The mafia in Las Vegas

I just don't get it. How did the mafia made profit? It was on an illegal way, i know because of the Casino-movie where you saw mob-bossen on trial etc. etc. But why didn't they just do it legal?
I also dont get the idea of skimming of the top.. Isn't the idea of skimming of the top that they doesn't have to pay tax on the money they skimmed? But they cant skim much because the fbi will notice, or not? I mean, they cant say we make a 1 billion profit if its actually 2 bilion....
And what about the Teamsters Pensiun Funds? What does they have to do with casino's?

I dont get it....maybe some of you do.

Mob bosses could not "legally" attach their names to the casinos that they had interests in. So a skim system was used to pay them their profits. If a casino skimmed $400,000 per month, that's $4.8 million dollars in Unclaimed profits in a year, and from one casino! This method of skimming allowed the bosses to collect their payments unattached to the casinos and tax free!

The Teamster made loans for the bulding of the casinos for several reasons. Those who ran the pension fund had an obligation to "invest" the money from the funds to make a profit for thier members. Now if a casino was to be built, obviously money is needed for building. A bank may want 10% interest on the loan plus 2% in points up front for loan approval. More improtantly an application needed to be scrutinized with background checks, crossing of all the t's and dotting of the i's before a loan approval would be made. Time consuming and somewhat risky.

If the mobsters went to the Teamsters for a loan, that loan application was almost guarenteed to be approved quickly and with less scrutiny. The interest to be paid would be significantly less than what the bank would charge. A 1% point value of the loan would be paid to the pension fund managers. If extensions were needed on paying back those loans there was no problem in granting them.

So the casinos saved a significant amount of money, scrutinization and time in getting loans from the Teamsters.

In return the pension fund managers were making money for themselves in the form of being paid points for approving the loans, and at the same time they were doing there "jobs" in "investing" the pension fund monies to make profits for their members retirements.

Difference between the banks and the Teamsters Loan officers? Nothing. Except that a bank can LEGALLY charge a loan applicant points for granting a loan. The Teamsters did the same but only they were taking those payments in points under the table in cash or in the form of various gifts.


Don Cardi

The money a casino makes in absolute dollars can be enormous, but in terms of a percentage of the total amount of money that the casino handles it can be considered relatively small because, again relatively speaking, the odds favoring the house are not that great. They do it on volume.

Let's say that the average total "Drop" (total amount of money in chips bought by the players) in a casino is $2 million for the day.

That translates to $730 million annually.

The edge that the house has is, let's say, 7-8%, so the house can expect a gross profit of about $55 million.

If they skim $3-4 million off the top to keep a few bosses happy, who's gonna miss it?

Carl Thomas who was known as "the master" of Las Vegas skim has been quoted as saying that in the 60's it was estimated that the Chicago Mob skimmed approximately $400,000 per month off JUST the slot machines at the Stardust Hotel. Blackjack and the other table games yeilded a totally different skim which was believed to be much higher than the $400,00 skimmed from the slots.

As Plaw said, volume is the key to a casino making profits, volume along with TIME. A casino would rather have a player sitting at it's table averaging $100 per bet over a period of 3 or 4 hours than a player sitting there for two or three roulette spins averaging $1000 per bet and only sitting there for 15 minutes. The more time a player spends gambling the more the odds fall in the favor of the house. If I bet $100 per hand and sit there for 3 hours, the odds are that I will lose. And even if I hit here and there, it would not hurt the house and in all likelyhood I will continue to play and give back what I won and then some. A player who walks over to a table and drops $1000 three bets in a row, say in roulette, can win big with one of those bets and odds are that he will pick his money op and walk away a winner, not giving the house a chance to take their money back plus some of his. Time played is a key factor in casino's making money. That is why if a casino sees that you have a history of sitting at a tanble for an average of 2 - 3 hours at a time and making a conisistent average bet, they will comp you faster than a player that drops $3000 in 10 minutes and walsk away.


Don Cardi

The irony here is that, before 1958, regulation of gaming in Nevada was lax. The politicians liked the gangsters because they were bringing money into the state. Since everything was legal and aboveboard, the mobsters operated out in the open. But when the Gaming Commission was established in 1958 and tough rules were put in place, the mobsters were driven underground. That's when skimming became a big deal. The irony: the Gaming Commission's rules were like Prohibition to alcohol in the Twenties--lawlessness resulted from new laws.

Thanks, all of you.