The desire to recoup after losing money sometimes goes against common sense. In the film "The Gambler" with Mark Wahlberg, the main character is guided by the principle of "All or nothing." He borrows hundreds of thousands of dollars in an attempt to recover lost funds and his own life. In the film, all the characters are fictional, but in the history of gambling you can find individuals with a similar story. For example, the Japanese high rollerAkio Kashiwagi — when he owed a large sum, he was found dead in his own house. The police never found the killers, but when it comes to stakes and debts, it usually involves a loan shark.

• First Gambling Credits
• Preconditions for Usury
• The Mafia Usury Scheme
• The Fate of Debtors
• The Rise of Usury in the USA
• Moneylenders today
• Moneylenders against casinos

The first credits in gambling

For a long time, participants allowed each other to gamble. In the 19th century,clubs — special places for gambling were very popular in the Russian Empire. For membership, it was required to make a considerable contribution, so wealthy people mostly took the cards. They were allowed to play on credit, but they had to return the money within 24 hours after the end of the game.

If the loser did not have time to pay off on time, his name fell into a special book. Until he repays the debt, the doors of the club will be closed to him. The nobility of such motivation was more than enough. In order to regain status and full membership in the club, they often had to sell their property.

Gambling loans were issued in the same way in the United States during the Wild West. Rivals at the table or spectators acted as usurers. Often this happened without interest, but the debtor could be required to pay at any time. If he was unable to return the money, the pawnbroker would take the property.

Such conflicts sometimes escalated into skirmishes. The most famous case occurred withWild Bill. The moneylender tried to impose a non-existent debt on the American shooter and publicly took his expensive watch from him. Wild Bill eventually had to deal with the offender in a drastic way.

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Prerequisites for usury

Private lending began to grow in popularity in the 20th century. Major mafiosi represented byArnold Rothstein,Morris Dalitz,Meer Lansky andBugsy Siegel made a huge fortune bootlegging during Prohibition. The gangsters began to invest the funds received in other areas. Among the most profitable: drug trafficking, gambling and loan sharking.

Bread and butter

By this moment Las Vegas had not yet become a gambling center, so mafiosi most often opened illegal casinos. Such establishments could easily be disguised as a nightclub. To avoid scrutiny by the authorities, mafia bosses were not shy about bribing politicians and policemen.

There were problem gamblers among the visitors to illegal casinos. In the event of a loss, they agreed to any interest, just to get the opportunity to recoup. The gangsters were interested in driving them into debt - they had to pay off debts for many years.

Repeal of Prohibition

When the prohibition on alcohol was no longer in force, the mafia had to look for additional sources of income. By this time, large groups managed to put together a lot of capital. Bugsy Siegel, Meyer Lansky and Morris Dalitz began to gradually invest in Las Vegas - casinos played the role of "laundries". For a long time, they made their main profit from usury and the organization of illegal gambling.

Failure of banks

No player will be given a loan at low interest if the money received goes to bets. It was also impossible to take a small loan from a bank under any other pretext. Then small lending at low interest was considered unprofitable.

Thanks to the refusal of banks, a niche for private lending appeared, which was occupied by usurers. They were ready to issue loans at 2-5% per week - the interest depended on the amount and term. One pawnbroker managed on average up to $300,000 in capital.

A usury scheme in the mafia

Mafia bosses oversaw the general capital and large monetary transactions. Any member of the gang could borrow money at 1% per week.

He loaned the funds received at 2–5%. The loan shark, unlike the head of the mafia, takes more risks - problems with the borrower remain a headache for the creditor.

If the debtor does not return the money, the mafia boss will demand payment from the gang member.

Most moneylenders used to carefully approach choice of players, paying attention to several key factors:

For excessive cruelty of creditors from the mafia began to be called "shylocks" (from the English. Shylock - a Jewish pawnbroker from the play "The Merchant of Venice" by W. Shakespeare).

The fate of debtors

Repaying the loan with interest is the best outcome for both parties, although loan sharks always had a back-up plan. Among the debtors were several insolvent clients. In case of non-repayment of funds, creditors used a simple scheme:

• Intimidation and threats.
• Seizure of property.
• Recruitment.

