Regulation

The Deadly Links between Terrorism and Online Gambling

I’ve spent quite a bit of time lately writing about the online betting laws of all countries around the world. So far, I’ve produced write-ups on at least 20 countries and have dozens more to go. During this process, a lot of my time has been spent poring over gaming legislation and old news pieces related to legislative proposals and industry spats.

One of the recurrent themes I see is the supposed link between terrorism and online gambling. The line “online gambling could be used by criminal groups to launder money and finance terrorism” must have been translated into a hundred different languages by now. It usually comes from a mid-level government official or special interest group who wants to either outlaw online gambling or add new restrictions and regulations.

Here are just a few examples from the United States:

StopInternetGambling.com

http://stopinternetgambling.com/resources-and-evidence/restore-ban-fact-sheet/

International Terrorism: International terrorist organizations are constantly seeking the means to move and hide money to facilitate their ultimate goal of purchasing and transferring chemical and other weapons of mass destruction. A Defense Department study concluded that Internet warfare will be an enormous threat to national security in coming years. Internet gaming will be a perfect conduit for terrorists to move funds for wide scale illegal and hostile purposes.”

Sheldon Adelson, Billionaire Vegas Casino Owner

http://www.nationaljournal.com/tech/what-do-terrorism-and-online-poker-have-in-common-20140210

“While the FBI is busy defending against terrorist threats and cyber-attacks, Internet gambling will give criminals across the world a foothold in every American household, attracting criminal activity not only at home but internationally…”

Senator Mike Lee

http://www.lee.senate.gov/public/index.cfm/blog?ID=227738ee-0bcb-4a2b-bb3b-ac31e56aa913

“Online gambling poses risks in all the ways you highlighted in your letter, namely money laundering, access by minors, fraud, exploitations of individuals with a gambling addiction and terrorist financing.”

Senator Diane Feinstein

http://www.lgraham.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=f8442c66-a918-da0c-9a4d-ddb201e26ae9

“I am pleased to join with Senator Graham to update the Wire Act to cover a broad range of online gambling, returning the statute to its pre-2011 interpretation,” said Senator Feinstein. “Many online gambling sites fail to screen for underage gamblers, do nothing to prevent money laundering and offer no recourse for fraud or other criminal acts. For most Americans, including children, gambling sites are only a few clicks away, and I believe Congress has a responsibility to prevent abuses from occurring.”

These examples all come from the United States but believe me, you seem them in other countries as well. Terrorism isn’t just an American concern; it’s the big boogeyman for politicians around the world.

Impure Motivations

I tend to be skeptical of the terrorism argument when I compare that to the possible motivations behind the people expressing the concern of terrorists. For example, Sheldon Adelson pledged to spend $150,000,000 of his own money to stop online gambling because of terrorism and to protect the kids.

Sheldon expresses these concerns without even a hint of irony. He has earned billions of dollars in the brick-and-mortar casino industry. Does he not worry about the families of his patrons? They have children too. Forget that his land-based gambling model is increasingly threatened by the internet, he’s genuinely concerned about the children.

Interestingly, Sheldon’s business model isn’t completely free from the problems of money laundering and crime. He recently paid $47 million to the US government to settle an investigation into his casinos for laundering money for a Mexican drug cartel. But hey – it’s the internet we need to stop!

I have similar questions concerning the motivations of lawmakers who claim online gambling is going to open the door to terrorists and make all our kids go crazy with addiction. In March, Utah Representative Jason Chaffetz prepared a bill that would later be sponsored by Sen. Lindsey Graham to ban online gambling.

The DailyCaller.com noticed that the file properties of the House bill indicate that it was written by Darryl Nirenberg, now a lobbyist for Adelson’s Las Vegas Sands Corporation. This is perhaps the most sickening part of it all. Have we seriously sunk to the point where lobbyists are actually writing legislation?

The more you dig into these kinds of things, the harder it gets to accept their motivations as driven by a genuine concern of terrorism and protecting the children. It looks more like a simple move to prop up an aging business model that refuses to adapt to changing times.

In an age where we seem to obsess more over reading terrorists their rights, giving them civilian trials in the US and releasing them onto the battlefield, I have a hard time swallowing the argument that we’re so serious about terrorism that we need to further encroach on Americans’ freedoms. It will be so much easier to give the argument credence when we start actually killing terrorists again.

Has there ever been a terrorist attack linked to online gambling?

You’ll be hard-pressed to find any evidence of an act of terrorism being funded via online gambling. There isn’t any. I did some digging and was able to come up with a couple of news reports that do appear to make a solid connection between terrorists and gambling sites.

These news reports are difficult to find and only make a passing mention of online gambling. In one article from 2007 that goes on and on about the different methods terrorists use to launder money online, it mentioned internet gambling just once:

“According to documents gathered by law enforcement officials, the three men used stolen credit card numbers at hundreds of online stores to buy items that fellow jihadists might need in the field. Authorities also say the men laundered money from stolen credit card accounts through more than a dozen online gambling sites.”

There really isn’t any hard evidence that online wagering is some kind of secret weapon used by terrorists. I can imagine it being used to launder money, but there are methods to combat that. Many gaming sites restrict player-to-player transactions and already watch for evidence of collusion at their poker tables. Sites that operate in licensed jurisdictions are required to monitor for suspicious activity and report suspected criminal activity to the authorities.

