Green’s Dictionary of Slang

1. any form of illicit decoy; esp. a confederate of those running a game of three-card monte n. or thimble-rig n. [? fig. use of SE button, something small and worthless].

1742–4		R. North Lives of the Norths (1826) I 88: It was not amiss to have a button in the room.
1859		Hotten Dict. of Modern Sl. etc. 15: button a decoy, sham purchaser, &c. At any mock or sham auction seedy specimens may be seen.
1861		(con. 1840s–50s) H. Mayhew London Labour and London Poor III 111/2: One of the confederates, who is called ‘a button,’ lifts up one of the thimbles with a pea under it.
1865		Leaves from Diary of Celebrated Burglar 5/1: Here and there would be an opening for a few ‘buttons’ in a ‘chat-pitching mob’.
1876		Besant & Rice Son of a Vulcan I 221: This tribe worked in pairs, one being the ‘Button’, that is, the confederate who egged on the flats.
1880		W. Hooe Sharping London 34: button, a confederate or decoy in gambling.

2. (US Und.) a lookout [? button man under button n.⁴ ].

1992		Bentley & Corbett Prison Sl. 40: Button A lookout. An inmate keeping watch for prison guards or officials while an illegal activity is taking place.
2000		(con. 1940s–60s) Décharné Straight from the Fridge Dad.