How the mafia controls betting and rigs slot machines

The gambling business
There is in fact no operation or investigation regarding organized crime that does not encounter criminal interference in the amusement arcade and betting industry. To name but a few: Rischiatutto, Normandia 2, Black Monkey, Jonny, Gambling, The Imitation Game, Stige, Beta, Talea, Clean Game, New Line, Criminal Games, Curacao, Fast, Elite 12 Argo, Morsa 2, Last Bet, Hermes, Calipso, Cartagine, Aemilia, Jackpot, Doppio jack, and Game over. Equally numerous are the criminal families involved, from A for Amato to Z for Zagaria, with organizations operating all over Italy, from Piedmont to Sicily.
What criminal gangs saw as an “emerging business” (Paolo Di Lauro, a camorra boss in Secondigliano, was among the first to step into the fray as far back as 2002) now represents an impressive slice of the criminal economy, estimated to be worth over €200 billion a year. Gambling is second only to drugs as the largest source of illegal income. Moreover, as confirmed by Catanzaro’s deputy state prosecutor Vincenzo Luberto, one of the most effective magistrates in the fight against the ’Ndrangheta, “some criminal bosses involved in drug trafficking have shifted their investments to gambling because it is more profitable and less risky”. He was undoubtedly referring to supergrass Rocco Femia, a top mafia boss who, from his base in Emilia Romagna (where he was obliged to move by court order), controlled the whole gambling industry supply chain, from slot machine manufacture to arcades. According to the testimonies of some of his former associates, he succeeded in having over 2,500 rigged slot machines installed all over Italy.

Programmers
Precisely for this reason, Femia is expected to provide the names of foreign producers and programmers in Romania, Bulgaria and other Eastern European countries who are doing business with the Italian mafia. One of their main areas of activity is the illegal slot machines that have been flooding into Italy over the last couple of years.

These devices are very similar to those authorized by the state monopoly, but are not connected to the computer network of Sogei, the IT company of the Ministry of Economy that monitors every slot-machine game played. Femia may also clarify the role of his brother and right-hand man Franco, who is currently out of jail but still has, according to insiders, interests in the gambling market.

That the mafia used money from illegal gambling to subsidize criminal bosses and their families had been clearly stated in late 2014 by Salvatore Venosa, a former affiliate of the Casalesi gang, who later turned state’s evidence, and confessed to the public prosecutor that: “The money needed by the Casalesi to maintain maximum security prisoners came exclusively from slot-machines. To give you an example ... The machines installed in commercial establishments between Casale and San Cipriano alone provided €17,500 for Francesco Schiavone, aka Sandokan, €3,500 euros for his son Nicola Schiavone and €5,000 for Giuseppe Caterino.”
Big business
The figures regarding the mafia’s hold on the gambling market speak for themselves. Revenue from gambling as a whole (slot-machines, lottery, bingo, betting, horse racing, etc.) rose from €96 billion in 2016 to €101 billion in 2017. The final figures will be published in June by the Administration of State Monopolies, but the trend is constantly growing, and seems immune to crisis. The surprising fact is that slot machines alone account for about half of this. Lombardy tops the table in terms of turnover and total number of slot machines, albeit with lower figures than the previous year (due to the 2016 budget, which imposed cuts).
Criminal organizations were quick to realize the potential of the industry, and since 2004 (the year when slot machines were regulated) have exploited it to the full. They have done so through various channels: from the management of slot machines (each capable of generating an income of up to €1,000 a week, as found in Caltanissetta), the control of betting shops, and clandestine gambling, to the creation of gaming software, protection money from arcades, and money laundering through the purchase of winning tickets. They adapt to changing, and increasingly stringent legislation, as we will explain in this three-part video investigation.
How the structure is organized
The first part of our investigation is dedicated to slot machines, who produces them, how they work, how the criminal organizations have moved into the field, and how it is possible to rig winnings. Rosa Amato, former boss of the Amato gang and today a supergrass, explains how and thanks to whom she managed to impose the use of cloned slot machines in the Caserta area. An authorized machine would be connected to the state-controlled network (which records every game played and calculates taxation accordingly), but installed in an out-of-the-way position. Another, seemingly identical machine, meanwhile, would channel money directly into the coffers of the mob. “Today, criminal organizations have realized that it is better not to rig authorized slotmachines in order to change their percentage of winnings,” [by law each machine must return 70% of the money played in winnings – a share that in the past the mafia was able to reduce, keeping the difference for themselves, Ed.] explained Roberto Mazzuccato, co-founder of MAG Elettronica, one of the leading manufacturers of slot machines in Italy, with offices also in South Africa. “Take for example what is happening in Turin, where we have noticed that when legal machines are withdrawn due to state-imposed cuts, anonymous slot machines of foreign manufacture start to pop up everywhere. They are not connected to the official network and therefore are not monitored.”
In addition, there is the complicity of people who are not actually affiliated to the mafia but are essential to this business, such as software experts who are able to alter operating systems and create parallel gambling networks. These people are so valuable that criminal organizations have set up their own network of programmers (currently almost all foreign) that if necessary they “lend” to each other. According to public prosecutors, Gino Tancredi, better known as “the King of poker”, was one of them. He is the one who introduced online poker in Italy, a business that brought him €18 million a year. His story is intertwined with that of Rocco Femia, with whom he entered into an agreement for the supply of software worth €2 million. Femia paid up without batting an eyelid, and would go on to set up joint ventures with the Sicilian mafia and the camorra of the Casalesi gang to a achieve a monopoly on gambling in Italy. “I was arrested at 3 o’clock in the morning because I was considered an occult partner of Femia,” said Tancredi. “But many of those who worked with me and did jobs for Femia are now working for legal gambling companies such as SISAL or Lottomatica. Sace, the company that produced the game cards on behalf of the boss, has now been taken over by the Austrian colossus Novomatic. Do you have any information on where the millions of euros from that takeover ended up?”

Takeover
The takeover took place on 1 January 2016, when the company announced that “Novomatic has acquired one of the leading producers of game cards in Italy in order to complete its production business with a well-known, specialized product that responds to the needs of the Italian market. At the time of the takeover, the owners were requested to sell real property owned through a demerger to the newly-formed Save Immobiliare s.r.l., since those assets were not of interest.” In Acilia last February, tax police seized assets worth €23 million from Mario Iovine, known as “Rififì”, of the Casalesi gang. He managed Rome’s entire betting market together with the brothers Sergio and Sandro Guarnera, simple game card installers who went on to become the main business associates of both the camorra in Caserta and the mafia in Ostia, first of the Falciani and then of the Spada gangs. Here too, the pattern was repeated: an obliging businessman in the sector (Mauro Carfagna, manager of four arcades in Ostia Lido, and married to Raffaella De Santis, whose family produces and distributes electronic entertainment devices), a criminal group capable of imposing the installation of a certain type of gaming machine, and finally control over the winnings, a failsafe way of laundering money. “Owning an arcade also means being able to easily launder dirty money,” explained Carlo Cardillo, a senior officer in Italy’s tax police, the Guardia di Finanza. Every time the winner of a large sum goes to the counter to collect their winnings, the mafia has the opportunity to buy the winning ticket from them, perhaps even paying a surplus. This way they have fresh money to reinvest in the legal economy.” Other laundering methods involve the internet, such as the theft of online identities, which criminal organizations use to open gaming accounts abroad (mainly in Curacao and Malta), from which they transfer the amounts to be laundered. “Unsuspecting citizens may hold an online account and not even be aware of the fact.” But we will deal with this aspect in more detail in the second and third parts of our series.

English translation by Simon Tanner
www.simontanner.com


Article in Italian