Murders are almost never got there. Debtors were disposed of in extreme cases - most often they were demonstrative executions. In 1928, the big mafia Arnold Rothstein was dealt with because of a gambling debt of $ 300 thousand. Such cases forced the debtors to pay any money and fulfill all the orders of the gangsters. century

If the debtor could not repay the loan, he was given the opportunity to work off the funds. Mafiosi offered several options:

• Selling drugs. Debtors had to go out and distribute illegal substances. Due to high interest rates, ordinary people turned into drug dealers for several years.
• A sincere confession. They could forgive the entire amount of the debtor if the latter took the blame for the crime of one of the gang members.
• Assistance in a crime. It is not without reason that moneylenders are interested in the borrower's place of work. If he holds a position in a jewelry store, he will be "politely" asked to leave the door open after the end of the day.

It was also not uncommon for lenders to force borrowers to provide other, mostly illegal services.

The rise of usury in the US

In the 1960s, private lending reached its peak. This was made possible through cooperation between the gangs. The syndicates exchanged information about the debtors so that they could not turn to another loan shark to repay the loan.

There were regular headlines in the media about murders. Often they were mistakenly attributed to usurers, calling debts the main motive. This played into the hands of relations between lenders and borrowers - the latter returned the money without any problems. According to an FBI survey, out of 115 debtors, only 1 faced threats, but none of those interviewed were subjected to violence.

Usury for the underworld has become one of the most profitable businesses. The main catch lies in compound interest. When a player takes out a loan at 5% per week for $1000, he calculates that this is 260% per year. However, if he does not repay the debt, the amount will be much higher than $3600. Since interest is calculated every week, after 10 periods the loan will grow to $1,551.34. By the end of the year, the debt will be $12,041.01. Every week, the debtor will have to pay more than $602.

Until 1965, usury was considered a class A crime in the United States and was practically not prosecuted by law. Private lenders usually received a fine, and in the worst case they faced up to 1 year in prison.

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Usurers today

Private lending and harassing debtors are now facing jail time. In most countries of the world moneylenders receive from 1 to 3 years. The term of arrest may increase if more serious crimes were committed while collecting loans.

In 2016, two loan sharks, Zayarit Mahmoud and Javid Iqbal, were caught in the UK. The duo worked for ten years, with addicted players as their main target. They issued small loans, and for every £1,000 they demanded a payment of £300. Even if the debtor can return the money in a day, he still has to pay 30%.

Among their most serious crimes are the forced confiscation of a mobile phone and £70 thousand. The loan sharks pleaded guilty to illegal lending and received only 14 months in prison. Over 10 years of operation, their earnings were estimated at £200,000, although the exact figure cannot be given due to lack of records.

This not the only case of usury. Approximately all criminals work according to the same scheme:

• Getting to know the casino. A pawnbroker needs to "make friends" with a manager or a dealer. The companion must report regular players who want to continue betting after losing.
• Introducing the client. After a call from a companion, the pawnbroker arrives at the casino to meet the potential borrower.
• Drafting a contract. Lenders may offer to sign papers. Although their legal force is doubtful, this is an additional leverage for some debtors. Private lenders usually charge too high interest rates, which will be easy to challenge when going to court.

Usurers also require collateral to minimize risks: car, mobile phone, jewelry, etc.

Usurers against casinos

Gambling is considered a legal business in Nevada, Atlantic City, Macau, Sochi and other areas. Casino earnings are based only on the loss of visitors. You can endlessly accuseSheldon Adelson andSteve Wynn of stealing from ordinary players, but in return they offer a glamorous vacation with the opportunity win. AndKen Uston,Gonzalo Garcia Pelayo andDon Johnson на наглядном примере доказали, что казино можно обыграть.

In the case of usurers, debtors always lose. The latter give part of the winnings with interest on the loan, part with property or commit serious crimes. The usurer is sometimes more interested in selling the collateral than in repaying the debt. After all, if the loan amount is $5,000, it is much more profitable for him to sell the car for a conditional $15,000.