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Most US states allow some form of gambling, whether that’s private poker games, charitable raffles, or full-blown casino table games and slot machines. Any gambling that takes place outside the existing gambling regulations in your state is illegal – in some cases, this includes Super Bowl squares contests at the office and 50-50 raffles at the Little League ballpark.

America’s a funny place, where social customs often find themselves labeled “outside the law.”

Despite many attempts over the past century to crack down on illegal gambling, it’s still rampant, particularly in states where citizens don’t have access to legal bets.

This post describes illegal gambling rings, the reasons for their existence, and some details on how they operate, along with some thoughts on various aspects of gambling law sprinkled throughout.

What Are Illegal Gambling Rings?

Illegal gambling rings need four things to operate:

  • Location
  • Money
  • Employees
  • Customers

You can assume some things about an illegal gambling ring – that it’s going to take place in a private location (or entirely online with no physical location at all). It’s going to employ several people. It’s going to involve a lot of money changing hands in all directions. And they’re going to have a lot of customers.

Below is a short guide to each of the four requirements for operating an illegal gambling ring.

Illegal Gambling Ring Locations

Illegal gambling can take place anywhere – even in a church. Typically, illegal gambling on a scale that can be described as a “ring” takes place in a physical location like a storefront, the back room of a restaurant, or a gas station.

The key to operating a business like this is privacy – you need to obscure what’s going on from the outside, you need to control who comes in, and you need to have the ability to handle large amounts of cash.

Where are illegal gambling rings located?

You’ll find them all over the country, though they’re concentrated heavily in urban areas in states with restrictive gaming laws. Texas is a good example. Dallas and Houston are overrun with illegal gambling shops, thanks in large part to the long drive required of people living in those cities who want to gamble legally in Louisiana or Oklahoma.

Illegal Gambling Ring Cash

Gambling means risk, both for the customer and the house. While the house usually wins, it’s prudent for gambling rings to have enough cash on hand to cover strings of customer wins.

Since gambling rings vary in size from a couple of people to several thousand customers, the amount of money involved also varies.

Further Info:

The biggest bust in recent memory was a $5 billion score for the feds in 2013 after they broke up Albert Reed, Jr.’s Global Internet Corporation betting ring.

It’s unlikely that the little slots parlor behind your neighborhood grocery store is dealing in that kind of cash, but gambling is a lucrative enterprise, so you may be surprised.

It’s not always the case that gambling rings represent large amounts of money. Look at this bust in California in 2021 – 70 arrests made, but no mention of large amounts of money seized. Police departments tend to brag about their cash hauls, so you can safely assume that this arrest was small potatoes in terms of money.

Employees of Illegal Gambling Rings

The number and type of employees required to run an illegal gambling ring depends on the nature of the business. Is it a sports betting ring? In that case, you may only need a bookmaker, a secretary or two, and some muscle to distribute and collect cash. An illegal sportsbook can take place entirely virtually, except for the real interactions required for the exchange of cash.

An illegal slots parlor may require several employees – a guard for the door, employees to work the floor, janitorial staff to keep the place running, etc. “Big guys with guns” are going to make up a big part of the staff at any given time. Think about it – lots of cash and no cops means a high risk of robbery.

Customers of Illegal Gambling Rings

There’s not really a type when it comes to the people who walk in the door at illegal betting parlors. Gambling is an equalizer.

People of all different races and social classes like to gamble.

When those people don’t have access to legal bets, they find outlets that allow it, even if those games exist outside the law. In fact, most customers at gambling parlors and illegal poker rooms would be more than happy to play in regulated environments, if such environments existed.

The Pros and Cons of Illegal Gambling

Green Thumbs Up, Red Thumbs Down

Should you play games at an underground gaming parlor or illegal back-room poker game? Consider the possibilities – if you don’t like the idea of mixing with the kind of people drawn to illegal gambling, it’s probably not the scene for you. If you want to gamble and don’t have a legal option anywhere near you, it may be your only option.

Here’s a look at the good and bad sides of playing games at illegal betting shops.

Pro – No Taxes!

Gambling outside the eye of the lawman is appealing for the most obvious reason – more money in your pocket. This one speaks for itself. Not only does the illegal gaming operator save the 7-10% tax rate that legit casino operators face, but the winners don’t have to pay or declare a dime to anyone.

Con – Illegal Casinos Are Scary

These places have a bad reputation. When you’re dealing with activity that’s outside the margins, you’re going to bump up against some, let’s say, interesting characters. Is it possible for violence to break out in a regulated legal casino? Of course, but the cops are usually present in those spaces, and there are built-in protections for customers when you’re in a white-hat gambling venue.

Pro – Located Near You

If you live in Utah, Hawaii, Indiana, or Tennessee, you have almost no options in terms of legal gambling. Your best option is usually a multi-hour drive to a nearby state. In the case of Hawaii, you’d have to literally get on a boat or a plane to visit a more gambling-friendly state. Illegal blackjack games, illegal slot machines, and pretty much any game of chance you want to play are all available at these small gambling parlors. In big cities, you have options in terms of where to play. The accessibility of these illicit casinos is a big mark in the pro column.

Con – Predatory Practices

If you’ve spent any time in places that offer illegal slots or other games, you know what I’m talking about. Employees of these shops are authorized to offer people money to chase their losses, something on the level of $20 or $40. I have lots of issues with this, but the most glaring is that it seems designed to harm people with compulsive gambling problems. It’s not the kind of thing a legit casino would ever do. This isn’t the only shady thing that goes on at illegal casinos, but it’s a good stand-in for a whole slew of predatory practices that wouldn’t be allowed in a regulated system.

What Happens When Illegal Gambling Rings Get Busted?

You may be surprised to learn how little happens when an illegal game parlor or ring gets busted. The cops may run lights and sirens and make a big show, to try to scare away customers, but it’s unlikely that anyone is going to jail.

Here’s what usually happens when the cops bust in on an illegal betting shop:

For the most part, customers get off easy. Cops will usually check everyone’s ID and call in for warrants, but if you aren’t wanted, they’re going to let you go with a stern warning or whatever.

Employees of these rings are usually given the same treatment, depending on their level of involvement. The guy watching the door is likely to get a pat on the back and advice to clear the scene, but the operators are looking at a long conversation and a long night signing tickets.

For the most part, big-city vice squads are interested in ticketing these places out of existence.

Note:

What’s funny is that the cops don’t really go after the gambling stuff, for the most part. They’ll ticket the owner of the restaurant or storefront or gas station on petty violations, stacking up tens of thousands in fines that the owner will have to pay to keep the machines running.

Here’s a Reddit AMA with a guy who got busted for operating illegal gambling machines and other games. He gives a lot of details about what happened to him, but he also adds some conspiratorial stuff along the way, so it’s a funny read, if nothing else. You won’t learn anything new if you’re already familiar with how big city cops and illegal gambling interact. Still, it’s interesting to read it from the perspective of someone who got busted.

Conclusion

If states wanted to get serious about cracking down on illicit casinos and poker games, they’d go out of their way to create places where people could play slots or blackjack or whatever legally. Tax revenue from legal slot rooms and casinos should be enough to entice state governments. Surely, they’d rather earn money on slot machines than spend money trying to track them and shut them down.

For the time being, so long as gaming laws that restrict people’s ability to play their favorite games exist, illegal places to play those games will exist.

Before you head into a slot room or poker game that exists outside the law, understand the risks and benefits, and consider the possible outcomes if the room gets busted while you’re playing.

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