So to sum it up:
CAPT. PANAKA said:
You can’t take Her Royal Highness there! The Hutts are gangsters… If they discovered her…
True. The hutts are mafia-type crime lords who control spice smuggling much like the Al Capone style of gangster who smuggled the hooch and laundered money, extortion, etc.
QUI-GON said:
It’s controlled by the Hutts…
True, but only in the sense that the scum of the Trade Federation isn't there. But the TF had legal agreements with system governments, where I don't think the Hutts did. Aside from the Hutt planet (Nar Shadda? - It's been a long time since I've read any EU), I don't think there would be any Hutts in the Senate representing Tatooine.