Most of the underground gambling rings in New York are owned and operated by crime families. These gambling rings offer high stakes poker games and sports betting whose proceeds are wired to Costa Rica. Additionally, these gambling rings create an atmosphere of drugs and prostitution that is not present in Vegas-style casinos. There are about 200 underground gambling dens operating nationwide, and 47 are in the Bangkok metropolitan area, according to a government panel, set up last month to investigate the potential involvement of officials in the gambling operations, which became outbreak hotspots earlier this year.

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Placing bets via the shady realm of underground and unlicensed sports betting has never been a pleasant or safe experience. There are two places to bet on sports comfortably and securely: casinos and licensed online sportsbooks.

In this article, we explore how the illicit black market of sports betting functions, and speculate how widespread it really is. If you’ve ever been curious how sports bettors gamble in the back rooms of the world, read on.

Bookies, Oddsmakers, & Managers: Oh My!

It’s important to note that illicit operations like these are secretive and complex, and often have ties to organized crime. As such, they are super murky, and determining exactly how they operate is next to impossible (After all, it’s not like they go public with the information!). Despite that, the general structure of underground betting rings is relatively well-known and clear.

There are three different levels of a standard underground betting operation: the bookies, the managers, and the oddsmakers. The bookies are on the lowest rung of the betting ladder, while managers are the middlemen. Oddsmakers are the ringleaders of the entire operation, and they comprise the highest level of the operation.

What Do Bookies Do?

If you’ve seen any mob movies or television shows, you’re probably heard the term “bookie” tossed around. Quite simply, it’s a shorthand term for “bookmaker.”

Bookies collect bets from sports bettors and distribute the winnings. They’re responsible for the grunt work of laying wagers and distributing payouts for their superiors, as well as communicating the odds and selection of available bets.

Unlike online sports betting, underground bettors can’t learn about odds or bets for specific events unless it’s via word of mouth. Undercover betting operations don’t have websites which list available odds, nor do they have brick and mortar locations like Vegas sportsbooks.

What Are the Roles of Underground Managers?

Bookies report to a manager, whose role is to collect money from the bookies and inform them about the odds and available bets. This allows bookies to communicate information directly to bettors on the ground (It should be noted that bookies never meet, and rarely know who the ringleaders of the entire operation are).

Managers are an essential part of the underground betting process, serving as the barrier between the bookies and oddsmakers. If a bookie is arrested for their participation in an underground betting ring, this separation keeps the top of the pyramid from being implicated.

The Highest Level: Oddsmakers

Oddsmakers are the top of the pyramid, issuing orders that both the managers and the bookies follow. As their name implies, oddsmakers decide the odds and types of bets that are accepted from sports bettors. This is the most critical part of any betting operation and comprises the most significant part of the oddsmakers’ responsibilities.

Oddsmakers are also responsible for supervising and directing the managers beneath them. They assign managers to specific neighbourhoods or regions, and issue directives on how many bookies they should keep under their employ. In a sense, oddsmakers are no different than senior managers within any traditional business.

A key aspect to note is that the very nature of the structure of underground betting rings makes it very difficult to stop them. Oddsmakers typically don’t know the bookies who work for them, and bookies often have no idea who is calling the shots. This separation between the highest and the lowest level of underground sports betting rings makes it difficult for law enforcement to make any meaningful arrests.

Underground Sports Betting and Organized Crime

Underground sports betting operations are often linked with more nefarious operations. Because of this, underground sports betting isn’t a victimless crimes, with profits often diverted to more sinister activities under the umbrella of organized crime. This could be arms trading, drug dealing, prostitution, and various forms of financial fraud

These operations gravitate towards organized crime due to the protection it offers. Because underground betting isn’t licensed or regulated, it falls beyond the purview of the law. As such, many of the protections that licensed sportsbooks enjoy aren’t afforded to underground betting operations.

Organized crime serves to protect the money involved in underground sports betting operations. This can include physical violence to prevent bookies from being robbed obtain prompt debt payments from bettors.

Thanks to KYC (Know Your Client) and AML (Anti-Money Laundering) laws, money from underground sports betting cannot be deposited into a bank. Both of these laws require by law that banks must report any deposit over $10,000, in order to prevent banks for storing the funds of criminals. As such, the money from illicit sports betting operations is not then deposited into banks, it is instead stored in cash.

Due to the scrutiny of banks, underground sports betting operations handle all bets in cash, as it is untraceable. This certainly comes with an associated security risk for the bookies, managers, and oddsmakers. Holding cash isn’t nearly as safe as having money inside the secure confines of a bank. However, this is a risk that underground sports betting markets must run, as they have no other option if they want to avoid detection by law enforcement.

Why Do People Turn to Underground Betting Markets?

You might be wondering why, given so many legitimate available options online, people still turn to underground betting markets. In many cases, turning to underground betting markets is often related to a lack of knowledge related to safer, more legitimate ways of placing sports bets.

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Secondly, sports betting still has a stigma attached to it. Underground betting markets are wholly confidential: you pay in cash and get paid out in cash. You don’t have to provide any identification whatsoever.

Finally, unlike licensed online sportsbooks, many undercover betting operations allow you to borrow money to make sports bets. A licensed sportsbook would never act as a bank. Underground sports betting operations understandably prey on sports bettors with addiction problems. These predatory lenders offer loans are accompanied by incredibly high interest.

We’ve all seen the movies: Owing money to an entity even tangentially-related to organized crime is never a wise move.

How Big Is Underground Betting in the United States?

