With Southern Californians spending billions to gamble illegally on sports events--the "action" on Super Bowl XXXIII is expected to set records--why aren't the cops taking a harder line?

BEFORE LAST YEAR'S Super Bowl, Larry Flynt had a hunch. Hustler magazine's picaresque founder dialed one of his L.A. bookies--unconcerned about the illegality of it all--and placed a $25,000 bet on the underdog Denver Broncos versus the Green Bay Packers. "Whenever I bet against Denver," recently recalled Flynt, sitting behind a sprawling oak desk in his penthouse office 10 stories above Beverly Hills, "they always won. So I bet on them." Flynt's intuition paid off. The bookie paid up.

Flynt is not a big sports fan, but he loves to gamble. So when he can't get to Las Vegas for a high-stakes blackjack game, he gets his action with a local bookie. He usually bets $5,000 to $10,000 on NFL games and rarely goes without a wager. "It's no fun watching the games," he says emphatically, a stogie burning between his jeweled fingers, "without having a bet down."

Flynt is not alone in his enthusiasm. Illegal wagering on sporting events has never been more popular in Southern California. Experts speculate that as much as $300 billion is gambled nationwide on sporting events annually. Even the most conservative estimates put L.A.'s share of that action into the tens of billions, securing bookmaking as one of the region's healthiest enterprises, in a league with the entertainment and aerospace industries. With the Super Bowl--the granddaddy of all gambling spectacles--just around the corner, the illicit action will likely reach record proportions.

"Gambling on sports is at an all-time high," says Lt. Jack Miller, head of the Los Angeles County Sheriff's Special Investigation Unit, charged with investigating bookmaking. "It's only going to keep growing. I can't imagine it doing anything else."

As recently as the 1960s, sports betting was a marginal pastime in Los Angeles, centered primarily on local horse races at Santa Anita racetrack. But in the last decade especially, satellite and cable television have brought an unprecedented number of professional and college sports events into the home, and that has unleashed a flood of illicit wagering. In a culture that mythologizes get-rich-quick schemes and sanctions wagering from the state lottery to Indian casinos, sports gambling has become as American as apple pie.

The dark side, the apple pie's burnt crust, so to speak, is the trail of compulsive gamblers and the stench of organized crime that follow the party wherever it goes. In this era of the Internet and readily accessible offshore phone banks, savvy bookmakers have remained far ahead of the marginal efforts of law enforcement to contain the industry. Both the LAPD and the sheriff's department are on record as having no interest in prosecuting bettors, and judges view bookmaking as a petty crime. All of which makes L.A. a place where bookies openly set up shop in tony Westside eateries, in sports bars, at golf courses and card clubs and on college campuses--and a place where the drug of choice for a growing number of Americans is the adrenaline-charged "action" of letting hundreds or thousands of dollars ride on a team to beat the point spread.

The bookie's 800 number is ringing. It's mid November, and Southern California's favorite college football grudge match is just two days away. "Hello," an older man answers. Lenny, a producer with a well-known film company who is letting me listen in, wastes no time talking business: "Hi. Brentwood 462. Can I get the line on the UCLA-USC game?"

There's a brief pause as the bookie checks that Lenny's status as a bettor is in good standing; Lenny's bookie could be based anywhere--West L.A., Pomona, New York City, Antigua. Lenny is under the impression he works out of New York, some kind of Russian mafia operation. It took two people vouching for him to get this account. "Okay," the bookie finally says, "UCLA by five and a half points." The Bruins must defeat the Trojans by six points to beat the spread. "Give me a dollar on UCLA," he tells the man, placing a $100 wager for me in code. I now have, as they say, action.

FOOTBALL," an experienced wagerer explained at a recent party in West Hollywood, "is like Christmas for bettors. While people do bet on basketball, baseball and hockey, football season is truly a joyous occasion for sports gamblers. The sport's fewer pro games--16 per team compared with 82 in basketball and 162 in baseball--it is believed, make the spread more predictable for bettors. The same is true for college football. And the once-a-week cycle of the contests intensifies the drama.

