The van driver put his hands in the air and whistled innocently. The customs officer flung him to one side, leapt into the van and heaved one of the laundry bags onto the dockside. Another officer slit it open. Sure enough, the sack was stuffed with thousands upon thousands of Irish Sweepstake counterfoils. As the smugglers were rounded up, the customs officer must have mused upon the futility of his task. For every book of tickets that his team busted, a dozen more were still slipping through the system undetected. Those pesky Irish. Would they ever give up?
The Irish Hospitals Sweepstake ran from 1930 to 1987 and raised the equivalent of €170 million for the Irish health service, creating a network of over 400 hospitals, clinics and medical centres across Ireland. Its’ rather more covert aim was to provide its three founding directors with an income that spiralled them into the upper echelons of Europe’s wealthy elite. And if that required a little bit of systematic insider dealing from time to time, then so be it.
There are also increasingly sure-footed suggestion that profits from the Sweep, a lottery to which millions of people from Ireland, the USA and the British Isles subscribed, were being channelled directly into the coffers of the Irish Republican Army at a time when the IRA was forging major links with Nazi Germany.
Small wonder that the Reader's Digest declared the Sweep ‘the greatest bleeding heart racket in the world’. This is a story that needs to be told and told it is in Dr. Marie Coleman’s fascinating and brilliantly researched new book, The Irish Sweep.
The Sweep was the brainchild of Richard Duggan, a quiet, well-dressed Dublin bookmaker who organized a lottery to raise money for the families of some racing friends of his who were killed when a German U-boat sank the RMS Leinster in the Irish Sea during the First World War.[i]
Impressed by the returns, Duggan promoted a second sweepstake in 1922 for the benefit of Dublin’s Mater Hospital. Again it proved a hit with the masses. Evidently if you dressed up a gamble as supporting a worthy cause, you stood to make serious money.[ii]
In 1930, with the world reeling from the Wall Street Crash, Duggan joined forces with former Minister of Labour Joseph McGrath and Welsh publicity guru Captain Spencer Freeman to form the Irish Hospitals Sweepstake.[iii] The partnership would revolutionize Ireland’s health infrastructure, and make the triumvirate extremely wealthy into the bargain. .[iv]
Duggan, McGrath and Freeman had a clear understanding that if their business was to succeed, they needed to expand beyond Ireland’s small population, and sell tickets in the UK and USA. The fact that lotteries like the Sweep were outlawed in both of those jurisdictions did not deter them.
The Sweep’s inaugural race meeting was the Manchester Handicap in November 1930. Supervised by General Eoin O’Duffy, the Garda’s chief commissioner, two blind boys from Drumcondra plucked the winning draws from a barrel at The Mansion House. The Sweep publicity boosted the event so much that the race fielded the largest number of horses in living memory. Gordon Richards rode the Glorious Devon to victory over his thirty rivals. Amongst the crowd, the biggest smile was to be found on Fred Ward, a civil servant from Northern Ireland who had just become the Sweep’s first big winner. The company raked in over £415,000 in ticket sales. After the prize money was deducted, the benefiting hospitals got £131,798 and the promoters pocketed a cool £46,085. [v]
The promoters rolled straight into a second sweep for the Grand National four months later. Tickets sold so fast they had to recruit 800 girls to work in temporary huts in the garden around their temporary headquarters on Earslfort Terrace. By the time the horses set forth at Aintree, over three million ten-shilling tickets had been sold, half a million of those in the USA. Tickets were sold in pubs, picture houses, banks and bookies across Ireland, the UK and the USA. They came in books of 12 — ten tickets for £5. [vi]
By the close of 1932, the Sweep had made its directors millionaires and set the ball in motion for the development of Irish hospitals. The 1932 Derby alone made gross proceeds of nearly £4.2 million. Some 76% of the Derby money came from England and, to a lesser extent, Scotland and Wales Britain.[vii] In fact, the very success of the Irish Sweepstake was that it was so hugely popular in Britain.
