Organized crime and gambling of all kinds have gone hand in hand for decades. The most obvious and recognized of course being Las Vegas casinos. How many movies and TV shows have depicted the well-dressed “wise guy”, usually in the most extravagant hotel casino, running the whole thing? The most popular and well known being Francis Ford Coppola and Mario Puzo’s 1972 film, the Godfather. Organized crime is not a fictitious plot to watch on the big screen; it is real and revolves around everyday life more than people probably care to admit.
“Gambling has been outlawed or regulated for decades because of its perceived ability to erode society’s morals” (Lyman, 2015, p. 155). Just as prohibition brought about a large interest with organized crime syndicates, gambling has done the same. Several sources, including the FBI, have documentation of organized crime’s involvement in gambling. While casinos, dog tracks, and horse tracks bring crowds and big money; the syndicates make a bigger profit running the numbers game. There are a few advantages to betting with an illegal numbers banks, such s not having to pay taxes on winnings.
Sports betting has also grown in popularity. Gamblers bet on everything from horse races, fights, basketball, football, baseball, etc…, but it caters mostly to those who already know what they are doing. “There is a widespread public tolerance of sports bookmaking, especially in the areas of the country in which it flourishes (New York, Pennsylvania, California, Florida, Kentucky, and New Jersey, states that allow some kind of wagering on a legal basis and have some legitimate gambling enterprises)” (Lyman, 2015, p. 158). In general, police think the gambling laws are not important enough to truly enforce. Thus sports betting will continue to grow and expand, as depicted in the chart below. “The global International Center for Sport Security reported last year that 80 percent of global sport betting is illegally transacted, and therefore invisible to authorities. It said $140 billion is laundered annually through sport betting. The report urged governments to correct what it called a vulnerability of sport betting to organized crime” (Reuters, 2015, p. 1).
Of course, the mention of gambling brings about a chain of thoughts. Perhaps not everyone thinks the same at first, but there is no denying that Las Vegas, Nevada has the best casinos for the best gambling. “Organized crime has become part of the mystique of gambling but it is without significant influence today. Las Vegas and the Flamingo are part of an historical association with organized crime” (Dunstan, 1997, p. 1). With the signs of the times, modern casino gambling has safeguards to protect against organized crime; however, there is still that association with crime called political corruption. Still casino companies insist that there are no longer any organized crime influences in their businesses because they are: publicly held companies like Hilton and Sheraton; answer to thousands of shareholder and investors; licensed and regulated by that state’s government (Dunstan, 1997, p.1). Regardless of all the reasons, there is still the concern that organized crime is present.
“Gambling used to be what a few unscrupulous people did with the aid of organized crime. But gambling fever now seems to affect nearly everyone as more and more states try to legalize various forms of gambling. Legalized gambling exists in forty-seven states and the District of Columbia” (Anderson, 1997, p. 1). It seems there is a huge social and economic price to pay for legalizing gambling, but it is not slowing down their momentum to get it done. The chart below shows the top six (6) states leading in money earned through the various types of gambling.
The most obvious is Nevada being that Las Vegas is the centralized within the state. Second in line is New Jersey with Atlantic City, which is their version of Vegas without steroids. The other states listed have small casinos scattered around, but are still money makers despite their random sizes and locations. “The Organized Crime Section of the Department of Justice found that the rate of illegal gambling in those states which have some legalized form of gambling was three times as high as those states where there was not a legalized form of gambling” (Anderson, 1997, p. 2). Why is this so? Simply and strangely, most gamblers would rather bet illegally than legally because they don’t have to report their winnings to the government. The bigger reason is that “organized crime syndicates often use the free publicity of state lotteries and pari-mutuel betting to run their own numbers games. The state actually saves them money by providing publicity for events involving gambling” (Anderson, 1997, p. 3).
Now, the cream of the crop, sports gambling. It is illegal in just about every state, but there has been a push to legalize it. The problem with that is that some people are concerned that it would ruin the integrity of the game. Gamblers and true fans are two completely opposite team supporters. The true fan is there for their team, win or lose, but the gambler is concerned about whether or not their team was able to beat the point spread. Just winning the game is not enough, the gambler only wins if the point spread is achieved. Winning by three points is not enough if the point spread was actually seven. “Sports gambling has affected sports by introducing organized crime into the sporting arena. Past scandals at Boston College and Tulane illustrate how gambling has adversely affected the integrity of athletes, coaches, and colleges. Players have been involved in point-shaving scandals and the problem could only become worse in an environment where sport gambling is legalized” (Anderson, 1997, p. 4).
