The newspaper said authorities it described as familiar with the case said one officer has been relieved of his duties and at least a half-dozen officers, possibly more, are under scrutiny. Arrests are expected as soon as next month, the Herald said.
The bookmaking operation, located in Miami's Liberty City neighborhood, has been closed, authorities said. The probe began a year ago.
Police Chief Manuel Orosa, who oversees a department of about 1,100 officers, and a departmental spokesman did not return calls from the newspaper seeking comment on the case. Mayor Tomas Regalado said he wasn't privy to investigation details.
"To me, this investigation is not a black eye to the city or the Police Department," he said. "It's a good thing. It means we're moving forward with a better police force.
"In a police force as big as this one, some officers will do the wrong thing. But it is good to invite investigation. It shows that the police force wants to move forward and get rid of the bad apples."
The Herald said the FBI also is investigating other law enforcement officers around Miami-Dade County suspected of being involved in identity theft and tax refund schemes. Arrests also are possible before long in those cases, the newspaper said.