Britain’s cash-strapped government was appalled to see so much Sterling leave the kingdom in a time of economic depression. Britain’s Protestant work ethic was particularly horrified by the unprecedented promotion of this ‘orgy of gambling’, albeit in the name of hospitals.[viii] Lotteries, sweepstakes included, had been outlawed in Britain since 1823.[ix] And, as if that wasn’t bad enough, all this money was flowing into an Irish Free State which, since February 1932, was ruled by Britain’s arch-nemesis, Eamon de Valera.[x]
Not surprisingly, the Fianna Fail government had few objections to the massive cash injection the Sweep gave the Irish health system. Ireland was one of Europe’s poorest countries. The existing hospitals were shoddy, the country was riddled with tuberculosis and the public finances were stone-broke.[xi]
Freeman brilliantly orchestrated the Sweep’s publicity. For every Sweepstake draw, he organized a massive parade through Dublin city centre, with all the tickets carried in a series of ornate boxes by beautiful, hand-waving nurses, and the occasional elephant thrown in for good measure. The draw itself was conducted with theatrical gravitas, wonderfully choreographed from the roll of the drum to the selection of the winning draws. The company mascot Big Tom, a giant black cat, went on a tour of Britain in aid of local hospitals. The Sweep also sponsored music shows on Irish radio, a ruby league challenge cup in England and an airplane, Irish Swoop, in the 1934 London to Melbourne air race.
In November 1934, Westminster passed the Betting and Lotteries Act, specifically designed to halt the sale of Irish Sweepstake tickets in Britain. The law also clamped down on all publicity for the Sweep, banning broadsheets from the publishing the names of prize-winners and stripping references from movies and magazines.[xii]
McGrath and Freeman did their best to ignore the British restrictions. They actively encouraged smuggling, shipping tickets across the Irish Sea in coffins, egg crates, toys, laundry sacks, you name it. They set up a radio station and broadcast the names of all prize-winners. (Unwilling to torment the British any further, the Irish government would not allow the radio station to move any further west than Athlone and radio reception rarely reached across the Irish Sea.[xiii] )
Nonetheless, the new law had what the Daily Mail described as ‘a salutary effect’ on the Sweep. British contributions – which averaged 65% before the new laws - tumbled to 40% in 1935 and continued to decline to 13% by 1939.
Faced with such a massive market loss in the UK, the Sweep team began to focus on the US, tapping into the emotional vein that the Irish diaspora inevitably felt for the home sod, and tempting all those recession-weary Americans to go ahead and take a chance. In 1930, the US accounted for 5% of sales. By 1939, over 60% of the sales were in the US and, by 1959, four out of every five Sweepstake tickets were sold in the US.
Sweepstakes were also illegal in the US but, as Sports Illustrated opined, ‘the quiet efficiency of the Irish Sweepstake operation’ ran a racket that made ‘all previous smuggling stories seem trivial.’ Likewise in Canada, the Irish Sweep was considered the largest smuggling ring outside of the Mafia.[xiv]
One of the most intriguing aspects of Dr. Coleman’s book concentrates on the Sweeps’ extremely intimate links with the IRA. Joseph McGrath was a member of the Irish Republican Brotherhood who had fought in the Easter Rising, served his time in Wormwood Scrubbs and masterminded several bank robberies during the War of Independence.[xv] An elected Sin Féin TD, he succeeded Countess Markiewicz as Minister of Labour in 1922, but resigned in objection to the sidelining of the Republic’s goals of a unified Ireland.
The Sweep’s two main ticket agents in the USA were Joseph McGarrity and Connie Neenan, both leading members of the IRA. Born in Co. Tyrone, McGarrity was a personal friend of both McGrath and de Valera. He headed up the Philadelphia district of Clan-na-Gael and was one of the biggest fund-raisers for the Irish Volunteers during the War of Independence. McGarrity’s business empire was facing financial ruin when the Sweepstake agency came his way in 1933 and set him straight. Over £250,000 passed into his personal account over the next five years, almost all profits accrued from selling sweep tickets. In his diary, McGarrity states that he used this same money to buy guns for the IRA. One of his salesmen was Séan Russell. In 1940, McGarrity threw in his lot with Russell, helping with his quest for financial support from Nazi Germany and advocating the deeply divisive campaign to bomb Britain.[xvi]
While Co. Cork-born Connie Neenan distanced himself from McGarrity’s pro-German stance, he was nonetheless head of the IRA in the USA during the 1930s, and had the monopoly on Sweepstake ticket sales in New York, Chicago and California. As Dr Coleman notes, British intelligence were fairly certain that the same channels were being used to send both sweepstake remittances and IRA funds back to Ireland from the USA. The US agents had friends in high places, possibly even Jim Farley, who served as the US Postmaster General for most of the 1930s.
MI5 files released in September 2009 also reveal serious concerns that the Sweeps’ UK profits were being channeled directly into the IRA through Dr Moira Connolly, a leading Republican and daughter of 1916 rebel leader James Connolly, who was one of the unofficial sales agents in London.
