Why Are Underground Casinos Illegal Across the States

Unbeknownst to some people, certain individuals make billions of dollars outside the law across the United States. We’re talking about those whose source of income comes from illegal gambling — a thriving industry which no one can stop, not even law enforcement. This world might paint a picture of mobsters, threats, and bookies. But trust us, this image has become so old-fashioned that you’d be surprised. With the development of technology, one wouldn’t even need to visit illegal venues today — they have become much more accessible. Namely, anyone can use a computer to bet outside the law now.

So, why are underground casinos illegal? Understandably, every state laws are against them. The main reason is that they aren’t within the government’s control or anyone’s for that matter. As no one is overseeing them, they can get away with pretty much everything. And without being on a tight leash, they organize casino games and generate substantial profit which is made even greater by the fact that they don’t pay any taxes. There’s no 6.75% levy here like the one you would find in a regulated Las Vegas casino.

Furthermore, there’s no regulatory body that would protect gamblers while they’re playing illegal games. If you wager and you end up getting cheated, then there’s not much you could do about it. It’s not like you could turn to the authorities for assistance — you’d be left to your own devices. Also, no one is overlooking the games in an underground casino which means that there might be a possibility that the results aren’t fair. These are some of the things we take for granted while being in a regulated casino.

The Exploitation of Problem Gamblers

Another reason why they’re illegal is that they don’t comply with any ethical codes of conduct. It’s unlikely that any ring leader would think about helping problem gamblers. In fact, some experts believe that they profit off of them the most. Instead of promoting responsible gaming, they are more keen on earning money. You won’t find any self-exclusion program here — the more you wager, the better it is for them.

In contrast, the state’s casinos focus their attention on this subject. You can even catch some operators in, say, Atlantic City who are shedding light on this issue, as any sane individual would do. And those running unlicensed casinos wouldn’t even bat an eye while accepting bets on sporting events from compulsive gamblers. This is why these individuals should avoid illegal gambling houses.

Commission Fee

The authorities are against one more thing — commission fees. These are yet another indication that people are violating federal law. In other words, collecting rake is prohibited in the United States. For instance, some operators decide to impose a rake during a poker game. In each hand, they take about 2.5% to 10% of the pot. If you were to ask some ring leader, they would defend this fee by saying that they need to earn some money as well. Admittedly, some do use it to cover for operating expenses.

In this seedy gambling industry, they can also come up with other house fees while not having a proper license. Some resort to selling food and drinks to their players. Others decide to expand their horizons by offering games that have a built-in house edge. So, they include craps or blackjack. This would be in addition to collecting rake and generating profit from other fees. No wonder that this is a billion dollar industry!

What Constitutes an Underground Casino?

This heavily depends on the state laws. In many states, illegal gambling needs to meet three criteria to be called this. Firstly, it has to be operating for 30 or more days. Secondly, it needs to have a revenue of at least $2,000 per day. And lastly, 5 or more people should be running the casino. In some parts of the US, this isn’t enough to define an illegal activity. The authorities would need to find some physical evidence including devices used for gambling in order to punish someone.

However, some jurisdictions aren’t keen on targeting these rings. More often than not, hosts and players worry about armed robberies more than about getting busted by the authorities. This is another issue that you’d face if you decide to visit an underground poker room. Thus, approach these rings at your own risk.

The 3 Cs

In California, the law perceives a particular premise as an underground casino based on three things. They refer to it as the 3 Cs:

1. Conspicuous — it’s in the public eye. People are aware of it either through word of mouth or by other means. And it’s attracting many players;
2. Commercial — it’s making a profit. For instance, either by imposing a rake or other house fees;
3. Criminal complaint — someone has to lodge a complaint against it and, thus, encourage the authorities to investigate it.

They Attract More Crime

Whatever your stance is on legal gambling, research indicates that it produces less crime than the illegal one. There are numerous reasons for this. It’s understandable how and why an illegal venue attracts more violations. Namely, some visitors might feel uninhibited and believe that they can do whatever their hearts desire. For instance, one article detailed a young woman’s experience in an underground casino. By her own admission, she was fired as she refused a player’s advances which didn’t make her employers happy. They dismissed her on the spot and didn’t want to protect her.

This particular example shows that some operators accept this kind of behavior in order to earn money. And the mere existence of an illegal operation indicates that authorities aren’t exactly keeping an eye out. According to some experts, this place also attracts active criminals who are enjoying the possibility of playing casino games. And if you ruffle their feathers, then it might end badly.

Legal vs. Illegal Casinos

A long time ago, people believed that the only way to put a stop to illegal gambling was by introducing more legal casinos. That way, they thought that gamblers would be put off by the former which, in turn, would stop its expansion. Sadly, they were wrong. According to some experts, players are aware of all the attendant risks illegal venues bring. Yet, some of them think that it would be “cooler” to visit them instead of regulated ones.

In addition, illegal casinos accept those from all walks of life. They won’t exactly deny someone entrance if they come from an organized crime group. And if you’re out of cash, they might even loan you money (and charge higher interest, of course). Also, if a state prohibits any kind of gambling, except for lottery games, it’s self-explanatory why someone would visit an illegal casino. One could even find slot machines hidden in the back of a smoky room or in the basement of a building.

Banned for a Reason

In conclusion, we hope that the above was enough to answer the question “Why are underground casinos illegal”. The authorities are going to great lengths to eradicate them, but their mission would be successful if players would stop paying attention to and visiting these venues. Here’s hoping that the future will bring this.