by Declan Hill
There are runners who take Don and Steve’s payouts to the local bookies. These bookies may have a territory of a large neighbourhood or small town. At this level in Singapore or Malaysia, it is quite possible for a runner to be of an ethnicity other than Chinese, but as one rises up in the hierarchy, the opportunities for non-Chinese people dries up.
Above the local bookies are the regional representatives who have counting centres where the total bets of the region are calculated and compiled. The local bookies pay into these centres. They are usually nondescript houses in quiet neighbourhoods with little traffic.
Steve and Don took me to one small counting centre in Johor Bahru. It was just above a car-repair shop and from the outside, it looked perfectly normal. Inside, it looks like a small office, with rows of computers and telephones. In all counting centres, there is supposed to be one button that they can push to erase all confidential files and bets in case of a police raid. But Steve told me that these raids were mostly theatrical performances designed to make the police officers, such as Inspector Lee, look good and not trouble the gambling syndicates too much. “Occasionally the bookies will give the police a house to raid. Just for show, la. Keep the system turning. Not make anyone look too bad.”
Malaysia is not alone in this type of corruption. I wanted to get some perspective on Asian organized crime and illegal gambling, so when I returned to Oxford, I contacted Joe Pistone. Pistone is one of the heroes of the North American anti-mafia fight. For six years, he worked as an undercover agent using the name Donnie Brasco and managed to infiltrate one of the five big New York crime families – the Bonannos. In his eventual court testimony, he helped convict more than one hundred mobsters. Few people know the inside world of the American mob as well as Pistone. We spoke about his experiences when he was running an illegal bookmaking operation.
We were paying off police officers, sure. Look, gambling doesn’t exist without payoffs. It’s not something that you can hide, you know what I mean? Because you have to go somewhere to place your bets, and the bookie has to be somewhere. You know, he’s got to be hanging out on a corner or in a bar or a restaurant. So unfortunately that happens, yeah.
I began to tell him about the Malaysian police making staged raids on gambling houses, but he stopped me before I could finish my sentence.
Right, and they make a bust. I mean, that happens here in the States too. They make a bust and they arrest some nobodies, so it looks like they’re doing something. I mean, that’s the old game, that’s not something new…. It keeps the newspapers happy, it keeps the people happy, you know, the citizens happy, that, you know, the police are doing something. Somebody gets arrested. You know, somebody of no consequence. And they make sure that there’s not that much money there at the time. I mean, that’s not a new game. That game’s been around forever.
The kind of shadow puppet theatre of fake police raids is also common in the world of Asian illegal gambling syndicates. In 1995, after the scale of the Malaysian and Singaporean match-fixing was revealed, the Royal Malaysian Police moved in. They arrested more than 150 people connected to the league: players, coaches, even a regional bookie. It was, according to one author, “the biggest and most thorough inquiry in the history of the professional game.” If this is true, the game is in a very bad way, for the investigation was, according to some of its own top police investigators, deeply flawed. I met one officer in the food court of a shopping mall on the outskirts of Ipoh, a provincial town in northern Malaysia. The story he told, amidst the mundane setting of plastic tables and disposable cups, was incongruously fascinating. It was the lieutenant-governor’s warning of squalid police corruption and betrayal to the gambling syndicates made real more than a century after he wrote his original warning.
The officer told me: “I do remember that one of the police officers, one of the lead guys in the investigation, we caught him meeting with one of the bookies that we were trying to investigate. We put a tail on him and I got a call on my phone from people who were tailing him. He was meeting with the Chinese bookie we were investigating in a hotel in Klang.”
I asked him whether they had arrested their colleague. He replied: “No, it would have been too embarrassing. He was a triad expert. I think I know how he got his expertise, so we took him down a rank and let him resign.”
The stories of high-level corruption in the Malaysian police may sound incredible to an outsider, but on one of my stays there, there was a government-appointed inquiry, that released yet another report into police corruption. They had discovered that some of the traffic units were making so much money from shaking down motorists that they were auctioning off the post to the highest bidder within the force. If an officer wanted a high-level position, it was alleged, he or she had to pay to work in the unit.
However, apart from financial security, there are two other phenomena that keep the illegal gambling structure in place and ensure that the theatre of enforcement goes on: they are called “trust” and “a serious reprimand.”
6
THE MOB, TRUST, AND SERIOUS REPRIMANDS
I mean there are a lot of things that come into consideration. But mostly I would say that you’re going to be bullied or hit or beaten up. They are going to smash you up. You’re probably in the stages for a serious reprimand.
There was something rotten in the Petaling Street Market. At first, it looked like a bustling, crowded market full of independent traders. My hotel was just near the market in central Kuala Lumpur’s Chinatown and I would see the area getting busy just after sunset. In the darkness, there were approximately three hundred and fifty market stalls jammed into four city blocks. Each seller was crammed next to his neighbour. It looked like a highly competitive place. There were stalls selling counterfeit perfumes, shoes, and designer clothes for a range of different prices to bemused tourists from a dozen different countries. The air was full of the sounds of bargaining, the imploring shouts of the sellers and the smell of durian, the Malaysian fruit which gives off an odour of garbage and rotting cheese. When I first came to the city I worried that in a few years the market would disappear, like much of the city, under concrete and tarmac. It seemed a long way from its original function, a place providing for the needs of the local Chinese community, and now it was full of stalls catering to sun-soaked tourists.