According to the American Gaming Association, nearly 20% of the entire international sports betting market is wagered through underground betting channels in the United States. The remaining bets go through legitimate channels, either through licensed sportsbooks or government-sanctioned sportsbooks within casinos.

Interestingly, 25% of the total betting volume in underground operations takes place in New York and California.

Why You Should Use an Online Sportsbook

Unlike the black market, online sportsbooks offer consumer protection.

While bookies do pay out bettors more often than not, they aren’t legally obligated to. The only guarantee a bettor has with their bookie is one of mutual trust. There is no record of any transaction taking place whatsoever.

If bets go disastrously wrong for bookmakers, a bettor has no higher authority to appeal to. Bettors only know their bookie, and they certainly can’t contact the police or a bank. Additionally, it’s best not to make a fuss when dealing with a shady organization related to organized crime.

Lastly, bookies occasionally orchestrate match-fixing in sporting events, in an effort to defraud sports bettors. Unregulated and unlicensed bookies are only looking to make a profit. They don’t care about fairness or integrity.

It is funny to think that, up until the 1600s, all gambling that took place anywhere in the world would have been classed as illegal. Sure, it definitely existed; however, the state was rarely involved, meaning that gambling taverns and such throughout history often weren’t the safest of places. Nowadays, of course, gambling is anything but illegal, and it actually makes up a fairly sizable portion of the tax revenue that governments depend on across the globe. Whilst pretty much all gamblers will agree that the casino conditions in the present day are much better than that of the early days of gambling where it had to be done strictly in secret, the bad side is that there are now an almost infinite amount of regulations to get your head around. Ultimately, these are all put in place to protect gamblers as well as legal operations like Swedish casino but it can still be an annoying framework.

Hence, many avid gamblers are still seeking to experience their hobby without the somewhat strangling grasp of the various betting regulations we see these days. But this is easier said than done – government clampdowns on illegal gambling have steadily risen over the years, probably because the money in the industry continues to skyrocket. Still, it is entirely possible to gamble without the restrictions put in place by government entities and the like; however, you must also be aware that this is an illegal practice and could have serious consequences. Gamblers who are willing to take the risk will want to head to what many people call an underground casino; a place that the long arm of the law is yet to find. But what actually goes on in these places? Read ahead to find out.

What Exactly Are Underground Casinos?

So, what exactly are underground casinos? Well, they are certainly not just casinos that happen to exist underground, although we are willing to bet that many of these places are, in fact, literally underground. The term underground casino is usually given to any gambling establishment that remains off the beaten track and, of course, exempt from any of the legal frameworks that govern genuine legal casinos.

As you might imagine, these places are generally rather dingy, taking the shape of an underground cellar or secret backroom in a bar. One thing is certain: underground casinos are leagues away from the decadent beacons of luxury one can find in places such as Las Vegas, Monte Carlo or Macau. The trade-off, however, is a gambling experience unaffected by regulations, something that means that some scarily big jackpots can be obtained.

A History Of Illegal Casino Gambling

In order to properly understand what goes on in underground casinos today, it is well worth taking a step back and looking into the history of illegal casino gambling. As we explained in the introduction to this article, gambling at one point was illegal pretty much everywhere on Earth; so, funnily enough, even the origins of legal gambling can be traced back to breaking the law. The first time illegal gambling became a proper entity in its own right, however, was during the 1800s, where most European countries outlawed gambling, sending all the official casinos underground, or to places like Monte Carlo.

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Similarly, in America, at the start of the 20^th century, gambling was outlawed across the country – something that proved to be integral to the illegal gambling explosion. Did you know, for instance, that the first slot machines were all created illegally? In fact, Charles D. Fey, the inventor of the Liberty Bell slot, could not even patent his invention for fears he would be prosecuted. Illegal gambling, therefore, has always been around; however, the underground casinos of the 21^st century are able to take in a lot more money than ever before.

Underground Casinos & Gangs

One of the biggest problems associated with underground casinos is the fact that they regularly become a hotbed for criminal gangs. You must have heard about the extent of the Mafia and other gangs’ involvement in Las Vegas around the 1950s and 1960s. They pretty much ran the casinos in this period, something that still happens in underground casinos today. Now, the problems of this are tenfold, but the biggest is the fact that these illegal gambling operations often fund a gang’s violent behavior.

Underground casinos are also the perfect place for gang members to go and gamble with their dirty money, as they would not be able to do so in officially governed casinos. This, in turn, keeps the black market economy rolling, something that can only really be a bad thing.

Money Laundering

As a fallout phenomenon, underground casinos can also be used as money laundering centers, although they are usually just the first stage in the process, as money made from illegal gambling is also illegal. Regardless, these places are still the first point of call for many criminals that are trying to clean their money, providing a pretty indispensable service.

This is actually one of the main reasons why the authorities put so much effort into stamping underground casinos out. Without them, gangs would struggle to launder their cash so effectively.

Fewer Slot Regulations

It is far from uncommon to find underground casinos that just resemble huge slots halls, but the difference here is that these slot machines are often rigged so that they don’t have to adhere to the very strict slot regulations set out by the gambling commission. This means that there are no maximum line bets, for instance, something that consequentially results in some huge jackpots.

The bad side, however, is that without these slot regulations that are ultimately put in place to protect the gambler, slot machine players can get taken advantage of. There is no way of knowing if the slot machine you are playing is a fair play, for example. Moreover, you can never guarantee that you will actually get your well-earned money at underground casinos, as there are no authorities to ensure this happens.