Esmeralda’s Barn: The Hijacked Casino (Part 1)

1960-1963

Twins, Reginald “Reggie” and Ronald “Ronnie” Kray, gained notoriety as powerful and murderous gangsters in London, England in the 1950s and 1960s. During their reign of terror, their involvement in organized crime included protection rackets, drug running, money laundering and even gambling. (The 2015 movie, Legend, which features actor Tom Hardy as both men, depicts their story.)

By 1962, the Krays would own a casino, Esmeralda’s Barn, in the West End.

Typical Shady Activity
The events leading to it began when Reggie, the “more reasonable” of the two — Ronnie was a paranoid schizophrenic frequently off of his requisite medication — was serving a sentence in the prison at Wandsworth.

Ronnie crashed a party to extort Peter Rachman, a West London extortionist himself who was profiting off of charging tenants exorbitant rental rates. Ronnie demanded Rachman pay him £5,000 (about $14,000 then, $114,000 today) immediately or he’d take over Rachman’s Notting Hill territory; Ronnie would have his own heavies force out, violently of course, Rachman’s rent collectors and take their place. Rachman gave Ronnie a check for £1,000 (about $2,800 then, $23,000 today).

When Ronnie went to cash it the next morning, it bounced. He was irate; no one played him like that. With a Luger in hand, he went looking for Rachman but couldn’t find him. So Ronnie did as promised, and his men assaulted Rachman’s thugs.

The Olive Branch
Knowing his life was at stake, Rachman devised a way to make it up to Ronnie. He got word to him about a legitimately owned casino in the West End that just might be of interest. It was Esmeralda’s Barn, on the Knightsbridge end of Wilton Place. It’d begun in the 1950s as a nightclub but when the United Kingdom legalized gambling in 1960 via the Betting and Gaming Act, the owner, Stefan de Faye, had turned it into a casino.

Usurping the Business
On the veiled threat they’d might kill or maim de Faye if he refused, the Krays, through their soon-to-be full-time advisor Leslie Payne, forced de Faye to sell Esmeralda’s to them for £1,000.

De Faye and the other directors could maintain their positions and profits but essentially were stripped of any control. In reality, they wouldn’t get a penny, and in a short time, the Krays would oust those men entirely from the business.

(The twins’ older brother, Charlie Kray, who also was involved in their underhanded dealings, later said it was he who negotiated the purchase of Esmeralda’s, for £2,000 [about $5,700 then, $46,000 today], and Rachman never was involved.)

Start of New Venture
After the one-sided deal was done, the Krays (Reggie then was out of prison on bail) with Payne, visited their new casino, in 1961, for the first time.

“It was an interesting evening; interesting for the twins, who gazed with mounting avarice and awe as the earliest of the night’s gamblers seated themselves at the rich baize of the tables and the chips began travelling; interesting for the club’s manager and principal shareholder who was waiting to meet the night’s big punters, ignorant of what had happened; most interesting of all for Leslie Payne, who held the company minutes of Hotel Organisation Ltd. [de Faye’s company] in his ever-present briefcase, and was waiting for a good moment to tell the manager and his co-directors that they had some new and unexpected partners,” wrote John Pearson in From The Profession of Violence: The Rise and Fall of the Kray Twins.

The casino boomed, thanks to the savvy manager, Laurie O’Leary, his rich friends and the way he ran the operation. The Krays gave O’Leary 50 percent of the profits and kept the rest.

This successful arrangement, however, wouldn’t last.

(As a bonus post, we’ll release Part 2 this Friday.)

Sources