How Do Underground Casinos Work and Earn a Profit
In today’s world, illegal gambling is still a very profitable venture. It involves a serious risk with law enforcement working grueling hours to shut it down. No matter how hard they try, you can still find illegal casinos in many states. What with tax evasion, they generate greater profit that keeps them in business for as long as the authorities don’t notice them. And it seems that they use the fact that some states prohibit gambling to their advantage.
Namely, one can always find those who’ll do anything for an adrenaline rush. If their state laws ban it, then they’ll move mountains in order to participate in casino gambling. They’ll spin the reels on a slot machine in a smoky room without considering how dangerous this might be. And trust us, it can be risky for all those involved. These venues won’t provide a safe haven like those in Las Vegas would. Basically, you’re left to your own devices if you encounter any issues. Regardless of this, some gamblers find them thrilling much to the delight of the operators.
And if they want to work and attract players, there are many things they need to mull over. Yes, the most important one would be to lie low, but there are other things to consider. For instance, they have to locate the venue which will host their escapades. Also, they need to decide on how to accept bets and expand their player base. Only when they have this figured out do some of them start their adventure. So, how do underground casinos work? We’ll endeavor to answer this question in more depth below.
The Definition of Underground Gambling
Before we begin, let’s see how the law defines illegal gambling:
- It is in violation of particular state law;
- More than 5 people participate in it;
- It has been in business for more than 30 days;
- An operator earns $2,000 or more each day.
Now that you’re familiar with this definition, we can move on to the essentials.
The Beginning Phases
In all honesty, literally anyone can wake up one day and decide to open an illegal casino. Its location and surroundings don’t need to be extravagant or anything out of a spy movie. In fact, you’d be surprised by how many gamblers would be satisfied with playing in an ordinary house. Knowing this, some do host these games there. In most cases, the reason for this is that they don’t arouse suspicion as, say, an opulent hotel room would. There are those who follow this logic: the subtler the location, the better.
What’s more, those who decide to venture in this “business” need to take certain roles. These are assigned so that everyone does their fair share of the job. And illegal operators often end up involving just a small number of people. The reason for this is that they want to reduce any potential risk. They feel that fewer individuals might not threaten the whole operation. In other words, if a lot of people know about their business, they might mess it up — especially if a lot of money is involved.
Furthermore, in these beginning phases, it’s paramount to find the person who’ll oversee all bets in an underground casino. More often than not, this is the ring leader whose sole purpose is to take care of the money. Then another individual should manage the process and keep a close eye on all the illegal games they offer. After all, their goal is for everything to go off without a hitch. Others are there to attract more players, collect their debts, or even process the wagers.
If they want to organize a high-stakes poker game or appeal to slots aficionados, ring leaders have to worry about the finances. And how much money do they need? Well, it’s essential to have enough to cover all the wagers and potential losses. And they get that money in different ways. Some apply for bank loans claiming that they’re preparing to open a business — omitting the illegal part of it, of course. Others approach mobsters and worry about repaying them later on.
Admittedly, some illegal gambling rings can be established in the guise of a company. As a case in point, we’ll mention one that was worth a staggering $5 billion in Texas. Back in 2013, Albert Reed Jr was running a firm “Global Internet Corporation” in this state. Through this company, he would accept online wagers from his customers. All they needed to do was secretly log in using the websites he had given them. During this time, Albert would pose as a consultant all the while being in charge of an illegal operation. In the end, the police confiscated more than $10 million in property — even a signed Tiger Woods memorabilia made the cut.
How Do They Accept Bets?
Although against the law, nothing stops ring leaders from accepting wagers in their respective casinos. Players can place their bets in different ways. If they want to wager on a sporting event, some allow them to do so over the phone (which doesn’t go well with the laws of the United States). In this case, they would visit their customers in order to take the money or give them their winnings. The ultimate casino gambling experience, huh?
In contrast, some large-scale casinos operate in a more sophisticated way. For instance, as the case from Texas shows, they can create complex login processes which are familiar only to those who want to bet. They use an encrypted network, and law enforcement is less likely to track them down.
How Do They Earn Money?
Apart from posing a question “How do underground casinos work,” many wonder about their revenue too. Well, many underground casinos are immensely profitable. Mainly, this is because of their illegal nature — those who run them don’t pay any taxes. They work outside the realm of the law which, over time, is extremely financially rewarding. For instance, there’s a levy of 6.75% in the United States on any gambling profit. This means that some large-scale Nevada casinos have to pay millions of dollars in taxes. As you might have inferred, they’d generate even more money if they were conducting an illegal business.
In addition, apart from not paying taxes, they can impose a rake or some other fees that you wouldn’t find in a regulated casino. A rake is a commission fee which you might find in an underground poker room. It ranges between 2.5% to 10% of the pot in most cases. This imposed rake, together with tax evasion, is enough to create a multimillionaire business. Some don’t stop here and come up with new ways in which they can take money from passionate gamblers.
Underground Casinos — A Tale as Old as Times
In the past, people probably thought that the rise of legal casinos would put a stop to those working illegally. However, they’ve been proved wrong, and even law enforcement finds it difficult to shut them all down. Perhaps the future might bring a close to them. For now, some associate casino gambling with them, and are put off by the regulated venues.