One groundbreaking aspect of the Wood Royal Commission into police corruption in New South Wales was to recognize the importance of the historical dimension of corruption. The historical consensus is that systemic police corruption emerged in NSW only after the Second World War but, as Wood acknowledged, there has been little detailed research into earlier periods. One window into policing in the 1930s is provided by the Markell Royal Commission, which investigated allegations of police misconduct in relation to illegal bookmaking in 1936. This article explores the evidence gathered by Markell, and argues that his inquiry uncovered a system of entrenched police corruption at a level of complexity previously thought not to have appeared for another decade. It is argued that poor management contributed to the growth of systemic corruption from the early 1930s, and that a defensive and negative reaction to the exposure of this corruption caused an historic opportunity for reform to be lost.