“Sports gambling is legal in only four U.S. states including (of course) Nevada, home of Las Vegas. However, illegal sports betting operations around the world, including online outfits, sometimes offset bets they receive by placing casino wagers” (Reuters, 2015, p. 1). Despite this gambling fact, some estimate approximately $400 billion is bet illegally on sports each year in the US. “Runners” will usually hang around the casino with cell phones and tablets at the ready, so they can receive their “orders” from the illiegal gambling ring. It is amazing the lengths that these criminals will go in order to raise their already astronomical bank accounts. Treasury’s Financial Crimes Enforcement Network (FinCEN) has already addressed the issue with the casinos in a letter sent out right before this year’s Super Bowl. They knew the illegal gambling activity was going to skyrocket with such a huge game at stake. “While casinos routinely look for suspicious bets at sports books and have worked with law enforcement to identify illegal activity, in some cases leading to criminal convictions, no such oversight exists for the illegal sports betting market” (Reuters, 2015, p. 1).
Another problem would be how the government would be involved in the legalization of sports gambling. If it is legalized then there is the possibility, or even the necessity, of government investigations where a sports decision by a coach could be questioned by a government oversight body or committee. For example, citizens lost money on a game over a call the coach made on a winning play that did not reach the point spread. That would call for an immediate investigation to be sure there was no fraud or foul play involved. It’s almost as though legalizing sports gambling would be more trouble than what it’s worth. Sports gambling goes on regardless of its legality, but there are good reasons why not to make it legal. “It is bad social policy, it is bad economic policy, and it is bad governmental policy. Sports gambling would not only be bad for these reasons, but also it would adversely affect the integrity of the game” (Anderson, 1997, p.4).
While still discussing sports, let’s turn the focus on one sport in particular… football. Organized crime is not only involved in the gambling aspect of the sport, they are involved in ownership of teams. “In the early 1920s, one George Halas turned to Charles Bidwell, a bootlegger, gambler, racetrack owner, and associate of Chicago’s Al (Scarface) Capone’s mob, to finance the Chicago Bears. Later, Bidwell bought the Chicago Cardinals. The Bidwell family now owns the Arizona Cardinals” (Bauder, 2012, p. 2). In 1925, bookie Tim Mara bought the New York Giants. Heirs to the Mara family still own half the team. Art Rooney, a once notorious gambler, took over the Pittsburgh Steelers. His family still owns the team, and the Rooney Empire is working to keep the racetracks and casinos separate from the football team. The Cleveland Browns were owned Arthur (Mickey) McBride, a crime syndicate bookmaker. The Youngstown DeBartolo family owns the San Francisco 49ers, but their original start was in racetracks and casinos as well. Gambler Barron Hilton, founder of the Chargers, had a business and personal relationship with Los Angeles attorney Sidney Korshak “who was described by law enforcement officials as the link between the legitimate business world and organized crime” (Bauder, 2012, p. 3). The list goes on and on, but the fact remains, organized crime is not just in the big and fancy Las Vegas casinos.
Here is an interesting little tidbit… fantasy sports is not gambling (I did not know that!). The Federal government does not define fantasy sports as gambling. “The Unlawful Internet Gambling Enforcement Act of 2006 included “carve out” language that clarified the legality of fantasy sports. It was passed by Congress and signed into law on October 13, 2006 by President George W. Bush. The act makes transactions from banks or similar institutions to online gambling sites illegal, with the notable exceptions of fantasy sports, online lotteries and horse/harness racing. The bill specifically exempts fantasy sports games, educational games or any online contest that has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events, including any non-participant’s individual performances in such sporting events” (fsta.org).
