"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
- 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.)