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Living by the Book

Illegal Gambling Operations Handle Millions of Dollars Every Month
Michael Konik
From the Print Edition:
maduro issue, Winter 93/94

(continued from page 2)

What his office does, Bobby says, is a common practice called "scalping." For example, as soon as Clyde calls in his bet on the Packers, giving six points, Bobby gets on the phone to other bookmaking operations around New York (and sometimes the entire United States), placing substantial bets on the Packers minus six points. In the meantime, he adjusts the betting line at his office, making the Packers a seven-point or seven-and-a-half-point favorite. When the anticipated onslaught of calls following

Clyde's lead comes in, the callers pay a premium price. By kickoff time, the Packers might be giving up eight points.

"Buy cheap. Sell expensive," Bobby says, grinning.

The money that supports the bookmaker's "gambling with an edge" comes, of course, from his faithful customers. Their constant infusions of capital are what keeps a bookmaker liquid, even when he has a bad week. Therefore, Bobby says, it is crucial to continually recruit new players and keep the ones you have content, even when they're bleeding off their money. "That's one reason we have a $5,000 limit on any one bet. We don't want our customers going broke. We want to do a volume business."

A bookmaking office is organized like a pyramid: the clerks who answer the phones start out earning an hourly wage. For each new player they personally bring to the operation, they get a small percentage of the winnings. Managerial employees earn a larger percentage of each client's losses. And the boss of the office, the unofficial "bookmaker," keeps the bulk of the profit. In turn, the entire office may be part of a larger syndicate, in which case the earnings go to an unseen higher-up, who probably has never met the low-level clerks who answer the phones and supply him with fresh gamblers.

At the top of that pyramid may well be organized crime. According to the Associated Press, Justice Department studies conclude that illegal gambling is the mob's largest source of revenue, greater than prostitution or drugs. Some bookies disagree. "That may be [true] in some organizations," says Jim*, a California-based bookie. "But as far as I know, everyone we deal with, all the way to the top, is legit. The money doesn't end up in the Godfather's hands. It goes to Vegas! We're all part of a larger syndicate. And the biggest players in the group live in the Nevada desert."

Indeed, the national line starts there--it originates from a "sports-consultation" service run by a well-known oddsmaker, who is paid by the casinos to post a number that anticipates which way the public will bet. The legal sports book at the Stardust claims to release the earliest odds, but within minutes every other place does, too. Las Vegas dictates the flow of the nation's bets--and much of the money flows back to there. Bookies from around the country have associates who work the pay phones around the sports books of all the major casinos, ready to lay off money at the last minute. They also deal with "outlaw bookmakers," who will take bets of more than $10,000 without issuing paperwork for the IRS. The network is enormous.

"Being a part of a large organization, a syndicate, helps you absorb the big losses," Bobby says. "But the only way to make big money is to have your own clients." To that end, Bobby and his colleagues frequent New York City sports bars and card rooms. They take day trips to Atlantic City, New Jersey, and Ledyard, Connecticut--home to a Native-American-owned casino, where all forms of gambling are legal--except sports. "That's one of the drawbacks of this business. You can't advertise. So you go where gamblers congregate," Bobby says. "And you find customers."

The majority of a bookie's business, however, finds him--simple word-of-mouth. "Ninety percent of our customers are referrals," Bobby reports. "If one of our regular players will vouch for a new player, we'll take his action. Maybe he has to put the cash up front at first [most longtime players bet on credit], or the guy who brought him to us is responsible for anything his pal might lose. But if he comes with a recommendation, we'll take him." If the fledgling bettor proves reliable, making good on several weeks of losses, his credit limit is raised. "We're like American Express," Bobby quips.

Occasionally the bookmaker will get stiffed by a deadbeat. According to nearly a dozen bookies I spoke with, the official party line is: "We don't use hired goons." Kneecap-breaking gorillas in shiny suits are, apparently, bad for business. "If someone holds out on me," says Raymond,* one of the largest operators in Texas, "I write it off as a business loss. And I'm more mad at myself than anyone else for trusting the bastard." In lieu of smashed patellas, many bookies find the best way to collect is by threatening to call the wife. "Most guys are more scared of the missus than a couple of cracked ribs," he reports. Like a bank, the bookmaker would rather do prior, rigorous credit checks than engage in messy collection procedures.

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