There is a big difference between gamblers and fantasy sports players. Gamblers are in it for the money, while the fantasy players are in it for the pure hobby and skills of it. They mostly enter free contests that have no prizes or monetary winnings. In a way, it is a competitive sport all its own where friends and strangers compete to create the best and strongest team in the “fantasy” league. Their knowledge of the game, the players, and all the statistics are all taken into consideration when forming the best team. Not everyone has what it takes to play in the fantasy leagues, but those who do are serious players. “In a handful of other states, like Florida and Kansas, state authorities have called into doubt the legality of fantasy football for money under any circumstances. This is in large part because of the completely unregulated nature of most fantasy football leagues” (HG.org). Actually, some friends think that a harmless game of poker with their buddies and some beers is not a problem. In reality, depending on what the state prohibits or regulates, even the harmless game at home can be illegal. Now that’s something not everyone is aware of, and really, seems a little drastic. A harmless game of poker among friends should be nothing in the grand scheme of things when there are definitely bigger fish to fry, and real criminals to catch. As already mentioned, “in the grand scheme of crime prevention, fantasy football leagues do not rank very highly, either in terms of actual enforcement or public concern. Indeed, there are doubtless many law enforcement officers engaging in fantasy football leagues right now without even being aware that they are technically breaking the law. As a result, the odds of your league creating a significant risk that the police will be breaking down your door and dragging you out in handcuffs should be relatively small. Nevertheless, being aware of the legalities of fantasy football in your jurisdiction may be wise” (HG.org). As shown in the chart below, fantasy sports have become as popular as the true game itself, pulling in millions of “players” from all over.
Another aspect of sports gambling is the fact that there is tampering going on. Behind the scenes there is bribery, match or race fixing, thrown games, tanking, dumping, and sandbagging. It doesn’t happen with every game or every sport, but it has been going on for quite some time. No one likes to lose, especially not the organized crime syndicates. Bribery is a big part of getting the outcome of a game to go in their favor. Players, referees, and coaches are paid off to either “throw” a game (lose it on purpose) or tank a game, which is “when a team intentionally loses a game, or does not score as high as it can, to obtain perceived future competitive advantage (for instance, earning a high draft pick) rather than gamblers being involved” (Lyman, 2015, p. 158).
The many ups and downs in the “business” of gambling is enough to make heads spin. The question of whether it is legal or illegal, where it is ok to gamble, whether organized crime is involved or not… It is enough to make the FBI and law enforcement go crazy. Standards and regulations are in place for a reason, but of course, as the old saying goes, “rules are made to be broken”. That is almost an understatement when certain aspects of gambling and betting are taken into consideration. The illusion of never getting caught is probably what keeps these rackets going, but even when taken into custody, there is always someone else to pick up right where they left off. The never ending cycle of illegal activities is something the US, as well as other countries, should realize is not going anywhere. Try as they may, law enforcement can’t keep up with everyone in the organized crime syndicates. There is always that small handful that slips through the cracks and continues to make billions off the citizens’ poor choices in hobbies. Exploiting other’s weaknesses, that’s what it’s all about.
Why Fantasy Sports is Not Gambling. (n.d.). (Fantasy Sports Trade Association). Retrieved March 20, 2015, from http://www.fsta.org/?page=FSandGambling
U.S. Treasury warns casinos on illegal sports betting. (2015, January 16). Retrieved March 21, 2015, from http://fortune.com/2015/01/16/casinos-illegal-sports-betting
Lyman, M., & Potter, G. (2015). Organized Crime (6th ed.). Upper Saddle River, New Jersey: Prentice Hall/Pearson Education.
Dunstan, R. (1997, January 1). XI. Gambling and Crime: Gambling in California. Retrieved February 23, 2015, from https://www.library.ca.gov/CRB/97/03/Chapt11.html
Anderson, K. (1997, January 1). Gambling. Retrieved February 27, 2015, from http://www.leaderu.com/orgs/probe/docs/gambling.html
Bauder, D. (2012, March 12). The NFL’s Dirty Secret. San Diego Reader. Retrieved February 28, 2015, from http://www.sandiegoreader.com/news/2012/jul/04/citylights1-nfl-dirty-secret
Did You Know Your Fantasy Football League Might be Illegal? (n.d.) HG.org Legal Resources. Retrieved March 21, 2015, from http://www.hg.org/article.asp?id=31195