Illegal Gambling – criminals onto a winner
At dawn on 15 October 2010, in an operation named “Poker 2”, police carried out raids in various houses and establishments in cities across the country. The operation led them to charge 498 people with numerous offences relating to illegal gambling. The criminal enterprise included 500 betting points of sale, extensive legal and illegal online gambling network and the use of frontmen to acquire regular gambling licenses. The equivalent of US$ 5.5 million (EUR4.0 million; GB£ 3.4 million) worth of goods and property were confiscated.

A week later, the police entered a small shop after becoming suspicious of the amount of people constantly going in and out throughout the day and found an illegal sports betting outfit, equipped with PCs, laptops, industrial printers and TV monitors on the wall. On the same day and in the same city police found video poker machines in a bar without the necessary licences.
Where did these three episodes (among the hundreds that occur on a monthly basis) take place?
Not in Eastern Europe, Mexico or China, but in Italy, one of the most important gambling and betting markets in Europe. 

In 2010, the Guardia di Finanza (GdF), the Italian financial police, closed 1,918 illegal gambling establishments, an increase of 166% from 2009. In the same period 8,347 people were charged for 6,295 violations regarding illegal gambling. The GdF and the Ministry of Economy and Finance (which controls the GdF) estimate that the Italian illegal gambling market’ turnover is between EUR12 billion to EUR20 billion, while the legal sector’s turnover for 2010 was over EUR61 billion.
Italy has three powerful criminal associations: Sicilian Cosa Nostra, Neapolitan Camorra, and the less well known Calabrian Ndrangheta. These criminal organisations and their associates control a significant part of the illegal gambling industry and at the same time also have returns from illegal activities linked to gambling, such as money laundering and loan sharking. 
In a report released in November 2010 by the Anti-Mafia Commission of the Italian Parliament, it was noted that the Mafia and other crime syndicates did not lose the chance to be involved in legal and illegal gambling activities, particularly due to the high liquidity involved, which makes the sector particularly appealing as a vehicle to clean money obtained from other criminal activities, particularly drugs, human trafficking, prostitution and racketeering. At the same time, involvement in legal gambling activities allowed organised crime to amass a considerable amount of financial means that can be reinvested in criminal activities. 
The legal activities that criminal syndicates are keen on are managing bingo halls, small “corner” betting outlets (especially in territories controlled by organised crime) and Internet gambling. Illegal gambling activities tend to involve managing unauthorised slot machines or imposing their authorised machines on legal license holders, illegal casinos or gambling dens and illegal horse and sports betting, and obviously online gambling.
As if organised crime was not enough, legal licence holders of slots and VLT’s tamper with their gaming machines, or do not link them to the central server of the regulator, to avoid paying out customers and the tax authorities. The GdF seized 3,700 irregular gaming machines in 2010, but it estimates that there are another 200,000 in Italy.
The authorities have responded by strengthening the powers of AAMS, the national gambling regulator, reinforced controlling activities and made the punishments for offenders more severe. 
The punishments range from the suspension of gambling activities and revoking licenses for license holders up to 1 year in prison for organisers and three months for players. There are also a range of stern financial penalties for transgressors and tax evaders. Undoubtedly, the tax revenue lost by the Treasury in these difficult economic times have given the government incentive to issue legislation that prevents illegal gambling.
But the question is why do people bet illegally when there is such a diverse range of products on offer in the legal market (the National Council of Economics and Labour estimates that there are more or less one million illegal gamblers in Italy)?
The most likely answer is that the odds and prizes in the illegal market are more appealing to customers, even if the company is not. The operators in the legal market can’t compete with criminals because of the market entry fees, dues and high taxes imposed on them. So the legislators lose revenue to organised crime, legal operators pay out lots of money to the Treasury as well as losing customers to criminals.
The Mafioso seems to be onto a sure thing.