Myth:
Online gambling presents greater risks of addiction and abusive gambling.

Fact:
Scholarly and scientific evidence does not support this claim. Online gambling can be better monitored to avoid problem gambling than traditional forms of land-based gambling. Traditional gambling devices, such a slot machines in casinos or video lottery machines at race tracks, are either as, or even more, addictive than online gambling. The leading credible scientific evidence does not support the conclusion that online gambling is more addictive than land-based gambling. The oft-repeated political propaganda that “Internet gambling is the crack cocaine of gambling” is absolute and complete misquote. The person attributed with this statement, Dr. Howard Shaffer never made such a statement. Dr. Shaffer’s only reference about “crack cocaine and gambling,” pertained to electronic gambling devices (EGDs) available in the United States –such as video lottery terminals and not online gambling.

Details:
While United States officials frequently contend that online casinos and sportsbooks are susceptible to money laundering, they have never cited an actual example of such activity. If money laundering in online gambling was as apparent as these officials claim, then, by their logic, any foreign business could be shut down for money laundering on mere allegations of such activity. There is no money laundering in the online gambling industry. The United States has issued official government studies concluding that online gambling is not a likely or accessible avenue for money laundering because the identities of the gamblers are known, the financial transactions between the bettors and operators are all in an electronic format, and all of the wagering is recorded. By contrast, land-based casinos in the United States have had documented incidents of actual money laundering due to the large volume of anonymous cash transactions taking place at casinos. Within the last two years, money laundering scandals have erupted in the United States land-based casino industry, such as the case of large casinos failing to complete anti-money laundering forms for winning customers and a criminal syndicate from Japan laundering money through Nevada casinos. The United States government alleged that a group of alleged Muslim terrorists in Buffalo, New York were laundering money through a local casino.

To the extent there is a legitimate concern about money laundering in the gambling industry, the concern could be resolved by encouraging the use of credit cards and other secure forms of electronic payments for online gambling and regulation of the online gambling industry. That way, there would be a regulated system that ensured an “electronic footprint” in all gambling transactions. This would eliminate any remote risk of money laundering in the online gambling industry.

References:
Howard J. Shaffer, Ph.D., “Internet Gambling & Addiction,” Harvard Medical School, Division on Addiction (16 January 2004). This report states: “the risks for gambling on Internet linked computers are not meaningfully different from the risks associated with gambling on computers that have no remote link” and “this review leads to the opinion that gambling with [electronic gambling devices such as slot machines, or EGDs] is gambling with EGDs—whether these are connected to the Internet or not.”

Professor Mark Griffiths and Dr. Richard Wood, “Is Internet gambling more addictive and/or problematic than other forms of gambling?,” The International Gaming Research Unit, Division of Psychology, Nottingham Trent University (2003)

American Gaming Association, Fact Sheet: Pathological Gambling.

National Research Council, Committee on the Social and Economic Impact of Pathological Gambling, Pathological Gambling: A Critical Review (National Academy Press, 1999).