Exposing the Dark Side of Gambling Addiction

DRUGS AND GAMBLING: BEYOND MERE COINCIDENCE

By Annie Mueller
For Casino Watch Foundation

Once is just chance; twice is a coincidence. When numbers reach higher consistently, we need to acknowledge a real connection. True, many gamblers are retirees or family folks just having a good time, just wasting a little money. Also true is that many gamblers are involved in far more than simple gambling. Chad Hills, gambling analyst for Focus on the Family Action, said that “[a]pproximately 60 percent of Las Vegas arrestees associated with gambling, ended up testing positive for at least one drug in their system” (1).

Researcher Erik H. B. Feijen finds “robust evidence that state-level casino gambling revenues... are positively associated with these drugs possession arrests, even after controlling for the scale of casino activity, state-level (drugs) arrests and other regional characteristics” (2). Specific cases range from “small-time,” individual drug arrests (3) to entire drug-smuggling operations (4) to many drug-related money laundering activities. Money laundering is a common enough problem at casinos that in 2005 the U.S. Immigration and Customs Enforcement Unit set up a booth at the 5th Annual Global Gaming Expo in order “to educate the international casino and gaming industry on the vulnerabilities of money laundering through casinos” (5).

But “education” is not always the source of vulnerability in casinos. Simple ignorance does open up a plethora of possibilities for criminal activity; so does conscious denial of the criminal problem or, worse, voluntary involvement in it. Ignorance, denial, and involvement on the part of casino executives and employees contribute to the drug and money-laundering scandals that continue to occur across the U.S. in gambling establishments.

A December 2005 U.S. Money Laundering Threat Assessment noted the “notable development... of Native American casinos... These tribal casinos are mov- ing rapidly from relative obscurity within the casino industry to a prominent position with ample potential for money laundering and other types of financial crimes.” Additionally, the report stated that “[a] constant threat at casinos is insiders taking advantage of their position either to steal or assist others with money laundering” (6).

Mercury News reported the July, 2007, arrest of an alleged drug smuggler who purportedly “laundered millions of dollars from illegal drug sales at Las Vegas casinos and elsewhere” according to the U.S. government (7).

Those involved often stand to gain in illicit profits much more than they risk losing to regulatory fines and taxes if they, or their casinos, are incriminated in such activities. Much more than education is needed; what is needed is an end to the legalized gambling that so easily creates – and maintains – these criminal opportunities.

1. Focus on the Family Action – Citizenlink.com. “Gambling Cities Linked to Drug Abuse.” 23 August 2007.
http://www.citizenlink.org/content/A000005336.cfm?eafref=1
2. Social Science Research Network. "Estimating the Impact of Illicit Drugs Use on Gambling Behavior: Evidence from the U.S. Casino Industry and Drugs Arrests" (January 24, 2007). Feijen, Erik H.B.
http://ssrn.com/abstract=951843
3. For example, from Online Casino News: “Timothy M. Hillenbrand of Citrus Heights, California, has been sentenced to two years in jail after getting caught with $25,000 worth of cocaine, ecstasy and marijuana, which he was planning on selling at a Nevada casino.” OCN Staff. 15 November 2005.
http://www.onlinecasino­ news.com/20051115/man_caught_with_drugs_in_nevada_ecd.aspx
4. A crime ring operating out of Melbourne brought Asian gamblers into their operations: [the crime ring] “offers loans to gamblers who have accrued gambling debts, and when the debts are not paid on time, they offer the indebted gamblers an opportunity to pay off the loans by smuggling drugs.” Online Casino News. 13 August 2005.
 http://www.onlinecasino­ news.com/20050813/organized_crime_used_crown_casino_to_attract_drug_runn ers_and_launder_ded.aspx 
5. U.S. Immigration and Customs Enforcement; The Cornerstone Report, Volume 2, Issue 3. “ICE Gets Its Message Out To The Gaming Industry At The G2E Expo.” 
http://www.ice.gov/pi/cornerstone/reports/CornerstoneReports_122805_Web4.htm
6. U.S. Treasury. “U.S. Money Laundering Threat Assessment.” December 2005. 60­ 61.
http://www.ustreas.gov/offices/enforcement/pdf/mlta.pdf
7. San Jose Mercury News. “Alleged Drug Trafficker Jailed in U.S.” Mark Sherman for the Associated Press. 24 July 2007.
http://www.mercurynews.com/ci_6448885>