I have a question about the movie Goodfellas

They more or less state immediately before that that he's part of a protection racket. That's what protection rackets do to people who don't pay.

Though he could have been taking out a competitor. After looking it up, that is definitely the case, but I always got the impression it was a protection racket from the film. I guess they don't explain it because it's not really important to the story.