The Freestate of Galveston: An Italian Mobsters Paradise

The era known as the Freestate of Galveston or ‘Galveston’s open era’, was defined by Salvatore ‘Sam’ Maceo’s stranglehold over the Southeast Texas island’s politics, social scene and organized crime.

Maceo was born in Palermo, Sicily (1894), immigrating to Leesville, Louisana in 1901 along with his three brothers Rosario, Vincent and Frank Maceo. 9 years later they moved to Galveston, Texas just ahead of World War 1, where they’d set up a mob empire that reached as far North as Dallas, TX.

Sam and his brother Rosario (aka Rose) started a local barbershop in Galveston, but as prohibition took hold throughout America, they started gifting their loyal customers with smuggled wine.

As their customers returned for more wine, the two enterprising brothers jumped headfirst into the bootlegging business which would serve as the catalyst of their 30 year reign leading organized crime in Texas.

The brother’s criminal activities and ties to Italy caught the attention of local mob boss Ollie Quinn and his associate Dutch Voight who lead the Beach Gang.

At the time, Quinn’s and Voight’s organizations controlled the bulk of criminal activity in Galveston throughout the ’20s. (source)

Ollie’s specialty was gambling, his casino, the Deluxe Club was a fixture in Galveston’s vice economy and his other business, the Modern Vending Company, supplied gambling machines to other local casinos.

Although a bonafide mob boss, his Southern hospitality welcomed fair competition, mainly because he supplied them with gambling machines.

Sharing similar motives, Quinn aligned with Sam and together they opened a speakeasy where bootlegging, prostitution and gambling fed the vices of local residents.

With money flowing in hand over fist, Sam was eventually joined by his other brothers and together with Ollie, they opened the Hollywood Dinner Club. With Sam as the face of the club, it quickly became the Gulf Coast’s most opulent nightlife destination of that time.

In the mid-1920’s they also launched the instantly popular Maceo’s Grotto (21st Street & Seawall Blvd) which was a club and casino, deepening their power over the region. Maceo’s Grotto was previously known as Chop Suey and later known as the Balinese Room, after Maceo’s Grotto was shut down and the property damaged by the Freeport Hurricane in 1932. (source)

Ollie showed Sam how to navigate the political landscape in the region, introducing him to key players in local politics that needed to be bought off to ensure unencumbered illegal operations.

Sam was so adept at dealing with politicians and criminals alike, he became known as the ‘Velvet Glove’.

The relationship he fostered through Ollie’s connections proved vital in the long run as Ollie was eventually arrested and incarcerated, leaving Sam in sole control over the region’s criminal operations.

The 1930’s were the peak of Sam’s power, underpinned by a broad swath of cash cows including casinos, bookmaking parlors and speakeasies. (source) In Ollie’s absence, the rapid expansion of Sam’s power over corrupt politics, bootlegging, narcotics and gambling entrenched Sam in the Texas underworld.

The three brothers, lead by Sam ultimately presided over the dominant criminal empire they built in Texas.

While Sam was the boss, his brother Rose took over the criminal side of their empire. Sam’s focus was on the legit side of the business such as his company Gulf Oil Properties, Dickinson Equipment and Gulf Coast Properties. Together, their unfettered operations came to be known as the Freestate of Galveston.

During this time, the moral compass guiding the rest of Texas and the United States was inoperable in Galveston, specifically Kemah and Dickinson.

The who’s who of American society descended upon the Southern resort town to enjoy the civil liberties only a corrupt town can provide. Prostitution, drugs, gambling and any other vice one desired was readily available in abundance as long as you had the means to enjoy them.

At the center of it all was Sam and Rose, who happily supplied the joys that were otherwise sparsely available in such abundance elsewhere in the United States at the time.

Al Capone and other bootleggers of the Roaring ’20s were associates of Sam’s, but were never allowed to operate in Galveston. From Dallas to Galveston, Sam and his brother owned and operated freely within their territories.

The Maceo brother’s luck turned for the worse towards the end of the ’30’s, with some speculating the prominent Moody family orchestrating their demise from behind the scenes.

In 1937 Sam was arrested on federal narcotic charges that engulfed him in a legal battle lasting 5 years. While he was acquitted, the fall of the brothers was well underway.

During the late 30’s the once national hotspot, The Hollywood Club was shut down as it became increasingly difficult for local clubs to attract entertainers of interest.

In the early ’30s gambling was legalized in Nevada and as the desert town’s influence grew, driven by the likes of New York mobster Bugsy Seigel, Gulf Coast resorts simply could no longer compete with the glitz and glamour now synonymous with Sin City.

Seeing the writing on the wall, Maceo divested out of Galveston, selling his remaining properties to the Fertitta family. Free of the money pit that Galveston had become, Maceo set his sites on Nevada’s burgeoning gambling scene.

Through a company called ANICO, the Maceo’s and the Moody family funded the Desert Inn casino, the most elaborate casino of its time, lead by Moe Dalitz.

Shortly after opening the Desert Inn, Sam died of cancer at the age of 51. Following his death, Galveston’s gambling industry was shut down, ending the Freestate of Galveston till this day.

In our next post, we will explore the Fertitta family’s ties to the Maceo’s and how their empire is partly built on the backbone of three immigrants from Palermo who took over the Texas underworld in a matter of a few years.