Tuesday, June 03, 2008

Value of a gambling operation

Whenever you see some TV report of a bust of a large drug or gambling operation you often hear some big number quoted as "street value" of the drugs or the "revenue" of the gambling operation. It's almost always some really big, really bogus number.

Some bookie who does a million dollars of business over a weekend isn't likely to seeing anything close to a million dollars. Almost all the bets he books are done on the books. He won't even collect half million from the losers to pay to the winners. Many of the winners had previous losses on the books so they aren't going to get paid anything for this weekends win. Many of of the losers will be allowed to carry this weeks loss over to next week.

But prosecutors like numbers like a million, it makes them sound important.

Also, federal sentencing guidelines used to allow them to seek longer sentences if they could invent really big numbers to describe the handle. A recent court decision seems to have changed that.

The Supreme Court says that judges have to take into account actual profits when determining the size of a gambling operation, not just look at some theoretical total cash flow. If state courts (and newspapers) would adopt the same thinking it would help a lot in reducing silly raids on private poker games. The way things are now a prosecutor can make a poker tournament look a lot bigger than it actually is by doing something really silly like counting the denomination of chips on the table.

I doubt that this court decision will actually change how local prosecutors try to manipulate local news stories, but it's a start.

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