I guess the Mafia looks a blind eye at this kind of activity much like they turn one at the drug business. I would have hoped that this wouldn't be tolerated.
In the end, it really does come down to the money. Paul and other guys were recorded on tape badmouthing DB about being in the porn business but that never stopped them from taking money from him.
However, Nino Gaggi did come down on Roy DeMeo for trafficking in child porn. In fact, he threatened to kill him if he didn't stop. Roy had been involved in the regular porn business for a while but he argued that "was the way the industry was going" and they "couldn't stay competitive" if they didn't adapt. But DeMeo made him quit anyway.
