With 800 to 1 payouts and 10% of sales for the store owners, sounds like they were not only giving the state some competition, but also those off shore betting operations.

$48 million over 5 years. With an 80% payout percentage that represents a profit of $9.6 million. Not too shabby, considering the CA Pick 3 pays just over 50% on a pari-mutuel basis.

Even given they were giving the store owners an additional 10% that still represents a profit of $4.8 Mil..... I could make bail with that. 

That's better than the bookies I knew in the DC area back in the 60s who paid off 60% on a Pick 3 numbers bet.....

Wow! So they spend another $500,000 get a very good lawyer, who will plea the charges down to about 3 years in prison each, and after making a profit of about 5 million, even if they had to pay 500,000 apiece for the fine, they still have 4 million. So  they set up their money to work for them while they work for the state, making license plates, and they come out smelling like a rose. All the while still running another operation from behind bars.

Who says crime dosen't pay???

These guys didn't pay any taxes on that money.  When the government get done charging penalties and fines, they will owe twice as much as they earned.
 
Years ago I participated in a company saving program that allowed employees to save up to 10% of their pay and the company would contribute an additional 30% to the account which had to set idle collecting interests for four years.  At the end the four years, the account was freed up and taxes had to be paid on the company contributions and the accrued interest.  I filled out my own taxes and put the extra money on the wrong line and when I was audited three years later I got a bill for almost $900 due immediately for penalties and fines because the government auditor thought I hadn't paid taxes on $500 on a 1099 form issued by the bank to me three years earlier.  I got copies of my W-2 and taxes forms for that year and as nice as I could explained in a letter had they been as concerned about the extra $500 on the wrong line as they were about the missing $500 on the correct line, they would have known I either made a mistake or over paid my taxes.  I received a letter three weeks later thanking me for my explanation and that was the end of it.

I was surprised that a taxes bill of $150-$200 if not paid could grow to that size in a little over three years.  I don't know how they figured but they really try to make you pay extra for cheating if you get caught. 

Reminds me of a brothel that they busted in the Upper Penninsula of Michigan. The madam got off with just the charges of running a house, because she paid her taxes religiously every year that she was in operation. When they came back on her to hit her with back taxes, she showed them her records, and they couldn't do anything to her. Must have been her winning personality!