It was the DVD sellers who gave me the first indication that there was something different happening there. In the midst of the confusion, there would always be young men wandering around carrying stacks of pirated DVDs under one arm. Oddly, for all the number of sellers, their prices were relatively consistent. The DVDs were always listed at ten Malaysian ringgit a disc (approximately $2.50). No matter how much bargaining a tourist was willing to do, that price would not change. It seemed odd in such a highly competitive atmosphere. However, after a few months of wandering around the market talking to the stall owners and the DVD sellers. I discovered that there was actually only one “Mr. Big” (their term) who controlled all the DVD sellers. All the DVDs sold in the market were owned by him, and the appearance of a highly competitive market was an illusion. Actually, the longer I stayed there, the more I realized that few people in Kuala Lumpur even shopped at the market. Most Malaysians went to air-conditioned shopping malls: “Better selection, cheaper too, la,” my friends would tell me. I realized that the Petaling Street Market was not kept open despite the tourists who went there, but in large part because of the tourists. We were being given the experience we expected: “exotic Asia” – hot, cramped, and crowded, and not the one that actually existed.
Then I noticed the burnt-out stalls: half a dozen in each row, burned to the ground, their ashy wreckage untouched in the middle of the seeming chaos. The owners of other stalls looked embarrassed and shrugged their shoulders when I asked them how so many stalls could catch fire when ones that were in between them all stayed intact.
Finally, I took a couple of friendly shop owners who I had done business with to one side, nodd
ed to the burnt-out wreckage and said that universal word, “Mafia?”
They nodded grimly. “Yes, yes, mafia.”
The illegal Asian gambling syndicates are a little like the Petaling Street Market: there is an illusion of a highly competitive system. However, what actually exists is a very carefully controlled structure, owned and financed by a relatively small, select group of men, and to make their market work, they need two things: trust and violence.
Having problems with your gambling debts? Can’t pay? Won’t pay! Don’t worry. The Asian gambling boys will soon be around to visit you. At first, they will be quite nice as Steve told me earnestly. “You can go to them and say, ‘I’m sorry. I cannot pay all the money. I will pay you a thousand now and then week from now. I will pay but I need time….’ They will give you time. They will shut you down from playing until you pay, but they are not bad.”
His description is accurate if a gambler has the wherewithal and intelligence to go to his bookies and tell them about minor debts and, conveniently, has a brother-in-law who, like Steve, is a major operative. However, for the normal punters with big debts, the local bookies will call in the muscle. They will stage an escalating series of retributions up to major burglary raids, where they steal everything, burn the house, and possibly chop up the bad-faith bettors. The newspaper columns of Singapore feature the occasional stories of innocent citizens being mysteriously attacked by gangsters or disappearing for “no apparent reason.”
There is, in reality, a very good reason for the disappearances. The gamblers are promoting trust. It may seem odd, but along with money and protection, this multibillion-dollar industry relies on one other major sociological phenomenon – trust. Amid the murders, house raids, and muggings, there is a pattern.
Academic Partha Dasgupta once described the need for people to trust in the enforcement arm of organized crime. The credibility of organized crime consists of their ability to make use of what he calls “credible levels of force.” It works both to deter other criminals and persuade ordinary citizens to co-operate with the gangs. In burning up stalls in street markets, poking people’s eyeballs out, or chopping up persistently non-paying gamblers, the criminals are making sure that the gamblers trust them to retaliate if the punters do not pay. There is, how ever, a psychological level that Dasgupta did not write about – enjoyment.
Italian magistrates Giovanni Falcone and Paolo Borsellino were the two best organized-crime fighters the world has ever known. Better than Rudy Giuliani in New York. Far better than Scotland Yard in London. And far, far better than any other detectives in Asia. They lived – under police protection – right in the centre of Palermo for more than ten years, at the heart of the Sicilian mafia. Before their murders, they encouraged dozens of mob members to confess, to become pentiti and talk about the structure and business of the mob. Some of the mobsters talked of death, about the acid baths that engulfed their victims, and the trips out to the harbour to dump the bodies. They talked about the room where the head of one mafia family, Filippo Marchese, kept his victims and tortured them slowly. One mobster, who helped in the sessions by grabbing the feet of the victims as they were slowly strangled to death, testified, “Although he was head of the family, Marchese personally strangled most of the victims himself, often for the most insignificant of reasons … Marchese was a bloody-minded character and gave the impression of enjoying killing people and demanded that no one betray any emotion at the spectacle.”
This is organized crime. It is not The Sopranos, with their moral anxieties and their psychiatric confessions. It is not Al Pacino looking sexy as Scarface or John Travolta in Get Shorty. It is desperate, horrible men who enjoy taking people away to secluded places and slowly, deliberately hurting them. Hurting them the same way little children pull the legs off ants.