"There is nothing like watching a football game with a bet down," says a television writer living in Santa Monica who didn't want his name used. He's got $200 riding on UCLA, and we're commiserating about the game. "There is a passion to watching," he says. "You really get into all the nuances, and it gets very intense." This passion has him betting $1,000 a week with a local bookie this season.

Bettors love action--the jolt they get from risking hard currency on a volatile sporting event. The threshold for action varies and is often related to income. L.A.'s highest rollers, a class that includes Hollywood celebrities and business moguls, police officials say, commonly wager upward of $100,000 per game. Says one reformed compulsive gambler: "For me, there was no action if I could afford the bet. I had to let more ride than I could afford in order to get that adrenaline rush." Rocky Eversman, an aspiring film producer and avid football and basketball bettor, says he believes the drive to wager is human nature. "I think risk is a metaphor for all of life," says Eversman excitedly as he sips a cup of herbal tea at a sidewalk cafe on Wilshire Boulevard. "People crave the excitement that risk brings, and that's what sport betting is."

Despite its prevalence in Southern California, the sports-betting culture is often invisible. A recent foray to the San Francisco Saloon on Pico Boulevard for a Monday Night Football game between the 49ers and Giants turned up few guys with action. Bettors do congregate at sports bars and neighborhood saloons to watch games, but just as often they stay at home on the sofa. "You could be at home with your family and still have action," says a New Orleans transplant watching the Niners game, the din of the crowd roaring off a nearby TV. "But to be truthful, it's the action that holds your attention, so you really aren't with your family."

Sports betting may be the ultimate spectator sport, but in the end it's a solo endeavor, making it the perfect obsession for Angelenos. "There is a loneliness to L.A.," observes the TV writer, "and there is some of the same loneliness to sports betting." Once a bet is laid down, all hometown loyalties are tossed out the window. "I don't care about the Atlanta Falcons at all," one bettor explains after a wild weekend in which he won a fistful of money betting on half a dozen college and pro football games, "but there I am last weekend, cheering like crazy for the Falcons to beat the Rams. I have never even been to Atlanta, but I wanted to win bad."

Besides the money, a win validates one's intelligence. Most bettors are convinced they understand the game well enough to make the right bet. Others seek an edge. An entire industry, in fact, has sprung up to provide "expert" picks to bettors for a fee. Generally considered latter-day snake oil salesmen, the 1,500 or so "touters" across the country advertise "sure bets" and "guaranteed" winners on radio stations and in sports magazines. "Touters are used by unsophisticated bettors," says Doug Monteith, an LAPD detective with Organized Crime and Vice. "Touts don't know more than anyone else."

Eversman, a midwestern expatriate, spent 10 years working the pits of the Chicago Commodity Exchange and fashions himself a student of risk. From the pits, he took a credo: "The masses are asses." The same principle, he believes, also applies to sports betting. "It's impossible to consistently predict the outcome of games because you can't gauge the emotion of the players on a given day," he says, hauling out a stack of football guides and handmade charts. His system is to suss out those games the experts all agree on and bet the opposite way. The last two seasons, he won. "It's the only logic that works for me," he insists, "and the only system I use to pick games."

The reality is that, in the end, almost everyone loses to the bookie. The more you bet, the more the odds work against you. Bookmakers encourage heavy wagering with options like parlays, teasers and over-unders, and make the bulk of their money from compulsive gamblers. "Bookies feed off people's weakness," says Lt. Miller of the sheriff's department. "They know that, over time, they'll come out ahead."

The case of Bernard Sandier, a Santa Barbara--based entertainment-business manager and agent who once represented basketball legend Wilt Chamberlain, is instructive. In 1996, Sandier appeared before an L.A. County grand jury to testify against his bookie, Walter "Red" Miller. Describing himself as a "degenerate junkie" gambler, Sandier said he would bet up to $20,000 a day. Sandier lost $50,000 a year to Miller. "When you are winning," Sandler said, "you can quit, and you feel like it's okay not to play. When you are losing, you start chasing your bet, doubling and tripling up. It's a very sick concept." While in the hospital for ulcerative colitis, Sandier put his health in jeopardy by getting up from bed to watch football games.

