Estimate of $40 Billion Bet Illegally on Sports Stuns Reagan Commission

The fact that most big-time gambling is run by organized crime is well-known, but the scope of illegal sports betting--estimated Monday at about $40 billion a year--seemed to surprise even the experts who make up the President’s Commission on Organized Crime. After all, by comparison, the latest figure for President Reagan’s “Star Wars” program is $26 billion over five years.

At a hearing here Monday to investigate ties between organized crime, illegal gambling and sports, the commission heard law-enforcement officials say they couldn’t figure exactly how much money Americans bet on football, basketball, baseball, boxing and other sports. Their best estimate, they said, was about $40 billion, which they emphasized probably was a conservative figure.

Mark Vogel, special Department of Justice attorney assigned to the Chicago Organized Crime Strike Force, gave the commission an example of how much money is made in illegal sports gambling. He said that during the 1980 college and pro basketball seasons, one mob-run gambling operation in Milwaukee grossed an average of about $11,000 a day, with a single day’s gross as high as $24,000. During football season, the operation grossed an average of about $10,000 a day--mainly on NFL games--with a single day’s high of $47,000.

Sgt. Charles Herion, who has been investigating organized crime in Chicago for more than 20 years, also gave the commission an example of the money involved in sports gambling. He said that when IRS agents raided one bookmaker’s home in Chicago, they found $600,000 in cash, stuffed in a gym bag in the garage. The bookie told Herion that he made as much as $200,000 on the betting of one football game.

Jerome H. Slotnick, professor of law at the University of California and a national expert on gambling, suggested that sports gambling be legalized.

“Billions of dollars are spent annually on sports betting,” he said. “The effect of legalized gambling on amateur sports and sports corruption is a problem, but it is hard to see how legalization would make it worse.”

Commission counsel James D. Harmon Jr. then read from an affidavit that Indiana basketball Coach Bob Knight gave the commission on the possibility of legalized sports gambling.

Knight said in his affidavit: “I have just never been one to feel that we should have legalized gambling on sporting events. The history of gambling on sporting events involves all kinds of bribes and fixes. Anytime there is a situation where odds are being published, somebody is trying to figure out a way to beat those odds, and that obviously has resulted in the sports scandals that we have had involving betting and gambling.”