“Big Sal” Miciotta was part of this world. He was a mafia hitman for the Colombo crime family in New York City. He murdered at least five people in cold blood. In the mid-1990s he was caught and became a high-profile turncoat for the FBI. He has a high price on his head. We talked about the world of illegal gambling. He, too, had become interested in the reach of the Russian mafia into the National Hockey League. He claimed, “I know some Russians in Brooklyn that were involved with the higher NHL, the Russian mafia they call them … they got a bunch of Russian hockey players in the NHL, and they were doing a lot of business with them … the Brooklyn guys, the bookmakers, they weren’t touching any hockey games … for a long time they shut off the hockey.” In other words, the senior mob-connected Brooklyn bookmakers would not take bets on key hockey games in the mid-1990s because they were convinced that some of the Russian hockey players were throwing games for their mobster friends.
Big Sal would certainly know about Brooklyn illegal gamblers: he ran a mob-controlled casino there. He explained the structure and mechanism of illegal gambling operations in Brooklyn to me. And a lot of it sounds exactly the same as it is halfway around the world in Malaysia, down to the theatrical raids on the counting centres staged by the police.
Me and five guys, one guy from each organized crime family, we had a place called The Club Intrepid. We had six blackjack tables, two craps tables, and ten poker tables. And we ran a casino-like business for maybe two years. We made a ton of money. We had the police on a payroll. Morals police. But when we were going to get arrested, we got, two weeks in advance, we got notice. We took all the money out of there, we left all the legitimate guys there to take a pinch, we had the lawyers waiting around to bail them out. You know, the whole deal, the whole deal.
But then he told me the real money in American sports gambling is not from running the book.
When the guys who are betting on sports can’t pay their tab at the end of the week, they automatically become a Shylock customer. That is primarily, what really, really, really spikes it up. Let’s say you lose five thousand to me this week and you don’t have it. I’ll give you the five thousand as a Shylock loan so you can pay your gambling debt.
Hill: And the interest is?
Miciotta: About five points. So that is $250 a week. Just interest. A lot of money. A thousand a month.
Hill: What happens if I don’t pay you back within two months?
Miciotta: You have to keep paying me the $250 a week until you pay me back.
Hill: Okay, but what happens if I’m an honest, decent guy. I have a cash flow problem and I’m not lying. What happens after say two weeks?
Miciotta: I mean, there is a lot of things that come into consideration. But mostly I would say that you’re going to be bullied or hit or beaten up. They are going to smash you up. You’re probably in the stages for a serious reprimand.
Mobsters must be careful how they publicize this side of the work or the real nature of a serious reprimand, for trust in illegal gambling structures is a two-way street. The gamblers must rely on the bookies to beat them up if they do not pay, but they cannot be so afraid of them that they will not bet at all. The gambler also has to trust the bookies to pay them. Steve and Don told me, “They are very good at paying. You wait two days and then they have the money for you. They will come to your door with the money. Very rare that they do not pay. And that is only when the lower bookie has spent it then they will delay. But usually never.”
Even for a hard North American mobster such as Big Sal, the essential mechanism of an illegal gambling operation is the same as it is in Asia: trust and reputation. “You have to pay. Your reputation is everything … I never knew the Italian guys not to pay someone. Never knew that….” Joe Pistone (Donnie Brasco) said the same thing: reputation is everything for the illegal bookmaker.
And once the word gets out that you welched, no one’s going to bet with you any more, you know? Now, there are some … I’m sure this happens, but a good bookie, somebody who’s been in business for a while, is not going to do that because, like I say, over the long run, the bettor’s never gonna win. And, once you welch on one person, the word gets out and th
ey’re going to go to somebody else.
In the gambling business, people talk. The flow of information is a powerful, measurable force. Bettors talk about which bookmaker is honest or not, and even rival bookmakers who detest one another will share information on non-paying customers. The basic assumption in most gambling markets is that of “perfect information” or that someone, somewhere will know everything there is to know about an event. Because of this flow of information among gamblers, after the 9/11 attacks the Pentagon floated the idea of a public futures market based on terrorist attacks and assassination attempts on President George W. Bush. Futures markets are linked to stock exchanges, so they are officially legitimate forms of investment. But they are simply another publicly approved form of gambling. Futures are usually tied in with obscure, financial commodities such as pork bellies or wheat, but basically the “investor” – read gambler – bets on the future rise or fall in the price of these commodities. The Futures Markets Applied to Prediction (FutureMAP) idea was that if any terrorist or criminal group had a serious plan to kill the U.S. president, someone, somewhere would not be able to resist betting on the plan. The futures market would then red-flag the Security Department and they would be able to increase the protection for the president. The plan was abandoned as being in bad taste, but the idea of the power of information in the gambling market remains.
This emphasis on trust relationships is why the reputation of a prompt and ready payment is higher, among professional gamblers, for the illegal Asian gambling syndicates than most of their legitimate counterparts in the big British gambling companies or Las Vegas. I discovered this when I visited the studios of John McAllister (*), across the world, but around the corner on the Internet. He has become part of the wider revolution that in the last few years has transformed illegal betting around the world and has made fixing soccer games much, much easier.