Underworld horse's retracted organ (8)
I believe the answer is:
gangland
'underworld' is the definition.
(I've seen this before)
'horse's retracted organ' is the wordplay.
'horse' becomes 'nag' (nag is a kind of horse).
'retracted' shows that the letters should be reversed in order.
'organ' becomes 'gland' (gland is a kind of organ**).
'nag' backwards is 'gan'.
'gan'+'gland'='GANGLAND'
(Other definitions for gangland that I've seen before include "haunt of criminals?" , "Where to find mobsters" , "Criminal underworld" , "World of organised crime" .)