How Jayel became the proprietor of the Wanton Wench is more or less a hand-waved affair by the local officials. The facts known by 'upstanding' folk are that a fresh-faced young girl by the name of Jayel came into Gatewatch, disappeared, and reappeared the aged and stern woman she is today. The facts known by the night watch are a marked decrease in drug trafficking and battered women appearing on the streets. The fact known by Jayel is that she killed a man with her bare hands, and has never looked back.
You've probebly heard of the real Thomas Hopkins, Witchfinder-General, who hunted down and hanged suspected "witches". What if there was a world/realm where magic was normal, and it was the non-witches and non-wizards who were hunted down and hanged as inferior beings?