When foreign ships came in to Dublin’s Docklands during the 1930s, the residents of Westland Row and City Quay would gather along the waterfront and purchase goods from the luckless crews, passing off void Sweepstake tickets as Irish currency. Swindling was endemic to the Sweepstake from the highest echelons. At the heart of the American operation, there was insider dealing on a massive scale. Sidney Freeman, the Captain’s brother, set up an office in New York’s Ritz Carlton Hotel. As the horses were drawn in Dublin, the results were telegrammed to him in a secret code. He was then able to make contact with the lucky American winners before the results were announced, and offer to purchase a share in their tickets. It is unknown how much money was made from this illicit goldmine but, for instance, in 1936 he had a half share in eight tickets with the Grand National winner’s name on it and that was worth £240,000. The directors of the Sweep received a share from these profits.
Revived after the war, the Sweep was still a massive concern in 1951 when Arctic Prince, a horse both bred and owned by McGrath, romped home at 28-1 to win the Epsom Derby. The colt was the first Irish horse to win the race in 43 years. McGrath personally collected the prize money from Queen Elizabeth. [xvii] By 1960, alternative gambling options like the pools and casinos were taking over but, nonetheless, the Sweep still employed 5,000 people and its directors owned numerous companies such as Waterford Glass and the Irish Glass Bottle Company.[xviii]
There was a public outcry when it emerged in the 1970s that the Sweepstake directors had creamed off close to 100 million pounds between them. The McGrath family were said to be making £8,000 a day. But nobody could touch them. [xix] The Sweep had never been anything but a profit-seeking operation. A lot of the scandal centred on the State’s apparent sanction of this illicit operation, not least when it transpired that monies raised from the Sweep had also helped bankroll campaign expenses for a generation of politicians from all three major parties. Des O’Malley, then Minister of Justice, lifted the cauldron lid and was shocked by what he found within. But the government was loath to close the operation down and put 800 people out of work. The Sweep limped on until March 1987 when, following the appointment of An Post to run the new State-run Lotto, it went into voluntary liquidation. As Dr. Coleman says, if the Sweep had continued for any longer, it would probably be the subject of another tribunal in Dublin Castle[xx]
Through a company called Avenue Investments, the Duggan, Freeman and McGrath families continued to prosper. The biggest earner on their considerable commercial portfolio was Waterford Glass, the largest producer of high-quality crystal in the world by 1977. However, as the grandchildren of the three founders came of age and sought their share of the accumulated wealth, the empire began to crack. By 1984, the fortune was all but destroyed by a combination of bad timing, bad investments and bad luck. Their saving grace was a loophole in Irish tax laws which enabled them to keep their capital gains tax payments to a minimum.
Dr Coleman maintains that the Sweep ‘transformed the Irish hospital system during the 1930s’. Although some of the bigger institutions initially resisted joining, it quickly became apparent that the Sweep dividends would be an enormous benefit to any hospital. Within the first year, the National Maternity Hospital was able to purchase three buildings on Holles Street and double the number of beds on offer. That same year, the Meath received a grant of £150,000 for repairs and equipment, while the Coombe secured £67,000. By the end of the 1930s, most counties in Ireland had a brand new hospital, paid for to a large extent by the Sweep. By the 1950s, Irish hospitals were the envy of the world.[xxi] It also helped Dr Noel Browne’s crusade to eradicate tuberculosis. At another level, the creation of so many jobs kept a lot of people fed and watered during a very lean period in Irish history.
However, as Dr Coleman says, the Sweep was ‘one of the greatest missed opportunities in the history of independent Ireland.’ If the State had accepted moral responsibility for the operation, and trimmed the directors’ profits, the Irish Hospitals Sweep could have done a hell of a lot more for Ireland’s hospital infrastructure.
The Irish Sweep by Marie Coleman is published by University College Dublin Press (2009).
With thanks to Marie Coleman, Regina Lavelle, Leslie Ann Horgan and Michael Purcell.
[i] The passenger ship RMS Leinster was sunk by a German U-boat in 1917. Amongst the 501 people killed by the deadly torpedo were a number of Duggan’s friends who had been bound for the races at Newmarket.
[ii] The entire ethos of gambling had gathered enormous momentum across the English-speaking world since the end of the war. In Britain, for instance, football pools were introduced in 1926 and greyhound racing with electric rabbits the following year. People clearly loved to punt. There was also a mushrooming of race meetings, tote clubs and bingo halls. Greyhound racing was claimed by some to ‘have been introduced primarily to exploit the gambling spirit’; the number of greyhound tracks that provided betting facilities increased from one in 1926 to 226 in 1932.
