i know this might seem dumb, but ive read so many articles about bookmakers or “bookies” (handling bets for horse races and stuff like that) who get arrested for what they’re doing. Are the bookies stealing money? Or are they not placing the bets? I have no idea how this works and have always wanted to know how they steal money or what exactly it is that theyre doing thats illegal?
In: Economics
Gambling is considered a vice. So in most places it’s legally restricted to those who have purchased a gambling license from the state. Does that stop all illegal gambling? No, of course not.
Because most illegal gambling generates huge revenues, and because it’s an all cash business, it’s often run by the mob, and it’s easy to mix in other illegal revenues, like from extortion or drug sales. That makes it an easy target for politicians and cops who like to get on TV and say “This is an example of how we are cleaning up the streets.”
Then the third problem is that if illegal bookmaking is left unchecked, the potential for abuse of the sport is always there. A bookmaker collects a commission from each bet he takes, called the “vig” and so he doesn’t care who wins or loses. He tries to keep both sides balanced by using odds to give bonus points or other consideration to the weaker party. That encourages people to bet on the weaker team. [In this article](https://bleacherreport.com/articles/1325680-vegas-records-highest-point-spead-in-college-football-historyagain), Savannah State, a very very weak team, played Oklahoma State, a very strong team, and so the bookmakers gave Savannah State a 67.5 point bonus to their score. So if you bet on Savannah State, and they score 10 points, and Oklahoma State scored 77, then you would still win the bet, because you got a bonus which brought you up to 77.5 to OKState 77. But in reality they lost 84-0 so even that 67.5 point bonus did not help the people who bet on Savannah State. Which brings us back to the bookies. Since everyone probably bet on OKState, the bookies will have to pay out all the winnings from their own pocket if the amount of betting on both sides isn’t balanced. If things go really wrong and there is absolutely no balance, no matter how many bonus points they give to the weaker team, this could wreck a bookie’s organization which has led them to bribe the stronger team to take a fall and purposefully lose. It doesn’t happy in football so much but it has happened in boxing a lot, happens in horse racing, and it happened with the Chicago Black Sox scandal. So having unregulated bookmaking can lead to corruption, cheating, and throwing contests when the bookmakers start bribing people because they don’t want to lose millions of dollars. So for that aspect alone it’s good to prevent illegal bookmaking.
And there is nothing to say that it can’t happen with state sanctioned bookmaking to, but there is much more oversight, and there are much more resources and deeper pockets, so one misstep won’t be catastrophic to a legal Vegas Sportsbook, but it might be to some mob guy in Brooklyn.
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