Gambling remains the biggest over all earner for the mob. The illegal numbers racket is still around, despite the existence of the legal state lottery, but it's not as big as it once was. At least not in terms of what the mob controls. It's still essentially the same thing, however. A bettor can put money down on any 3 digit number they want. Something like the last 3 numbers in the total money handled that day or week from the local race track - something that can't be tampered with or fixed - is typical. Mathematically, it's a long shot. About 1,000 to 1. But still better than the state lotto. And you can put down as little as $1. That's why numbers betting has always been popular in the poor neighborhoods. If their number hits, they get usually get paid at 500 to 1 odds. So, $500 for a $1 bet. $5,000 for a $10 bet. Etc. Today, numbers is usually just an appendage to what is far and away the mob's biggest cash cow - illegal sports betting.
That business has changed somewhat in recent years, with the internet and the use of more offshore websites and phone banks. Bettors will either log onto a site with a name and password, or simply call a number to a wireroom in a place like Costa Rica, and place their bet. That way, the mob doesn't need to run the risk of taking the bets themselves from their own wireroom where the cops might kick in the front door during a raid. The bookie simply checks the website or calls Costa Rica himself and can see what his bettors won or what they owe.
The key to a bookie making money is balancing his books. For instance, if there is a football game, say the Colts vs. the Chiefs this Sunday, the bookie would ideally like to have an equal amount of money bet on both sides. In your typical sports wager, to win $100 you must risk $110. Or, to win $1,000 you must risk $1,100. Risk $11,000 to win $10,000. Etc. If the bookie has one bettor betting on the Colts and the other on the Chiefs, it doesn't matter the actual outcome of the game. He takes the $110 from the loser, gives $100 of it to the winner, and keeps the $10 for himself. None of his own money is ever at risk.
Now obviously this is easier said than done. There is often a clear favorite in any sports matchup and so more money is likely to be bet on the favorite rather than the underdog. That's where the spread comes in. Right now, the Colts are an 8 point favorite. That means, if somebody wants to bet on them, the Colts must win by more than 8 points or "cover the spread." Even if they win, if it's by less than 8, the bettor loses. On the other hand, a bettor can pick the Chiefs to either win outright or at least lose by less than 8.
Often the situation involves more or less independent bookies who form partnerships with the mob in order to have a bigger pool to lay off their bets if there is too much action one way or the other. A bookie may have a "package" of 10, 15, 20, or more regular bettors. It's easy to handle their business but he doesn't want to run the risk of getting wiped out if too many of his players have a particularly good weekend. Going back to the Colts/Chiefs game, if he has $200,000 bet on the Colts and only $100,000 on the Chiefs, he will have a problem if the Colts do in fact cover the spread by winning by more than 8. He'll be owing more to the winners than he's taking from the losers. Which means he's paying out of his own pocket. And a bookie can't stay in business very long doing that.
So the bookie uses his mob partners to "lay off" some of the action to other books who might be too far the other way. In other words, he'll take $50,000 and bet it on the Chiefs with that book. That way, he now has an equal amount of money on both sides - $150,000 - and he stands to make his 10% regardless of who actually wins.
Of course, the nature of the mob being what it is, sometimes these "partnerships" are forced partnerships. An independent bookie grows big enough and he eventually gets a visit from some mob guys who tell him they are his new partners. Or he has to at least pay a percentage of his profits in order to keep operating. The mob makes money from it's own bookmaking operations, as well as taxing others.
A third way the mob makes money from gambling is video poker machines. Through companies they own or control, they put the machines in local businesses like bars, clubs, restaurants, laundromats, etc. They are not like a regular slot machine that dispenses money on it's own. That's illegal and the machines wouldn't last very long. The player simply puts money into the machine, like he's playing a video game, and attempts to rack up points. Whatever they win can be redeemed in money from the business owner himself directly. Not from the machine. This way, the business owner can only do it with players he knows, while those he doesn't know (who might be cops) he can just tell the machines are for amusement only. The mob typically goes 50-50 on the machine's profits with the business owner and they come around every week, sometimes every day, to collect the money from the machines themselves. Of course, like independent bookies, sometimes it's simply a matter of the mob taxing other video poker operators for allowing them to place their machines in mob territory.
Lastly, the mob still runs "floating" high-stakes card games. Or, again, they may tax them. There are still some backroom casinos run by the mob - think the Bloomfield Avenue operation on The Sopranos - but those aren't what they were back in the day before Atlantic City, Indian casinos, river gambling boats, and other forms of legalized gambling.
Anyway, that's the short version tutorial on how the mob makes money from gambling.
