Not All the Big Bets Are on Wall Street
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Pete: A lot of people make very good money, they flash it around, high-roll it. It's kind of out in the open, and I guess it's obvious.
CA: How many times in your 25-year career have you been raided?
Pete: At least five times.
CA: When was the most recent time?
CA: So what happens? You're in your office or wherever you are, what happens?
Pete: You're in your office, you're taking business, and all of a sudden the door comes down.
CA: The door comes down? There's not a knock on the door?
Pete: Actually now, we leave the door open. We're tired of repairing them.
CA: They don't try to open the door first?
Pete: No, they smash it, they come with a battering ram and they smash everything down. They have the place surrounded, so you know, you really can't escape. I mean you try, you jump out the window, you try everything, because once you're outside the building, they have a tough case against you. Bookmaking is very, very tough to prove, if you don't actually have somebody giving you money to take a bet. And they know that. I think around the political years they make most of the arrests.
CA: And so they arrested you?
Pete: Oh, yes.
CA: And they arrested the people that worked for you.
CA: Do you go to jail, do you get fined, what happens?
Pete: You usually go to jail, and with the amount of the other crimes that they are involved in, you'll wait. You usually spend a day, and then you're bailed out. The bail is small and you get a court date. You go in, you plead guilty and you get a misdemeanor.
CA: That's it?
Pete: That's it.
CA: Then it's back to business as usual?
CA: When I was raised in New Haven, Connecticut--this goes back 40 years--I lived next door to a guy whose name was Kowalski. Does that name ring a bell?
CA: And about once every year, three or four police cars would race up the street and drive up on his lawn. They'd break down the door and charge into the house. His son used to tell me that the father would take all the betting slips when he heard the commotion and flush them down the toilet. And if he was able to get all of the paper into the toilet in time, they couldn't touch him.
Pete: That's right. Back then, they also used rice paper that they'd light up, and it was gone in a poof.
CA: How do your clerks validate a bet, and how do you protect yourself from people calling in saying, "I didn't bet Dallas, I bet Pittsburgh"?
Pete: Every conversation is recorded.
CA: So when a customer places a bet, the clerk will say a code name and give the amount he's betting and put it on a Dictaphone tape or something?
Pete: No, the whole call is taped, and the tape runs constantly. We use a hunt system, and whenever a phone is picked up, it's automatically recorded.
CA: Are there ever problems or mistakes where for whatever reason there is a misunderstanding? Is that a common thing or a rare thing?
Pete: A rare thing, but it does happen on both [sides]. Customers have made mistakes and so have we. The problems always seem to be rectified when you deal with reputable people.
CA: Do the clerks have certain customers, or do they just answer the phone?
Pete: No, they just answer the phone.
CA: When is the accounting done? Is it done on ledgers? How do you keep track of what may be many individual transactions?
Pete: We do tickets in triplicate. We don't use a computer, for the simple fact that that creates more evidence. Some people have gotten highly sophisticated, which I don't believe in, because the business is relatively simple. We use triplicates and we have two people doing it. We call it the knockdown. That means they do all the tickets, two people. They have to come up with the same answer.
CA: It's like a cross check?
CA: When do they do it?
Pete: They do it at night or early in the morning. They have to wait until all the results are in.