Interference (63 page)

When I asked Schettler whether legalized sports gambling outside of Nevada would hurt his business at the Stardust, Schettler replied, “I really don't think so. The more sports books that open up, the more business I'm going to do. When I came here to the Stardust, there were no books at this end of the Strip. Now, we're surrounded by seven books. Between now and then, the hotels saw people coming over to the Stardust to make a bet. And so the hotels decided, ‘Well, let's put a book of our own in.' I do even more business now because gamblers shop for numbers. In other words, if I have a game at seven and across the street the same game is six and a half, that is going to create business.”

Surprisingly, oddsmaker Michael Roxborough, Bob Martin's successor, is skeptical of widespread state-controlled sports gambling and told me, “There are a lot of reasons why I don't think you're going to see legalization. The main reason is that there's no revenue in it. You go to sports books here in Las Vegas, and they're jammed. But they're holding only two and a half percent. That's their win for the year. Look at the gross win in the business. It's not very high. In fact, it's incredibly low.

“Suppose a state goes to legalizing sports gambling. There's only one reason that they're going to do it: so that they can extract revenue from it. If they want to be competitive, they are going to have to go out and get independent operators to run the business for them. And if they do, all they can do is tax part of their gross win. If they do it like they do in Nevada where they tax six percent of the gross win, there wouldn't be enough money in there at the end of the year to pay for their regulation. If they go out and try to run it themselves, à la pari-mutuel—and they extract eighteen to twenty percent out, like they do at the horses—then they're not going to be able to compete with the illegal bookmakers.

“Suppose that a state decides that in order to make any money on it, it will go with six to five on football or even thirteen to ten. That's the way the state mentality works. If you take a look at the lottery, they're only returning about forty percent of the money to the winners. Suppose they charge thirteen to ten on a football game instead of eleven to ten. What they're going to do is whet the appetite of a lot of people who want to bet football. And after a while they're going to learn how to bet football, and they'll discover that thirteen to ten isn't so good—and that an illegal bookmaker will give them credit and eleven to ten.

“I think another dilemma with it is that you have to consider that if every state has sports wagering you'll literally have some people betting a million dollars on a game. And then you just have to ask: How will this affect the integrity of the game?

“You know, I'm not against it. I just don't think it would work.”

Handicapper Mort Olshan of
The Gold Sheet
told me, “Gambling has been going on for five thousand years. We're the only Western industrial society that has this Puritan, Calvinist attitude toward gambling. But it seems to be changing. There are so many inconsistencies in the law right now. The media has created the stereotype of the gambler and bookmaker as shady characters with fedoras and big cigars, the Edward G. Robinson type. But everyone is betting with bookmakers who are just guys who wear suits and sports coats. The average gambler is a professional man. To have a law that is not respected is like having no law at all. The government is making lawbreakers out of the forty million Americans who bet. England is very civilized about it. They have gambling controlled by the state, and the system works. It is integrated into their society. It adds some fun and excitement to their lives.”

But Karl Ersin, Olshan's onetime associate at the Minneapolis
Green Sheet
, disagrees. “No, I don't support legalizing gambling. There are too many things that get into it. There are too many crooks. They do a lot of things with these games. They try to fix them. If sports gambling were legalized, you'd find a lot more of that.”

Jack Danahy, who has spent a distinguished career in law enforcement and as the head of NFL Security, is also against legalization. “They tried it in Delaware, and the state nearly welshed. In legalized sports gambling, you proliferate. You attract more people into gambling on that particular sport. Our feeling at the NFL was that gambling is inherent to horse racing. But gambling has never been inherent to football. It never has been. Nor is it to baseball or any of the team sports.

“If state officials want to legalize gambling for the sole purpose to make money for the state, I feel that this would be dangerous to the sport because
you're going to introduce more people to gambling on football. I'm not naïve enough to think that a lot of people don't bet on football. It's become a popular pastime, but let's not encourage or enhance it more.”

Ralph Salerno, who as both a law-enforcement official and private citizen has waged a one-man campaign against organized crime, favors legalizing sports gambling and told me, “Pete Rozelle [had] always been violently against sports betting. That is going to continue until the owners decide that they want some of the income and will take the bets at the stadium or elsewhere. The TV money isn't going to pay for everything forever. They're going to be looking for additional revenue.

“Absolutely, gambling on NFL games should be legalized—for the same reason you need offtrack betting. I don't think that gambling is evil. I just don't like the current management and how they use their money. I don't like the bookmakers of America—the gambling community or whatever you want to call them—and what they do with their profits. We long ago proved that you don't have to be a wizard bookmaker to be a successful bookmaker. That's the shit they threw at us when we opened OTB. They said, ‘You're going to have to go out and hire Frank Costello.' Bullshit! At that time, in 1971, when OTB was created, the most sophisticated equipment I'd ever seen in a bookmaking operation was a hand-cranked adding machine.

“The government or the private sector can use IBM or Honeywell or anybody else that makes computer hardware and software. Why can't we do what any bookmaker already does? You get someone who knows how to program computers. Then you get someone from Merrill Lynch or Dean Witter. They've been running gambling operations for years—they call it the stock market.

“In the stock market, the numbers are changing by the second. The theory here is that you can change the line by the second—to ensure that you stay within the ten percent vigorish—with a computer. The computer balances your book. As long as it keeps the difference within the vig, then the government will make money.”

When I asked Salerno about the disastrous sports lottery in Delaware, he replied, “I don't think Delaware was a real attempt. If you want to make a real attempt, you don't start in Delaware. If you could put together a national operation, then the individual states could legalize sports gambling and make money. The main problem is going to be the layoff. But if you organize it in, say, the private sector, then it can be done—with operations in several states that lay off with each other. If you keep your book close to balance, there is a ten percent fee, just like with a bookmaker. The only difference is that you have to put your money up front. There is no credit.

