State and mafia take their cut as Italians develop gambling habit

http://www.guardian.co.uk/world/2012/feb/29/state-mafia-italy-gambling

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Last December a policeman in a small town near Rome put on a balaclava, kidnapped his neighbour's teenage son and demanded an €85,000 (£72,000) ransom.

Quickly tracked down and arrested by his fellow officers, he told them: "I'm up to my neck in debts – I lost everything at video poker."

Bizarre stories like this are popping up ever more often as Italians develop a serious gambling habit, last year wagering €80bn, up from €4bn a decade ago.

Takings winnings into account, Italians are now spending €304 a head annually, compared with €232 in the UK. "Italy has moved to the number one spot in Europe after overtaking the UK – which was in first place – in 2009," said Michael Haile, an analyst at Global Betting and Gaming Consultants.

The boom has been driven by the legalisation in 2004 of slot machines – there are now nearly 400,000 – which have overtaken lotteries, horses and football to account for more than half of today's total spending.

The second catalyst, experts say, has been the economic crisis. "People in need tend to seek out quick fortunes," said Father Alberto D'Urso, a Bari priest who works with loan shark victims, many of whom have huge gambling debts.

As a third of young Italians look for work, and with two million employees spending time at home last year on low pay leave, an estimated 800,000 Italians are now addicted to gambling.

"One man who gambled came to me with €35,000 in debts," said D'Urso. "We helped him take out a mortgage, but he stopped paying it off. Next thing I heard he had poured petrol over himself, set light to it and his family discovered his carbonised corpse."

Online gambling drew €8bn in bets last year after heavy promotion, with the popular Roma footballer Francesco Totti a spokesman.

"Gambling is not in our DNA, we are not like the British. But the state has encouraged it and advertising has done the rest," said Daniele Poto, author of a new report on the phenomenon.

"Until the 1990s it was disapproved of and the government's tendency was to control it," said sociologist Maurizio Fiasco, who studies gambling. "Then it became a useful revenue. An economic crisis can make you save or bet, it just depends on how society defines it."

As Italians bet more, they are saving less, putting aside €1,700 annually, compared with €4,000 a decade ago.

In Rome and its surrounding towns, which have the highest spending on gambling per head in Italy, slot machine parlours have opened on high streets as quickly as family stores have shut down. They are promoted by billboards showing men in dinner jackets and women in evening dress happily pumping money into machines.

"Inside, the parlours have luxury fittings and pretty girls but no clocks, so you lose all sense of time," said Poto.

While the parlours provide a revenue for the cash-strapped government, the mafia has also moved in for its cut – allegedly using front companies to obtain licences then laundering drug money through the operations while falsifying records of money wagered to deprive the state of revenue.

In his report, Poto names 41 mafia clans reportedly involved in the gaming business.

In Reggio di Calabria an entrepreneur linked by prosecutors to the 'Ndrangheta organised crime group built an empire of hundreds of properties in the town, and in Rome and Paris, thanks to his control of more than 1,000 slot machines.

Apart from investing in apparently legitimate operations, mafia bosses also operate their own back-street gambling operations, which are estimated to earn them billions of euros a year.

Giuseppe Pisanu, the head of Italy's parliamentary anti-mafia commission, claimed this month that for every euro in revenue the Italian state takes out of gaming, the mafia gets at least eight.

"This phenomenon has proved to be easy money for both the state and the mafia," said Poto.