Online Gambling and Crime: A Sure Bet?

Dr James Banks


The explosive growth of the internet as a public and commercial vehicle has provided new opportunities for gambling based activities to take place online. Facilitated by the development of the first gambling software, by Microgaming in 1994, and encrypted communication protocols, which enable online monetary transactions, by Cryptologic in 1995, Antiguan based company InterCasino became the first internet gambling site to accept an online wager in January 1996. By the end of the year, approximately 15 sites were accepting wagers, rising to 200 by the end of 1997, 650 by the end of 1999 and 1,800 by the end of 2002. Today, there are in the region of 2,347 listed gambling sites in existence, including 768 casinos, 524 poker rooms, 430 sportsbooks, 19 betting exchanges, 377 bingo sites, 45 skill games sites, 94 lottery sites, 13 backgammon sites and 16 mahjong and rummy sites. These sites are spread across 661 owners who operate out of 74 jurisdictions, including Antigua and Barbuda, Australia, Costa Rica, the Dutch Antilles, the Kahnawake Mohawk reserve in Canada, Malta, and the United Kingdom.

This marked growth in online gambling appears to stem from a number of inter-related factors. First, online gambling offers an extremely lucrative business venture for many. The entertainment and leisure industry has recognised that cost effectiveness of online gambling sites, as start-up and operating costs are considerably less than those of their land-based counterparts. Second, significant sectors of the world populace have the potential to access online gambling sites. With computers becoming less expensive, simpler to use and more readily available, the opportunity for consumers to partake in anonymous and effortless gaming from the comfort of their own home or workplace has increased substantially. Third, internet gambling services have continued to enhance the consumer’s online experience, through sophisticated gaming software that combines live remote wagering and increasing realism with multi-lingual websites, integrated, multicurrency e-cash systems and improving customer service, making gambling online an appealing alternative to land-based gambling operations. In sum, the online gambling experience is likely to continue to be desirable to consumers because it offers frequent and interactive gaming that is characterised by accessibility, affordability and anonymity. Moreover, as the popularity of online gambling continues to grow, the market will undoubtedly be an attractive area of expansion for land-based gambling operators, the leisure industry and business investors alike.

However, the development of such gambling technology has not been accepted uncritically. The last decade has witnessed a growing body of research that has explored the deleterious social effects of online gambling. Of particular concern is the ease with which young people and other vulnerable populations can access online gambling sites, increases in gambling, money spent gambling, problem gambling and gambling addiction, public health and public safety. Yet, to date, there has been very little empirical research into internet gambling and crime. This is surprising given that the scale and density of internet gambling sites, the voluminous number of players, and the large quantities of e-cash available as tournament prizes or held in online gambling accounts, provides a marketplace replete with criminal potential. Nevertheless, little is known about the frequency, types, techniques and organisational dynamics of internet gambling related crime nor has there been any consideration of the degree to which such crimes go undetected.

Cyberspace has been depicted as a ‘world wild west’, with the threat of e-criminality looming large over an increasingly globalised world (Sandywell 2010). Unsurprisingly, the significant quantities of e-cash held in online gambling sites and flowing between them and various ancillary organisations presents a digital network ripe for criminal exploitation. Internet gambling sites can operate as source of criminal activity, as a vehicle for crime or support for other criminal enterprise. In such contested spaces, gambling site operators, employees, customers and unwanted ‘third parties’ anonymously intermingle creating the opportunity for multi-various forms of criminal activity and constructing rhyzomatic relations between perpetrators and victims.

This paper seeks to simplify this dense tangle of virtual villains and victims and present a overview of the principal forms of e-crime committed by gambling site operators and their employees, users of online gambling sites, and ‘criminal entrepreneurs’, whom either utilise gambling sites as a conduit for nefarious activities or specifically target gambling operators and their clientele. It offers an initial assessment of the forms, features and organisational dynamics of crimes that take place in and around internet gambling sites. Moreover, the paper identifies the opportunities and complexities in undertaking empirical research in this area, but also outlines a research agenda for this field. In turn, it is envisaged that this paper will act as a catalyst for discussion, debate and exploration into the potential criminogenic effects of online gambling, the victimisation of online gambling operations and their clientele, and the degree to which technological, educational and legal frameworks can reduce the potential for crime and victimisation in and around online gambling sites.