“If you play it right, the public will have less of a toleration for other forms of organized-crime activity. We haven't put bookmakers in jail for many years—but if it is legal, then the illegal bookmaker who operates in competition with the state should be sentenced and fined. He becomes a threat to the government—which is using the money for public needs.

“People who try to cheat the sports-gambling operation should be prosecuted just like an insider trader. It won't affect the integrity of the game. It becomes the responsibility of investigative agencies to enforce to law.

“It all just depends on who is running it. How honest are they? How closely do they watch the operation?” Former Senate investigator Phil Manuel disagrees with Salerno and told me, “Most forms of gambling, especially lotteries or numbers games, are a type of consumer fraud. Over the long haul, the sucker who bets money on lotteries, sporting events, or against the house cannot win. Many more people will lose than will win, and the only people who will reap profits are the people who control the game—whether they are part of the gambling syndicates or the political system. To raise revenue by legalizing sports gambling and other forms of gambling is to take money from those who can least afford it.”

Aaron Kohn is the most vehement opponent of legalizing sports gambling I talked to and says, “Again, I get down to the character of our country. Our politicians are under tremendous pressure from their constituencies to provide public services in a way that the voters don't have to pay for them. And what we find is that the politicians, by reason of that imbalance between demand and responsibility, in order to satisfy the demand for services, are turning to trickery in order to provide the financing. That is exactly what legalized gambling is. Legalized gambling is saying to the people that in order to have greater services the society must be induced and provided the opportunity to gamble.

“Legalized gambling is a con game. You induce people to lose their money in order to make them believe that they can be enriched.”

Gambling is indeed inevitable. And to create a complete prohibition against all forms of betting is as unrealistic as to assume that every NFL player performs at his peak level at every moment of every game. Passes will be dropped. Field goals will go awry. Blocks will be missed. But the problem for the NFL and for its fans is to ensure that when seemingly innocent on-field mistakes do occur that something nefarious hasn't actually happened. But the broader the base of legal and illegal sports gambling, the more suspicions will be raised when these errors are made and the greater the temptation for team members to fix games in order to make fast bucks.

To date, it is obvious that the NFL's public-relations machine has managed to allay the fears of football fans about threats to the integrity of the game. However, the evidence is also clear that the NFL has been more interested in covering up abuses within its system, particularly with regard to the relationships between certain team owners and a variety of underworld figures. Considering that the organized-crime gambling syndicate has always controlled the bulk of illegal sports betting, the NFL's response to this problem is sporadic and at times, deceptive.

Organized crime has not completely corrupted the NFL. However, if the situation remains consistent with the NFL's history, professional football will inevitably come helmet to helmet with a scandal of epic proportions—a scandal that will probably involve organized crime, drugs, and gambling and spell disaster for the league. Contrary to the popular wisdom, the threat to the league doesn't come from the Big Fix. The danger is far more insidious and is built on personal relations and casual contacts, as well as on business ties and friendly betting.

“There is no room for gambling in professional football,” Gene Upshaw of
the NFLPA told me. “We have to protect the integrity of the game. We don't want any doubts about why a receiver dropped a ball, a kicker missed a field goal, a lineman missed a block, or anything else that might affect the outcome of a game. We don't need that. NFL Security polices the players quite heavily, and I don't object to that. But I would also like to see that same type of enforcement and treatment of the owners.”

History has repeatedly proven that the consequences of gambling and organized crime have had a significant impact on America and its institutions, particularly in the areas of drug trafficking and political corruption. And the time has come for the American public, its elected officials, the law-enforcement community, and the media to become realistic about the problem of organized crime in America.

Unfortunately, the public has been shown little evidence of organized crime's influence on professional sports, particularly the NFL. And fans who believe that they're placing harmless and innocent bets on NFL games with their friendly local bookmakers at their corner bars should know where a portion of their money will end up after it's been laid off: in the pockets of organized-crime figures who will continue to corrupt America.

Meyer Lansky, the financial wizard of organized crime, knew perhaps better than anyone else that the successful annihilation of organized crime's subculture in America would rock the “legitimate” world's entire foundation, which would ultimately force fundamental social changes and redistributions of wealth and power in this country. Lansky's dream was to bond the two worlds together so that one could not survive without the other. Those of us who recognize the vast power of the underworld in our nation today also understand how close Lansky's dream—and our nightmare—is to coming true.

Afterword:

Moldea v. New York Times

“Moldea has reason to be upset. … [After] comparing what the book says with what the review says it says, one might conclude that [the reviewer] was some distance from Pulitzer territory.” —
Columbia Journalism Review
, May/June 1994

Introduction

In the wake of the publication of this book,
Interference: How Organized Crime Influences Professional Football
, I became the plaintiff in a major libel litigation against the
New York Times
, a dispute that began in the summer of 1989 and lasted until the fall of 1994. In the end, I lost the case—but not before a three-judge panel from the second most powerful court in the United States gave me a stunning victory and then took it away in what has been widely described as one of the most bizarre and unprecedented reversals in American jurisprudence.

In short, this was a case about the consequences of insupportable opinions—based on provably false facts, written by a reviewer with verifiable conflicts of interest—versus the
New York Times
' right to be wrong. Throughout my litigation, I wanted to force opinion writers to be as accountable for what they write and publish as news reporters already are. Unfortunately, the court's final decision in my case had the opposite effect, creating a two-tiered standard between those who write opinions and those who write news.