How can gambling get defendants in trouble with the RICO Act?

On Behalf of | Jan 16, 2025 | Federal Crimes

The Racketeer Influenced and Corrupt Organizations Act (RICO) is a powerful legal tool originally designed to combat organized crime. Over the years, its application has expanded significantly, encompassing a wide range of unlawful activities, including those related to gambling.

Gambling is legal and regulated in New York State for individuals who are 21 years and older. However, it can lead to severe legal consequences under the RICO Act when tied to organized crime or illegal practices. Understanding how gambling intersects with RICO violations is essential for anyone involved in the industry or its activities.

Illegal gambling operations

Engaging in or profiting from illegal gambling activities is a straightforward way gambling can become entangled with RICO violations. Illegal gambling enterprises often operate without proper licensing or regulatory oversight. For example, unlicensed bookmaking or underground casinos could be viewed as predicate offenses under the RICO Act. If an illegal gambling operation is linked to other crimes, such as tax evasion or money laundering, prosecutors may pursue RICO charges.

Connections to organized crime

Historically, organized crime groups have used gambling operations to fund their activities. This can include involvement in rackets such as:

  • Loan-sharking tied to gambling debts

  • Fixing outcomes in sports betting

  • Controlling illegal gaming enterprises

Such illegal gambling activities can draw the attention of federal authorities. When an enterprise’s gambling-related activities are tied to broader criminal schemes, such as drug trafficking or extortion, the entire network may face RICO charges.

Money laundering through gambling

Legal gambling establishments can also become problematic when used to launder illicit funds. Criminal organizations might use casinos or betting shops to disguise the origins of illegal money. By blending illegal proceeds with legitimate gambling activities, enterprises can make dirty money appear clean. This conduct violates anti-money laundering laws and supports a pattern of criminal activity that could trigger RICO liability.

Cybercrimes and online gambling

With the rise of online gambling, cybercrimes have added another layer of complexity. Unlicensed online gambling platforms may facilitate crimes such as:

  • Fraud

  • Identity theft

  • Illegal money transfers

RICO charges may apply when these online platforms are part of a broader criminal network.

While gambling can be a legitimate form of entertainment or business, its connection to illegal activities can lead to serious legal trouble under the RICO Act. Anyone operating in or engaging with the gambling industry should enlist legal guidance to help ensure compliance with legal and regulatory standards.