By relying on a broad rational choice perspective, this chapter explores the key mechanisms underpinning the workings of organized crime and specifically protection rackets. It first defines organized crime in terms of its attempt to monopolize markets, and then the chapter explores the factors that may lead to the emergence of criminal monopolies. Next, it discusses some distinctive features associated with protection rackets, with a focus on the nature of protection, its varieties and price. The chapter then discusses some of the challenges faced by illegal protectors. Finally, it critically assesses the interplay between globalization and organized crime and reviews a new framework for interpreting transnational organized crime operations.