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In A Game of Thrones, Daenerys mentions that slavery didn't exist in Pentos, yet, the women who were going to bathe her were Illyrio's slaves.

There came a soft knock on her door.

"Come," Dany said, turning away from the window. Illyrio's servants entered, bowed, and set about their business.

They were slaves, a gift from one of the magister's many Dothraki friends. There was no slavery in the free city of Pentos. Nonetheless, they were slaves.

The old woman, small and grey as a mouse, never said a word, but the girl made up for it. She was Illyrio's favorite, a fair-haired, blue-eyed wench of sixteen who chattered constantly as she worked.

Is it mentioned if he is at risk of being caught or punished for having the slaves?

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    Presumably, the laws are not that strict, and/or Illyrio is powerful enough to bend the rules, and/or he treats his slaves so well they have no reason to complain. – TLP Feb 12 '14 at 3:43
  • Some diplomats, in current times, use their diplomatic status to avoid labor laws and there are even accusations of outright slavery. These people are usually very powerful and in a legal sweet spot that makes prosecution more complex and thus difficult. – Mark Rogers Feb 13 '14 at 16:56
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    If the Dothraki gave you slaves; would you say "oh, no thank you; it's not allowed..."? – Möoz May 23 '14 at 5:54
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Politics and money.

NOTE: if you have not completed the series, SPOILER ALERT.

First, politics: Illyrio's refusal to bow to the law of Pentos is symbolic of his character. He believes himself above those laws. Second, money: Illyrio is probably a slave trader, so the household slaves aren't necessarily the extent of his slaveholdings.

The matter is revisited twice in A Dance With Dragons. First, in chapter 2:

"Slaves?" the dwarf asked pointedly. The fat man stroked one of the prongs of his oiled yellow beard, a gesture Tyrion found remarkably obscene. "Slavery is forbidden in Pentos, by the terms of the treaty the Braavosi imposed on us a hundred years ago. Still, they will not refuse you."

Illyrio is allied with the Targaryens, and believes that their rule is the future. In other words, he believes that he is bigger than Pentos. Further, pointing out that the law comes from Braavos, not from Pentos, implies that the law is unnatural to Pentos. That then is justification for ignoring it.

Illyrio's relationship with slavery is expanded on in chapter 5:

Tyrion pondered all that he knew of Volantis, oldest and proudest of the Nine Free Cities. Something was awry here. Even with half a nose, he could smell it. "It's said that there are five slaves for every free man in Volantis. Why would the triarchs assist a queen who smashed the slave trade?" He pointed at Illyrio. "For that matter, why would you? Slavery may be forbidden by the laws of Pentos, yet you have a finger in that trade as well, and maybe a whole hand. And yet you conspire for the dragon queen, and not against her. Why? What do you hope to gain from Queen Daenerys?"

(Emphasis added)

Illyrio responds with:

"The Beggar King swore that I should be his master of coin, and a lordly lord as well. Once he wore his golden crown, I should have my choice of castles... even Casterly Rock, if I desired. [...] My manse is large enough for any man, and more comfortable than your drafty Westerosi castles. Master of coin, though..."

This exchange reveals why Illyrio is helping the Targaryens. It also, however, reveals that Illyrio is not only a slaveholder, but also probably a slave trader. It is, then, a source of his wealth - and as the passage just illustrated, Illyrio will go very far, and take many risks, for money. Even defying Pentos law.

In answer to your second question, no: the danger/consequences of discovery are never mentioned. This supports the reader's impression of Illyrio as a powerful man, to have no concern about breaking the law.

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  • It is hinted in ADWD that Illyrio's motives are not merely that of money, but of an old debt and old friendship (i.e. Varys). – TLP Feb 12 '14 at 15:25
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    Wasn't it mentioned somewhere that they are paid a (very) small sum of money in one of the books? I seem to recall that being the loophole that prevented the 'slave' title to apply... Can't remember exactly where though. – Will F Feb 12 '14 at 18:19
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Make extra money on the sides. Wealthy people don't mind breaking the law if it means making more money, including in fantasy. It also helps feed into the picture of no one being totally 'good' or 'evil'. Yes, he's helping royal exiles, but he lies to them & has slaves.

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