[iii] Born in Wales, Freeman had spent his twenties removing the squeak and rattle from motorcars in Detroit and Pennsylvania before joining the British Army and commanding the mechanical salvage operations in France during the First World War. His brother Sidney was a bookmaker in London.
[iv] It was legalized by the Public Charitable Hospitals (Temporary Provisions) Act, 1930, with the provision that a portion of the proceeds also went to local authority hospitals. As this act expired in 1934, in accordance with its terms, the Public Hospitals Acts were the legislative basis for the scheme thereafter.
[v] The draws were moved to the more permanent fixture at the Royal Dublin Society in about 1940.
[vi] Tickets were snapped up in pubs, picture houses, banks and bookies across Ireland, the UK and the USA. The winning ticket on 1931 Grand National winner Grakle was drawn by Emilio Scala, a popular Italian who owned a small restaurant in London and used the money to buy an ice cream parlour on the North End Road in west Kensington. His son Mim Scala now lives in Co. Carlow and is author of ‘Diary of a Teddy Boy: A Memoir of the Long Sixties’ (Headline, 2001).
[vii] The Daily Express reported that ‘A flood of tickets for the sweep have reached England and Scotland, and can be bought almost anywhere’. Tellingly, almost 57% of 1931’s prize-winners were British. Indeed, throughout the 1930s, two thirds of the winners were British. If those random winners correlate with the randomness of ticket purchase, that means at least two thirds of the money funding Irish hospitals was coming across the Irish Sea from England. Much of this would have been from Irish people born or living in Britain. In 1931 the Irish-born population of England and Wales was 381,081, accounting for 1.4% of the total population, while in Scotland 124,296 Irish-born citizens made up 2.6% of that country’s population. As the depression bit deeper into the USA, so the UK became an increasingly attractive destination for Irish émigrés and, by 1936, over 32,000 Irish were emigrating to Britain every year.
[viii] The Marquess of Londonderry, a hospital governor, stated that it would be disastrous. An interesting religious divide emerged. The Protestants work ethic was appalled that such huge amounts of money could simply be won by chance. The Church of Ireland-run Adelaide Hospital refused to participate in the sweepstakes until financial necessity eventually forced it to do so during the 1960s. The Catholic hierarchy was rather more open to it, so long as the draw and the price were fair, and many priests were actively involved in the sale of tickets as a fund-raising.
[ix] Although lotteries had been outlawed in Great Britain and Ireland in 1823, the Irish administration had turned a blind eye and illegal Irish lotteries flourished in Victorian Britain. The Sacred Heart Home in Drumcondra and the Mater Hospital in Dublin were both part funded by such lotteries. And those institutions included the Archbishop and Lord Mayor of Dublin respectively as their patrons. Before 1930, sweepstake gambling was a common method of fundraising for charities, schools, churches, hospitals, sports clubs, trade unions and numerous other societies and organizations. To the fore in the promotion of these was R.J. Duggan and Father John O’Nolan. It wasn’t just churches and hospitals either. Everybody was at it, circulating lotteries, raffles and sweepstakes into Britain from Ireland, including Hermitage Golf Club, Leinster Cricket Club, Neptune Rowing Club, the St Vincent de Paul, the British Legion, the Irish Clerical Workers trade union.
[x] Britain was already in awe at the growth of dictatorships in mainland Europe when, in February 1932, de Valera won the election. De Valera, the devil himself who would mastermind the Economic War, the Taoiseach who refused to repay any of the land annuities due to Britain, the 1916 veteran who would single-handedly ditch the oath of allegiance to the British crown from the Irish Free State constitution. British Conservatives were horrified to think that Dev was making up for the deficit in trade. But there was more than a touch of irony that Dev’s programme of self-sufficiency was financed by private individuals living in Britain. The British government was also greatly concerned by the mass influx of Irish to Britain, especially in Liverpool and Scotland.
[xi] Political upheaval both at home and abroad during the 1910s, followed by rampant inflation during the First World War greatly reduced the value of the charitable endowments which many Irish hospitals depended on. With the establishment of the Irish Free State, many erstwhile philanthropic Protestants fled the country, simultaneously withdrawing their support from the Protestant-run hospitals. The existing hospitals were mainly Protestant foundations and a lot of those endowments had dried up since the birth of the Free State and the exodus of so much Protestant wealth. Still recovering from the deadly Spanish Flu epidemic of 1919 and rampant, Ireland badly needed hospitals and a medical infrastructure. The number of families who lost members to illnesses such as tuberculosis in those days was enormous. TB was every bit as deadly as heart disease or cancer, while the ‘Spanish Flu’ influenza outbreak of 1918-1919 killed over 50,000 people in Ireland.
