson in business than studying for an MBA.

I learned business techniques that were far ahead of their time:

Outsourcing. The dry cleaning business was the ultimate outsourcing operation. It seemed that two out of three people a week would wander in actually wanting their clothes dry cleaned. I would take their clothes to a real dry cleaner and have them cleaned. Since we charged a markup for the service, prices were outrageously high and we had few repeat customers.

We did the marketing and someone else did the work. It is a model that many businesses now follow.

Locating in a business-friendly location. In Joe Nocera’s book, “A Piece of the Action,” he wrote about credit card companies locating in South Dakota because that state looked favorably upon the credit card business at a time when other states were heavily regulating it.

Although gambling and bookmaking was against the law, Newport was a favorable business environment for the gambling operation.

With far more serious crime taking place, enforcing gambling laws was not a high priority for the neighborhood’s law enforcement community. The dry cleaners provided a legitimate business cover.

Long hours, low wages. I worked in the dry cleaners 72 hours a week during the summer and over 40 a week during the school year. I had no benefits, pension, or paid vacations, and they “forgot” to pay me overtime.

Many businesses use this “long hours, low wages, no benefits model” today.

Everyone involved in the dry cleaners is now dead. Their lifestyles as “gypsies, tramps, and thieves” cut into any chance they had to live to an old age.

One thing you can say about them is that they were good businessmen. None of them were well-educated, but every night when the men would come around, they had plenty of money to lay down.

Don McNay, who lives in Richmond, Ky., is an award-winning financial columnist for Huffington Post Contributor. You can learn more about him at