The Gangsters of Hot Springs

They came to get into and out of hot water 

Words by Rebecca Deurlein

Before “Scarface,” “The Godfather,” and “The Cotton Club” immortalized notorious gangsters, real-life mobsters walked the streets. But do you know which streets they preferred?

Surprisingly, gunmen, bandits, and bootleggers alike found their haven in—of all places—Hot Springs, Arkansas. 

Historically known for its free-flowing thermal water and bathhouses, Hot Springs was also a hotbed for gambling that went unchecked for decades and drew the kings of crime to “Spa City.” And why not? A crook could soak in the healing waters during the day and have a stiff, albeit illegal, drink by night, all with a doctor’s prescription.  

Robert Raines, Executive Director of The Gangster Museum of America, has made it his business to immortalize these men, both as the crooks we all know them to be and as the gentlemen Hot Springs loved. The museum is located right on the main street of Hot Springs in no other than a former bordello, and the tales it tells illustrate the many facets of gangster life. 

Raines explains how the people of Hot Springs felt about the gangster presence in their town. “These guys—and they were all guys back in those days—had two lives. They were gangsters, but they were also family men. I’ve interviewed their kids and grandkids who never saw the mean side portrayed in all the movies. Even Frank Nitti, the famous mobster from Chicago and enforcer for Capone’s outfit, adopted a child in Hot Springs and was a loving, doting father.” 

Hot Springs’ history with the underworld dates back to the mid- to late-1800s. Begun with popular casino-type gambling, it grew to become the largest illegal gambling operation in the country and the inspiration for what would later become Las Vegas. In Hot Springs’ infant gambling years, mobsters moved surreptitiously from one casino and watering hole to another, traveling by underground tunnel to go unseen. Over the years, that level of stealth was no longer required.

It became blatantly obvious that authorities such as police officers and elected officials were not concerned about the underhanded dealings, in large part because they were profiting greatly from bribes and enjoying their own gambling. Thus, they partnered with mob kingpins, including Frank Flynn, one of the city’s earliest “entrepreneurs,” who owned or controlled seven gambling houses. Known as “Boss Gambler,” Flynn reigned over his enterprise with the help of the police force, and between 1927 and 1967, Hot Springs operated the largest illegal gambling racket in the country. 

When Leo McLaughlin was elected mayor of Hot Springs in 1927, the city’s reputation grew further. McLaughlin had made a campaign promise to allow gambling, and as a tourist attraction, it worked, bringing tons of people and money to Hot Springs. As for the criminals, they quickly surmised that they could walk around freely greeting people on the streets, and no one would mind. Outlaws wanting to evade arrest and move about with impunity had found a sanctuary. For the next 20 years, some of the most famous mobsters, including Owen “Owney” Madden, Charles “Lucky” Luciano, and Al Capone conducted business and tipped their hats to police officers as they lifted moonshine and stacks of cash from the trunks of their cars. Even Bonnie and Clyde found a hideout in Hot Springs.

One of the most notorious gangsters was Owney “The Killer” Madden, referred to as “The English Godfather” because he was originally from Leeds, England. A robber and murderer who had based his mob activity out of New York City, he had started The Cotton Club and made millions, even at that time. Through his club, he worked and partied with the likes of Cab Calloway, Duke Ellington, and Louis Armstrong, and was a fight promoter for Rocky Marciano. But most importantly, he was a mentor to the biggest crime bosses in the nation, all of whom came to him for advice. So, when Madden arrived in Hot Springs in 1935 seeking a slower lifestyle than the one he was accustomed to in New York City, a wave of crime bosses followed. Ironically, Madden is the only major criminal never fictionalized in any movie, yet he was arguably the most respected. 

Madden was highly philanthropic when it came to supporting his Hot Springs community. He started the largest Boys Club in Arkansas and bailed out two failing banks, and according to local lore, everyone loved him. But when Mae West was asked what she thought of him, she cryptically responded, “Mmmm. Sweet. Oh so vicious.” She was perhaps the only one who acknowledged what everyone else wanted to ignore—that the kind, polite, generous Madden was also a cold-blooded killer.  

And he was friends with other killers as well. In 1963, Madden asked a lady who owned a local salon to open up on Sunday and give a friend of his a manicure and a haircut. She wasn’t given a name, but when the mysterious man—one she described as “short and greasy”—arrived, he said, “Make me look good. I’m gonna be on TV next week.” The next week, that man shot Lee Harvey Oswald. The FBI had been tracking Jack Ruby in Hot Springs, but he never did anything to draw suspicion. A week later, he took justice into his own hands by murdering Oswald on live TV. 

Joining their ranks was Al Capone, who arrived in Hot Springs hoping that the thermal waters and bathhouse treatments would cure his syphilis. He soon discovered that his Chicago business could grow exponentially with the addition of some moonshine distribution out of Hot Springs. With Joe Kennedy (famous father of JFK and unconfirmed but strongly suspected bootlegger) on board, he needed a means of transportation to increase distribution. Staring at a case of Mountain Valley Spring Water, he came up with the idea to turn the labels upside down and attach them to moonshine bottles. In this way, he was able to ship mass quantities of what looked like water bottles on railroad cars and easily identify the moonshine upon arrival.

Capone and his bodyguards frequented Hot Springs and rented out entire floors at the Majestic Hotel.  Capone then made the cover of Time magazine and enjoyed heightened celebrity status, so when he was finally arrested, he had the power to request his term be served in Eastern State Penitentiary. There, he had comparatively comfortable accommodations and his own bodyguards, and he continued to run his operations from prison. 

By the late 1960s, officials could no longer ignore what was right under their noses, and a federal crackdown of what the Federal Government called “the site of the largest illegal gambling operation in the U.S.” led to the demise of mob activity in Hot Springs. 

The Gangster Museum shares all of this and much more, with exhibits dedicated to Madden, Capone, Maxine's Whore House, bootlegging, the state police bust that ended illegal gambling in Hot Springs, and even John Dillinger’s haunted death mask. Guided tours and videos bring the gangster era to life and illustrate just how difficult it was to discern the violent criminal from the man next door.

As Raines says with a chuckle, “The gangsters had their family face on in Hot Springs. They didn’t cause any problems; in fact, having them here calmed down the hillbillies.”