[xii] In Metro-Goldwyn-Mayer’s The winning ticket (1934) in which a scene depicting the Irish Sweepstake draw was cut. Picture houses were also deterred from showing the silent documentary Dublin of the welcomes, made on behalf of Irish Hospitals’ Trust Limited, which was quite rightly deemed as an advertisement for the Sweepstake.
[xiii] The Hospitals’ Trust left no stone unturned in their bid to keep things going. They issued a particularly cheeky circular, advising subscribers on the best means of evading detection and promised to pay the fines imposed on anybody convicted of selling tickets. De Valera himself had to put his foot down on that one.
[xiv] According to a French Canadian police officer in Montreal, this involved payments to seamen, longshoremen, railway, postal officials and sometimes customs officers.
[xv] He gave most of the money to the IRA, and kept a little for himself and his fellow-raiders. He served on Michael Collins’s personal staff during the Treaty negotiations in London and was placed in charge of the Criminal Investigation Department on the very day Collins was shot.
[xvi] It is notable that, prior to the Sweepstakes, Joseph McGrath was chief advisor to Siemens-Schuckert, the German contractors responsible for the Ardnacrusha hydro-electric scheme near Limerick.
[xvii] In 1951, the commissioner of the Metropolitan Police, Sir Harold Scott, stated that the 1934 restrictions had failed because it was still ‘not too difficult to get a ticket for the Irish sweep if you want to’.
[xviii] By 1960, many punters were opting for the football pools and premium bonds instead and the Sweeps unofficial monopoly declined. There was also the introduction of off-course betting and the establishment of casinos. Britain might have tried to beat Ireland at its own game, as the Duke of Atholl suggested, but moral considerations hindered this option until 1994 when the state-sponsored National Lottery was introduced.
In 1966, Fortune Magazine described the Sweep as ‘a private company run for profit … its handful of stockholders have used their earnings … to build a group of industrial enterprises that loom quite large in the modest Irish economy’.
[xix] This was particularly the case after Joe MacAnthony’s report of 1973. It emerged that they had legitimately written off huge amounts of money as expenses. Meanwhile, the hospitals were obliged to pay nearly 25% of their share in Stamp Duty to the Revenue Commissioner.
[xx] It was formally abolished by the Public Hospitals (Amendment) Act, 1990. At its finish, there were almost £500,000 in unclaimed prizes and accrued interest. As to the founding fathers, Duggan died in 1935 aged 56, leaving McGrath and Freeman to run the show. Captain Freeman (1892-1982) was placed in charge of mobilizing munitions production in Britain during the Second World War. He was executive director of the Sweepstakes from 1946 to 1973, in which year he was voted Sportsman of the Year by the Irish Racing Writers Association. Captain Freeman died in 1982 aged 89 at his home, Knocklyon House, Templeogue, Co. Dublin. McGrath was as close to a Mafia godfather as Ireland had, universally feared and adored, phenomenally wealthy with a string of successful racehorses and a sizeable mansion in the shape of Cabinteely House, which was donated to the State in 1986. His financial and property assets included the Renault dealership for Ireland which later passed to Bill Cullen. As well as dividends, his salary was 100,000 pounds per year plus generous expenses. In 1973, McAnthony estimated that the McGrath family were increasing their wealth at a rate of £8000 per day, while most of those who had retired after giving 25 years service to Hospitals Trust Ltd. were receiving a pension of less than £4 a week.
[xxi] During the 1930s alone gross income from the sweepstake was £71 million, of which £45 million was allocated in prizes and £13.5 million went to hospital building.
Coleman, Marie, ‘A TERRIBLE DANGER TO THE MORALS OF THE COUNTRY’:1
THE IRISH HOSPITALS’ SWEEPSTAKE IN GREAT BRITAIN, 1930–87. (School of History, Queen’s University Belfast. Received 4 February 2004. Read 18 October 2004. Published 23 September 2005.)
Cantewell, Robert, Illegal, True—but Also Profitable And Respectable. That Is The Irish Sweepstake (Sports Illustrated, July 6th 1970)
MacAnthony, Joe, Where the Sweeps Millions Go - The disturbing secrets of the world's most extraordinary lottery (1973).