A racket is a service that is fraudulently offered to solve a problem, such as for a problem that does not exist, that will not be put into effect, or that would not otherwise exist if the racket did not exist. Conducting a racket is racketeering. Particularly, the potential problem may be caused by the same party that offers to solve it, although that fact may be concealed, with the specific intent to engender continual patronage for this party. The most common example of a racket is the “protection racket.” The racket itself promises to protect the target business or person from dangerous individuals in the neighborhood; then either collects their money or causes the damages to the business until the owner pays. The racket exists as both the problem and its solution and is used as a method of extortion.
Racketeering is often associated with organized crime, and the term was coined by the Employers’ Association of Chicago in June 1927 in a statement about the influence of organized crime in the Teamsters union.
