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Illegal Gambling in New York - A Case Study in the Operation, Structure, and Regulation of an Illegal Market

NCJ Number
P Reuter; J Rubinstein
Date Published
265 pages
Empirical research into New York City area illegal gambling markets--Numbers and bookmaking--indicates less direct Mafia involvement than believed and suggests a new approach to police intelligence-gathering and analysis aimed at controlling organized crime.
Financial records of illegal gambling operations, informal interviews, and police files failed to support the predominant assumption of centralized Mafia control over the Numbers and bookmaking markets. While there was Mafia financial involvement in the Numbers operations, members did not control market entry or regular pricing policies, nor direct individual operations. Numbers banks were found to operate on a much smaller and more variable profit margin than has been assumed, due to cheating by clerks and managers, uneven betting distributions, and problems in collecting balances. Regarding bookmaking, organized crime was also found to play a role in this market, but again there was no evidence of domination or direct control over individual operations. Instead, Mafia members were involved primarily as financiers; their influence was not exclusive, since bookmakers borrowed from a variety of sources. As with Numbers, findings on bookmaking profit levels contradicted assumptions about their lucrative nature. Profit margins were often extremely low, and bookmakers frequently experienced long-term financial problems, even repeated bankruptcies. Following these analyses, the authors present a detailed discussion of gambling law enforcement issues and conclude with a special analysis of police intelligence gathering and its use. Intelligence is currently collected for compiling evidence to successfully prosecute cases. The authors recommend that the intelligence gathering process be used instead to acquire information for shaping policy to control organized crime. They also recommend that police departments recruit highly trained intelligence specialists since current staff lack these critical skills. Tables, figures, footnotes, and about 80 references are included. Appendixes provide information on loansharking, betting preferences in the Numbers game, and illegal gambling in other cities.