ME, AFTER A LONG DRAG ON SOME HERB MY GRASS TYPE POKEMON MADE: It's just like, how can Giovanni be the mafioso to worry about in a world where all the veterinarians and all the cops are members of the same family? That's just straight nepotism, you know?
Celadon Game Corner was a front for the Team Rocket Hideout, and made money off of child-gambling
With all the TMs, items, and rare pokemon a 12 year old could wring out of the Game Corner, I don't think they were profiting off the gambling.
Celadon game corner being a way for Team Rocket to offload items that were too hot to handle onto children makes so much sense though.
I’ve always had a headcanon that Giovanni (in the games, not the anime) is a former Pokemon champion that got bored. He has everything he needs, he’s not in it for the money. He’s in it for the thrills. That’s why he makes himself the hardest gym on the continent, that’s why he was interested in those fossils, that’s why he had his scientists make Mewtwo: he was desperate for a real challenge.
And that was why he was so calm about this 12 year old tears his empire apart. Because he’s actually thrilled. Here we have a real challenge, someone who can give him a proper fight.
This is also why we find Red on top of a mountain in Gold and Silver, and why he just wearily fights us without a word. After becoming the champion and defeating Mewtwo…Red realized he understood how Giovanni became Giovanni, how after spending your formative years in Pokemon battles you can lose sight of the Pokemon and just become obsessed with the battles.
I like to think beating Red on that mountain gave him perspective as he walked down, all his Pokemon fainted, realizing Giovanni was wrong and that he was in danger of being the same kind of wrong. That focusing on the challenge meant you lost sight of the bonds with your Pokemon. That he apologized to them after they were healed, gave them all hugs, and promised them they could rest after one more fight.
Then he went back to Giovanni and explained this all in the only language the older man would understand: a final battle. Did Giovanni learn his lesson? Would he keep working on his criminal empire?
Maybe. Maybe not. Either way it wasn’t Red’s problem anymore.
Red took his championship winnings right now and runs the largest Pokemon ranch on the planet, where all his captured Pokemon are now free to live their lives if they choose and if they leave, he only asks that they say gooodbye so he doesn’t worry. Ever so often, some kid comes by to challenge the one time champion, and he’ll do so with whatever mons are willing to fight. Some of those kids comment how easy the new Viridian city gym leader is.
Giovanni comes by for those fights. Once a year. He loses every time. There’s been no sign of team rocket. Every time Giovanni thanks Red. Never explains why, but Red gets its.
Sometimes you need to be kept humble.
