Ex-mobster rips gaming

Friday, Sept. 11, 1998 | 10:39 a.m.

BILOXI, MISS. -- Corporate and state-run gaming enterprises today operate on the same principles established by the mob decades ago, a former Chicago underworld associate told the National Gambling Impact Study Commission on Thursday.

"After all the camouflage is removed," William Jahoda said, "the harsh truth is that every form of organized gambling is either a replica, a knock-off or a jazzed-up model of each betting scam the mob trotted out before an unsuspecting public in the barren Las Vegas nightscape 50 years ago."

Jahoda, who ran the Chicago mob's largest illegal gambling operation before becoming a government witness in 1989, preached the evils of gambling during his much-anticipated appearance at the commission's fifth hearing on the road.

His appearance, which angered Nevada's congressional leaders who fear it gives an undue black eye to the casino industry, was in stark contrast to his testimony three years ago before the House Judiciary Committee, when he talked behind a screen under heavy guard.

On Thursday, Jahoda, once a federally protected witness who now travels the country spreading his anti-gambling message, came alone and was treated like any other speaker coming before the nine-member commission. He was listed on the agenda under the alias, Bobby Jay.

Afterwards, three commissioners aligned with the casino industry criticized Jahoda's testimony.

"It was not relevant to the question of legal gambling because his only purported knowledge was about illegal gambling," said Commissioner John Wilhelm, president of the international Culinary Union. "I don't know why he was testifying here at all."

Commissioner Terry Lanni, chairman of MGM Grand Inc., was harsher.

"I don't find much credibility in a person who operated as he has indicated he operated in an illegal fashion preying upon people," Lanni said. "Now he's suddenly determined that he's found religion, and as a result of that, he's a more accepted human being. I find that to be reasonably despicable."

Commissioner Bill Bible, chairman of Nevada's Gaming Control Board, added: " I think it was important what he didn't say. He did not indicate there was any linkage between legalized gambling in Nevada, in Illinois, in New Jersey, in any of the jurisdictions with organized crime."

None of the three gaming allies challenged Jahoda's statements during the hearing.

Jahoda called gambling a "predatory" industry.

In reality, he told the commissioners, "most forms of gambling, whether run by the state, corporations or the mob, are by their parasitic nature an actual and potentially dangerous vice."

Jahoda said illegal gambling was the Chicago mob's biggest profit-making venture in the 1980s. Gambling proceeds, he said were used to fund the family's other criminal activities, such as loan-sharking, prostitution and chop shops.

"Time does not permit me to detail other examples of the corruption damage gambling does to a community," Jahoda testified. "But I will say that any time an approved gambling house is introduced into a medium size metropolitan area, the presence of crime syndicates will be arriving shortly thereafter."

In an interview before his testimony, Jahoda acknowledged that Las Vegas is gambling's biggest success story.

'You can thank the mob for that," he said.

Then he added: "Vegas has always had the envious position of being able to import the money and export the social costs that are involved in gambling. You can make the money and ship out the problems once the tourist leaves."

Jahoda said he wanted to address the federal commission to inform the public about gambling's downside.

"This is a dangerous product no matter who runs it," he said.