This term first came to be used in the English language in 1927, when the Employers’ Association of Chicago made a stated about the influence of organized crime in the Teamsters Union.
To understand the word, its components need to be understood. A racket is referred to as an illegal business or syndicate, and typically, it is a component of organized crime. People who participate in the racket (illegal business) are racketeering. There are two very common kinds of rackets that most people are familiar with: numbers racket and protection racket.
In a protection racket, criminals demand cash from businesses to protect them against crimes that the criminals commit if they are not paid. The numbers racket is referred to as an illegal lottery.
The RICO Act went into effect in 1970, and permits law enforcement to charge people with racketeering, to wit: committing numerous violations within a 10-year period. The statute is broad enough to cover illegal activities relating to interstate and/or foreign commerce. (Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§ 1961–1968)
The RICO Act also allows the U.S. Attorney General to name any department or agency to conduct investigations under the RICO statute. If no one is designated, then the investigation is conducted by the agency in whose jurisdiction the crimes are being committed. Civil racketeering laws are used in state and federal courts in the United States.