Columnist Jeff German: Nevada sports books facing heavy hitters

NEVADA'S lucrative sports betting industry is in line to receive unflattering attention this week when the National Gambling Impact Study Commission meets in New Orleans.

It should make life more uncomfortable for casino bosses already expecting to take a big hit in the Big Easy.

Among those scheduled to testify on a crime panel in New Orleans is Edward Galanek, a veteran New York detective who is an expert on illegal bookmaking and organized crime.

Galanek, assigned to the Brooklyn district attorney's office, has worked many of the nation's biggest illegal gambling probes, some of which have been linked to Nevada sports books.

One such case involved the 1996 breakup of a multimillion-dollar betting ring tied to well-known Las Vegas gambler Howard Lederer, who ended up pleading guilty to gaming crimes in New York. The probe uncovered relationships between Lederer and reputed associates of New York's Genovese crime family.

Galanek is expected to tell the nine-member federal commission how much illegal sports betting is taking place in New York, how the mob has infiltrated it and how millions in ill-gotten gains on the street flow into legitimate Nevada sports books.

In a January New York Times story after one of his celebrated Super Bowl busts, Galanek talked about the downside of the illegal gambling business.

"There are victims littered throughout this whole thing," he said. "And those victims don't go away. People's lives get destroyed by this business on a daily basis."

Galanek discussed the frustrations of his job.

"As long as someone wants to make a bet, somebody's going to take that bet," he said. "That's never going to stop."

Nevada regulators, however, are hoping to curb the flow of money here from unlawful sports betting rings. Illegal bookies have had a habit of hedging their bets on the street with wagers in Nevada sports books. It's a form of insurance to keep them in business.

The state Gaming Control Board, which keeps tabs on Nevada's $2.5-billion-a-year legal sports betting industry, has been working hard to identify the illegal bookmakers.

Last year, at the Control Board's request, the Legislature enacted a law to clamp down on messenger bettors who place wagers for street bookies at Nevada sports books.

And in the last nine months, the Control Board has been working with the sports books to develop new regulations to tighten up the way wagers are reported.

Getting the sports books to go along with the effort hasn't been easy. But last month, both sides seemed to strike a compromise that will raise the reporting standards and not restrict legitimate business opportunities. The new regulations, however, have yet to be approved.

In the meantime, the national debate continues over illegal sports betting, which some estimate attracts as much as $100 billion a year in business.

Galanek should provide interesting testimony in New Orleans that may leave Nevada sports book operators squirming in their seats.

His testimony has the potential to be a prelude to a more extensive look at the betting industry when the gambling commission holds two days of hearings in Las Vegas in November.

One commission member who'll be paying close attention to Galanek this week is Control Board Chairman Bill Bible, who has been leading the charge here for tougher sports book regulations.

Bible can be expected to ask insightful questions of the New York detective. And that could make for an even drearier time for gaming bosses in fun-loving New Orleans.

When the federal commission made public its agenda last week, casino industry leaders were quick to allege the deck appeared stacked against the industry. It was bad enough that New Orleans, a city whose gambling industry has been plagued by allegations of corruption and mob influence, was chosen as a site visit.

But things got worse when the witness list turned out to be a who's who of gaming critics.

And that was before anyone even heard of Edward Galanek.

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