A racket, according to the current common and most general definition, is an organized criminal act in which the criminal act is some form of substantial business, or a way to earn illegal money either regularly, or briefly but repeatedly. A racket is therefore generally a repeated or continuous criminal operation. However, originally and often still specifically, a “racket” referred to a criminal act in which the perpetrator or perpetrators fraudulently offer a service to solve a nonexistent problem, a service that will not be put into effect, or a service that would not exist without the racket. Conducting a racket is racketeering. Particularly, the potential problem may be caused by the same party that offers to solve it, but 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", which promises to protect the target business or person from dangerous individuals in the neighborhood and then either collects the money or causes damage to the business until the owner pays. The racket exists as both the problem and its solution, and it is used as a method of extortion.
However, the term "racket" has expanded in definition and may now be used less strictly to refer to any continuous or repeated illegal organized crime operation, including those that do not necessarily involve fraudulent practices. For example, "racket" may be used to refer to the "numbers racket" or the "drug racket", neither of which generally or explicitly involve fraud or deception with regard to the intended clientele.
Racketeering is most 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.
In 1990, local Indian extremists killed the chairman of an Assam tea production company. They then called a meeting of tea executives and demanded protection money. They were refused, and since then there has been repeated violence and a steady stream of kidnappings.