Money Laundering Myth and Online Gambling

Welcome back to our blog series on online gambling. In today’s blog, we are going to explore the topic of money laundering and online gambling’s impact on the whole thing. The main question we’re asking today is if online gambling makes it easier for criminals to launder money.


Now, if you take a walk down the memory lane, you might recall that we did debunk this in our “Debunking Online Gambling Myths” series. However, we didn’t really go into details. So, we’re going to take the opportunity to do that now.

Let’s start by exploring a few more myths....

The “FBI says online gambling boosts crime” argument... Let’s make it very clear – the FBI never issued a statement claiming that online gambling causes crime to grow. This argument is based on a misunderstanding of what actually happened. In September 2013, The Deputy Assistant Director of the Federal Bureau of Investigation’s (FBI) Criminal Investigative Division, J. Britt Johnson, wrote to Congress about the likelihood of online gambling causing money laundering to become rampant.

However, what Johnson wrote did not factor in regulated online gambling. The man was purely speaking from the perspective of unregulated online gambling. In that context, yes, it is possible for online gambling to benefit money launderers.

However, with regulation, it’s next to impossible. The limits on withdrawals and deposits alone, under the Bank Secrecy Act, would be tough to overcome.

The conflation problem......

Most anti-online gambling arguments conflate regulated online gambling with unregulated online gambling. This is where all the trouble starts. If legalized, online gambling will be regulated heavily; just as any other form of gambling.

… and regulated gambling isn’t going to cause crime to go up. There is enough evidence to prove this. The studies on the issue conducted in the 4 states that were the first to allow online gambling have, time and again, destroyed that rhetoric.

However, a failure to legalize and regulate WILL cause online gambling to serve as a platform for criminal activities. Operators aren’t going to drop everything and leave. They will only look to shift their operations to the black market.

Regulation, on the other hand, is very effective. For instance, In New Jersey, online gambling sites can track a player’s device using GPS. If the player cannot be tracked, he/she is blocked by the operator immediately. Other than that, there are rules preventing online gambling apps from accessing private data on the user’s phone.

Terrorism?... No. Terrorists cannot use regulated legal online gambling apps to launder money and fund their operations. The level of restrictions would make it impractical and counterproductive. This is an argument that should simply be laughed at, at this point.

Showing 3 Comments
I think that was the Columbo family wasn't it? I thought the mafia was run out of dodge lol
I remember 5 or 6 years ago in New York when some mob family got busted for doing something with an online sports book. I think that was money laundering.
Yea, I think it was the Columbo Family