Green’s Dictionary of Slang

1. clothes that are being worn, underwear; thus drop one’s laundry, to undress.

1943		R. Llewellyn None But the Lonely Heart 84: He knew them brides must have been showing a bit of laundry.
1953		R. Chandler Long Good-Bye 7: Is the gentleman in the soiled laundry a real close friend of yours.
1967		Reynolds & McClure Freewheelin Frank 117: She asked if she could turn the light off and I bellered out, ‘NO! DROP YOUR LAUNDRY!’.
1970		Meyer & Ebert Beyond Valley of the Dolls [film script] Why don’t you lose your laundry, Porter?

2. (gay) the bulge of the genitals under trousers.

1964		Lavender Lex. n.p.: laundry:– The bulge at the crotch. A mocking term applied to one who is showing a large bulge, i.e., ‘He brought his laundry with him.’.
1966		Trimble 5000 Adult Sex Words and Phrases 119: laundry (Sl.) The bulge of the male Genitalia when tightly clothed. Used by Homosexual males in the sense — ‘Look! He brought his laundry with him!’.

3. women.

1977

J. Olsen Secret of Fire Five 81: Once a month we all go out and chase laundry.