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From the Godfather:

Michael: Is my credit good enough to buy you out?

Moe: Buy me out...

Michael: The casino, the hotel. Corleone family wants to buy me out.

Moe: No, I buy you out, you don't buy me out.

Michael: Your casino loses money. Maybe we can do better.

Moe: Do you think I'm skimming off the top, Mike?

I searched for skim off, but didn't find anything. So what could it mean in that context?

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Skimming (or skimming off the top) is a type of fraud. From Wikipedia:

A form of white-collar crime, skimming is slang for taking cash "off the top" of the daily receipts of a business (or from any cash transaction involving a third interested party) and officially reporting a lower total.

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"skimming off the top" is short for "skimming cream off the top of milk". The cream is the most valuable part (in terms of calories and essential vitamins) of milk.

In most businesses, the profits are a small percentage of the money that passes through the business. If an embezzler takes a small percentage of the money that passes through, they can take all of the profits. As a side benefit, unprofitable businesses don't have any taxable income.

It is a crime to embezzle, and it is a crime to commit tax-fraud. But this context is a conversation between criminals, who have committed much worse crimes than embezzlement and tax-fraud.

As a hypothetical example:

  • Suppose $ 10,000,000 is bet on roulette.
  • Suppose the casino wins $ 526,000 of that money.
  • Suppose the casino has $ 300,000 of operating expenses (salaries, utilities, advertising, et cetera) to attract the betters who made those bets.
  • Suppose the casino has $ 100,000 of depreciation of the buildings and equipment used to attract those betters.
  • Suppose the casino spends $ 100,000 in interest (and other financing costs) to repay the people who provided the money for the buildings and equipment.
  • Suppose half the taxable income needs to be paid as income taxes.
  • Then there should be a net profit of $ 13,000.

Now suppose that Moe "skims" one-half of one percent of the $ 10,000,000 of bets. Instead of a net profit of $ 13,000, there will be a net loss of $ 24,000. The casino will not be able to afford to fix everything that wears out, and will deteriorate. (And Moe will probably not pay taxes on this $ 50,000.)

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