Tell me whether you think this idea is cool or gay. Basically I want to write a fantasy version of the Godfather. A lone hero fighting an evil mob boss/magician who enslaves a city with sex, drug and gambling. There will be fight scene in casinos, brothels and gladiatorial arenas. Rate this idea with 1 = poor to 5 = excellent.
Well, that isn't the story of the Godfather. If you're remaking the Godfather, then you would be telling the story of a son from a criminal family who was going on the straight and narrow, but then is drawn back into his family's business to protect them and ends up becoming the new head of the crime syndicate and not really a hero. Which could be very interesting.
As for a guy or gal going up against the Mob in a fantasy story, we do have lots of those. In the imaginary realm area, there is Lynch's work, which is the latest in underworld stories. There is also Mieville's Presidio St. Station. With a bit more of a satirical knack to it in an imaginary realm, there is Glen Cook's Garrett P.I. series and you could also say that his more famous Black Company series is sort of in the same line, though there it's despotic, powerful rulers rather than crime syndicates.
In supernatural and contemporary fantasy stories, the magical Mob is fairly common. Jim Butcher's Dresden Files isn't a bad recent one to check out, but there are many others. You also might want to try and rent some episodes of the television series "Angel," the spin-off from Buffy, particularly the episode in which Angel, an ensouled vampire, gets taken prisoner to fight in gladiatorial demon games for a crime organization.
That the wands for guns, or more often wands and guns, approach has been used before should not discourage you. If you are doing something interesting with characters and situation, it may do very well. Essentially, we can't rate it for you unless you write it and we read it. You will have to decide how interested you are in the concept.