The US's Most Notorious Illegal Gambling Case: $22.7 Million, 25-Year Prison Sentence

A columnist from the industry publication IGF conducted an analysis of a prominent scandal within the US gambling industry. Working in collaboration with IGF, we aim to determine if there is truth to claims of mafia involvement in the industry, or if these allegations are being sensationalised by the public, press, and government. Additionally, we will explore whether legalising gambling can aid in combating illicit activities within the gambling sector.

Illegal BC: High Interest Rates and High Incomes

After an authoritative report revealed that about three-quarters of online gambling revenue in New York State comes from illegal activities, law enforcement officials uncovered a $22.7 million illegal bookmaking operation run by one of the largest criminal organisations in the New York mafia. Making matters worse, much of the illegal sports betting and loansharking was conducted from a popular pizzeria in Staten Island, creating a scenario straight out of a Hollywood movie with mafia clans, wiretapping, surveillance, and hidden safe houses. Ultimately, it was a spectacle that captured the public's attention.

The main characters of the Gambino clan and illegal gambling

Daniel Bogan, a 41-year-old owner of a pizzeria in the Eltingville shopping center with alleged ties to the Gambino crime family, has been implicated in running an illegal sports betting operation along with 16 other associates. The operation reportedly generated $22.7 million in illegal bets and $500,000 in high-interest loans. Despite the legalisation of online sports betting in New York state, a recent report has revealed that a significant portion of gambling revenue is still being collected by underground or illegal offshore operators. Illegal iCasino platforms are estimated to have earned $3.4 billion, while illegal online bookmakers brought in $1.9 billion.

The Racket in New York?

"In a statement, New York State Attorney General Letitia James highlighted that illegal gambling and high-interest loansharkings are some of the oldest schemes used by organized crime. Following the arrest of 17 alleged mobsters on June 5, 2024, she emphasised the impact these criminal activities have had on New Yorkers, with tens of millions of dollars stolen and many individuals trapped in debt. The indictment focused on the unlicensed gambling site Ubet1288.com, which operated between September 2022 and March 2023. The illegal operation targeted players who found themselves in debt, offering loans with illegally high interest rates. The criminal enterprise, led by "pizza man" Bogan, also involved reputed Gambino soldiers and associates who profited from the financial hardships of their victims. Edward LaForte, in particular, was implicated in running the gambling site and overseeing a group of "sheet holders" responsible for managing bets and collecting money from debtors."

Five Families and New York City Officials

The Gambino crime family is one of the five major organised crime families, known as the “Five Families,” that operate in the New York City area and sometimes internationally. The Bonanno, Colombo, Genovese, Lucchese, and Gambino families are prominent in the downtown New York City region. New York City Waterfront Commissioner Paul Weinstein stated that the recent arrests serve as a strong indication that organised crime is still prevalent in the area. The Gambino family has historically had a stronghold on the Port of New York, and cutting off sources of income like gambling and loansharking weakens their influence. New York State Gaming Commission Chairman Brian O’Dwyer emphasised the connection between illegal sports betting and organised crime, highlighting the importance of regulating gaming to protect both players and revenue. The 17 defendants are facing various charges, including enterprise corruption, criminal loansharking, and facilitation of gambling, with a potential sentence of up to 25 years in prison if convicted.