If terrorism really was a legitimate concern, banning online wagering and pushing it further underground would pretty much be the exactly wrong thing to do. But it’s not a legitimate concern. It’s just something people say to appeal to our base fears and create at least some sort of pretext for passing protectionist legislation for their donors.

Forcing the Issue with Fear and Ignorance (and Lies)

The most frustrating thing for poker players and other liberty-minded Americans is that so much of the issue is marred by fear and ignorance. On one side, we have politicians and lobbyists claiming that online gambling will help the terrorists, that it will ruin our kids’ future and that you’ll go to jail forever if you get caught.

What’s crazy is major news publications roll right along with it. Most of the reporting on the legal side of gambling and poker is downright irresponsible. Journalists make wild claims that it’s illegal for Americans to play poker online (false), that it’s illegal to bet on horses online (false) and that it’s impossible to protect the children (false) on a regular basis.

This week’s Newsweek serves as a perfect example:

Just take a second and look at that picture. It’s so ridiculous: you have a 12 year old kid with a sad face holding an iPad and a poker hand. Sure seems quite propaganda-y already. It gets worse. The rest of the article goes on to lambast a 2011 ruling made by the US Department of Justice in which it ruled that the Wire Act of 1961 only applies to online sports betting and not poker or casino games.

I was hoping Newsweek would treat the subject with some semblance of balance. That was not to be the case. But OK, fine – if they’re going to run an opinion piece, at least they’ll get the facts right… right? No. This article is full of innacurracies beginning with the opening paragraph:

In 2007, the head of the FBI’s Cyber Crime Fraud unit, Leslie Bryant, issued a stern warning to Americans: “You can go to Vegas. You can go to Atlantic City. You can go to a racetrack. You can go to those places and gamble legally. But don’t do it online. It’s against the law.”

Wrong. The quote may have come from the FBI, but it’s inaccurate. It is not against the law to gamble online in the United States. You wouldn’t know it of course if you only got your news from the mainstream media. There is not a single federal law in the United States that makes it a crime to place a bet over the internet. Not one.

Washington State has a state law that makes it a crime to play poker online, but that law has not once been enforced. The vast majority of states have no laws against online betting and there is not one federal law that makes it “against the law.” The opening paragraph to this news story isn’t just accurate; it’s completely contrary to the truth.

The article also incorrectly states that the DOJ’s ruling only preserved the ban against online horse racing. Wrong again. Online horse racing has been legal in the United States for years! Numerous horse racing sites are headquartered right here in the US and are licensed to offer real money games to US citizens.

You see, offtrack horse race betting has been legal in the United States since the passage of the Interstate Horse Racing Act of 1978. That law was further amended in 2000 by Congress to explicitly expand the act to include betting over the telephone or “other electronic media.”

Newsweek got that one completely wrong as well. It wasn’t just a little wrong, but 100% completely incorrect. These are just two examples of the many errors, omissions and opinions passed as facts in the article. This is incredibly lazy and irresponsible journalism. You can see a further dismantling of the article here.

Actually, I’ll take it a step further. The article gets so many facts so completely wrong that you can’t just explain it away with sloppy journalism or a lack of research. This was an intentional propaganda piece filled with intentional lies. Now, you just have to wonder who convinced the “journalist” here to trash his integrity for this one article.

Certain lawmakers and special interest groups (such as Vegas casino mogul Sheldon Adelson) can’t seem to pass the legislation they want, so they resort to distorting the issue, telling lies, omitting data, bribing lawmakers and playing on peoples’ fears.

Sometimes it works, sometimes it doesn’t. When it doesn’t work, they just press onward with their lies and bribes. Really, how many times are we going to pass sloppy legislation to “stop the terrorists” or “protect the children”?

The other question is what do these people have against liberty? Is it really so bad to let adults decide where to spend their own money in their own homes? People like Sheldon Adelson have no problem whatsoever with accumulating billions of dollars letting people gamble at their Vegas resorts. But when it comes to the internet, they’re suddenly worried about the children.

Dishonest journalism like that Newsweek piece linked-to above is just the cherry on top. It’s bad enough when anti-liberty politicians and casino moguls tell their lies without the media acting as a megaphone for disinformation.

Hopefully this all shows why I’m just a tad bit skeptical of all those “dangerous links to terrorism” that we keep hearing about. Any time you walk into a discussion of online gambling legislation, there’s a very good chance you’re less than five minutes from hearing the word “terrorism.”

The terrorism argument is so common at this point that people seem to just vomit it forth out of habit. Others leap forth to lap it up without any thought of just what it is they’re ingesting. It becomes accepted wisdom but nobody stops to ask if it’s even valid in the first place. And if it really is a concern, they don’t even attempt to consider methods for thwarting money laundering other than banning all online gambling.

So is there really a link between terrorism and online gambling? The evidence supporting such a conclusion is limited to say the least. Sure, you could say it’s possible that a gambling site could be used for money laundering. Anything is possible.

If it really is a concern for the authorities, there are very easy controls that can be implemented (and are implemented in Europe) that make it difficult to simply move money from one person to another. Electronic money trails are difficult to hide these days.

The other big problem with the claim is that it’s been overused to the point where people just roll their eyes. Everything is somehow related to terrorism it seems. See this related story for further reading.

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