According to Arnie Wexler, a nationally recognized gambling expert, compulsive gamblers make up 5 percent of the population, but the rate is higher in Hollywood. "In the entertainment business," Wexler says from his Florida office, "the general predictors of gambling addiction--ambitious people, unreasonable optimism, high IQs--are there in greater frequency."

It's the middle of the third quarter of the UCLA-USC game. UCLA is ahead by a touchdown--just enough to cover the point spread. I find myself yelling at the television as a pass from Bruin quarterback Cade McNown sails over the head of a receiver. Just hold on to the lead, I think to myself. The Bruins go on to win easily 34-17. I am $100 richer. My first thought: Why didn't I bet more money?

My second: Which NFL teams are playing tomorrow?

THE LAPD ORGANIZED Crime and Vice squad's entire bookmaking team, three middle-aged men, sit eating lunch in the dining room at the Bicycle Club in Bell Gardens. Although there is no sports "book" in the venerable card club, sports journals are stacked near the entrance and an electronic ticker scrolls the latest betting line from Vegas.

Over club sandwiches, chow mein and lasagna, we discuss vice's work: how disgruntled gamblers and angry wives provide their leads and how difficult it is to track phone banks that use 800 numbers and constantly relocate to offices outside the LAPD's jurisdiction. "It's a challenge to find these operations," Monteith says. "The scope of these investigations is often beyond our capacities." From the looks of the LAPD and sheriff's department staffing---seven officers in all--chasing down bookmakers is not a priority. "Organized Crime and Vice," says a knowledgeable observer, "is largely an intelligence-gathering unit. They really don't make a lot of arrests."

Even when the authorities do their job, bookmakers are consistently let off the hook by L.A. County judges. The most glaring case occurred in 1996 when the sheriff's department concluded a three-year investigation of the Kalustian Organization, a $70-million-a-year bookmaking operation that stretched from the L.A. Basin to Fresno and into Nevada. Twenty-one people, including mastermind Kale "Kelly" Kalustian and his top agents, were indicted on felony bookmaking and conspiracy charges. Despite the clear presence of an extensive criminal conspiracy and a volume of illegal business that most drug dealers and pimps only dream of, not one person associated with the case did prison time. "It's very difficult for us," says Deputy District Attorney Mike Duarte, who prosecuted the case. "The criminal justice system doesn't see this as a serious crime. It is viewed as victimless." (Kalustian died in the summer of 1996 before he could be tried; the remaining defendants cut plea bargains.)

Part of the reason bookies get a free ride is their upscale clientele. Kalustian, a gracious, gray-haired Armenian, had worked in the bookie racket for 30 years and made many friends in high places. His agents frequented upscale watering holes and restaurants across the Westside and were regulars at Hollywood Park and Santa Anita. They ingratiated themselves with Hollywood heavies like Michael King, president of King World Entertainment, and attended celebrity parties with the likes of Elizabeth Taylor, Michael Jackson, Sophia Loren and Kirk Douglas. They were also accepted as members of the Friars Club. "I have a lot of friends [in the entertainment business] that gambled," Bernard Sandier told the grand jury, "and people would exchange names of bookmakers. They don't really feel that's such a hush-hush scary thing to talk about. It's not like a drug dealer."

Kalustian held court for more than a decade at Matteo's--an Italian restaurant on Westwood Boulevard that was known as the best place in town to find a bookie--cavorting openly with a host of celebrities and Hollywood heavyweights. According to a police report, Kalustian approached casino tycoon Kirk Kerkorian at Matteo's in 1988 and offered to take his action. In October 1994, police visited Kerkorian in Las Vegas, who at the time owned 73 percent of the MGM Grand Hotel and Casino. Kerkorian, now a billionaire, admitted to betting $5,000 to $10,000 a game with Kalustian's organization for several years. In July 1995, at the height of the O.J. Simpson trial, a police surveillance team observed Al Cowlings enter Matteo's and receive a thick wad of bills from a Kalustian associate. Moments later, Cowlings was overheard saying he had lost $10,000 on a horse race.

