"Heeyuh Beeyit meee...straight ahp!"
KGB runs an illegal card casino and his customers are regular and keep him in business. If he stiffed Mike of his fair winnings his firm's reputation would lose appeal and the word would get out. It's part of the movies "rules" and if you follow it and buy into it then it makes sense. In the real world there have been legit winners who have been killed for winning but by a third party acting on behalf of the one who lost fair and square. Also, in reality I don't think a hump like Grandma would be all that effective as both an enforcer and as a brothel owner. He's not even connected to the Mafia and declares that he operates independently and collects debts as a freelancer with his "partner" KGB. Yeah that's a big bullshit bluff of a premise right there, but again this works within the rules and culture of the movie itself.
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