Prosecutors: Mafia still alive, hands in New York gambling

(NewsNation) — Eight alleged mobsters of the Bonanno and Genovese families and a Long Island police officer were arrested Tuesday in what prosecutors are calling a wide-ranging gambling scheme.

The charges include racketeering, illegal gambling, money laundering, conspiracy and obstruction of justice. The United States attorney for the Eastern District of New York says the suspects ran illegal gambling schemes out of a soccer club in Queens and a coffee bar and shoe repair shop on Long Island.

“Today’s arrests of members from two Mafia crime families demonstrate that the Mafia continues to pollute our communities with illegal gambling, extortion, and violence while using our financial system in service to their criminal schemes,” stated United States Attorney Breon Peace.

Being that mobile sports betting has been live in New York for a little more than eight months, garnering $249 million in tax revenue in May, it’s safe to wonder why anyone would take the risk of seeking out a shady, backroom operation.

So NewsNation correspondent Paul Gerke talked to Matthew Waters — the assistant managing editor for Legal Sports Report, which covers the regulated and unregulated gambling industry — for answers.

According to Waters, there are some good reasons the black market bookie isn’t going anywhere.

“Just because it’s not regulated doesn’t mean that the people that were doing it illegally before are going to stop doing it illegally now,” Waters told NewsNation’s “Rush Hour” on Wednesday.

One reason, Waters argues, is New York’s skyscraper-high tax rate: 51 percent of mobile gambling revenue goes to the state, which operators argue is just too much and, as a result, have cut back on advertising.

“And when you don’t see as much marketing, but you still have people looking for online sports books, some of those nefarious operators are going to work their way in,” Waters said.

A recent survey by the Fantasy Sports Association showed when sports betting is legalized in a state, the use of offshore books drops down to about 25%.

But it appears many of the people using them do so unwittingly.

“You still have four out of every five consumers in a regulated state using an unregulated sports book” who don’t know the difference. “And it’s not easy to tell,” Waters explained.

And there are logical reasons bettors might seek out black market bookies — mobile sites don’t allow customers to bet on everything.

New York and New Jersey, for example, don’t permit wagering on in-state college teams. Additionally, U.S. sportsbooks do not offer credit to its customers.

“The guy around the corner certainly does,” Waters said.

Through Aug. 7, New Yorks’s total betting handle was $9,518,974,285, with a total betting revenue of $701,802,528 and a total state tax revenue of $357,919,289.

That $358 million in tax revenue goes to education, youth sports and gambling addiction services.

Is the state missing out on some potential money? Yes.

“Taxing it ay 51 percent — it’s going to be a good chunk of money that absolutely would buy more books, build another playground, do whatever those education dollars can do,” Waters said.