HAVE YOU SEEN Guys and Dolls?" asks Arthur Lewis, a criminal defense attorney and counsel to some of the city's most successful bookmakers, including Kalustian. "What you basically have in L.A. is a Guys and Dolls kind of bookmaking. There is no extortion or people going around breaking legs."

Lewis, a natty dresser with a penchant for chardonnay, greeted me on a recent afternoon in his favorite Beverly Hills bistro, Principe, formerly Drai's Cafe. The way Lewis sees it, bookmakers are merely brokers who link people who want to bet against each other. The majority of a bookie's profits, he points out, come from the vigorish--the 10 percent service charge--added to the losing wager. "Bookmakers are just providing a needed service," Lewis says as his cell phone rings. "What are they doing that is so negative?"

Bookmaking in Los Angeles has assumed a kinder and gentler posture in recent years. The extortion, assaults and loan-sharking associated with the business have largely disappeared, if for no other reason than that bookies, understanding that violence attracts cops, are not eager to make trouble for themselves. One former bookie confirms that if a bettor fails to pay in Los Angeles, most bookies would simply cut off his wagering privileges and take the hit as a business loss. "On the East Coast, that would never happen," he says. "Out here, I hear about it all the time." In New York, say L.A. bookies, welshers are still swiftly visited by a shylock who would not hesitate to administer the requisite beating.

Police consider this evolution of the business a victory. "If we can prevent Los Angeles from becoming rife with organized crime," Monteith says, "we feel like we are doing our job." Still, the specter of the mob hangs over L.A.'s bookmaking business. "Bookmaking has always been the lifeblood of organized crime," says Charles Rappleye, author of All American Mafioso: The Johnny Rosselli Story, about the mob in Hollywood. "It is a conduit for taking money underground in other rackets, like prostitution, insurance scams and drugs."

Los Angeles has long been an open city, meaning no single organized-crime family controls its sprawling turf. But recent evidence suggests the mob has not been relegated to the history books just yet. During the spring of 1997, the L.A. County sheriff received a tip about a bookie operation in Lynwood. Police surveillance of two houses on a single lot in a middle-class neighborhood turned up a significant bookmaking operation that was estimated to be taking in at least $1 million a month. The men paying for the phone service at the properties, Peter Cortese and Kenneth Carmen Macchiaberna, had bookmaking ties to New Jersey's Luchese crime family, the U.S. Justice Department confirmed. When the houses were raided, Cortese and Macchiaberna were nowhere to be found. But Richard Thomas Cortese Jr., Peter's brother, was arrested, along with two clerks, on felony bookmaking charges. Not convinced of the seriousness of the crimes, Municipal Court Judge Xenophon F. Lang threw out one of the counts against Cortese and reduced the other to a misdemeanor. Cortese pleaded guilty and paid $2,700 in fines. The judge returned to him $16,000 in seized cash and bookmaking equipment. Sheriff's deputy Carter Gordon, who investigated the case, couldn't believe it. "I stood up [in court] and told the judge, `that's wrong,'" he recalls. "The district attorney told me to sit down. The judge didn't change his opinion."

In the past two years, at least two other bookmakers with ties to organized crime have also been arrested in Southern California. Although the Kalustian organization could not be definitively linked with organized crime, some in law enforcement believe any operation that large had to be. "Books like that have to be to allow them to operate," says one sheriff's department detective. "It's a turf thing." Major operations also need major financial backing to cover potential cash losses of $100,000 or more. "Organized crime," the detective contends, "usually acts as the bank for these books."

IN THE MEANTIME, illegal sports betting becomes more tightly woven into the fabric of L.A. One has only to flip on AM sports stations like XTRA 690 to hear