CSIG Debunks iGambling Terror Financing Claims

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Thursday, February 2nd, 2017 | Written by Stephen Smith

While the number of people openly opposing the legalization of online poker pales in comparison to those calling for its regulation, the anti-online poker movement can have a very loud voice. One group called the Coalition to Stop Internet Gambling (CSIG), for instance, famously created a viral video claiming that online poker sites helped provide funds for criminal enterprises and terrorist organizations.

The point raised in the alarmist video even inspired CSIG Co-Chair and former New York Governor George Pataki to write an op-ed piece in USA Today, with an extract reading:

“Online gambling might be coming to a computer near you, and while it may seem like the only risk is on the player, the FBI fears it will be used by terrorists and organized crime rings to launder money.”

After the ad followed by the accompanying article debuted, the industry responded and said that the claims were blatantly false. Now, it seems that the U.S. Congress agrees.

Trying to Create Fear

Recently, the U.S. Congress released a report entitled “Stopping Terror Finance: Securing The US Financial Sector,” that outlines how individuals and businesses could use the American financial system to launder money in order to fund terrorist activities. While the report does not mention online gambling at all, it does, however, point out some areas of the Internet that are potential avenues for the flow of money into the pockets of terrorist.

Specifically, the report points out that peer-to-peer sales websites and online auctions provide a platform for terrorists to sell looted antiquities in the United States and abroad. It also mentions that social media has become an important tool for recruiting disenfranchised and disillusioned individuals. Being that the report is 200 pages long and never once mentions online gambling as an area of concern, it’s clear that Congress does not see poker and other iGaming sites as potential threats.

Politically Motivated Falsehood

The case against the link between online gaming and money laundering becomes even greater when you consider that one of the authors of the report, Pennsylvania Representative Mike Fitzgerald, is part of the effort to ban online poker through the Restoration of the Wire Act or RAWA. Surely if he could have linked online poker to terrorism in any way, he would have done so to strengthen his argument against this form of gambling.

So where did the Coalition to Stop Internet Gambling’s assertion that online poker is linked to terrorism come from? An examination of the facts indicates that the source was their own imaginations. The CSIG’s infamous video claims that the Federal Bureau of Investigation actually pointed out the dangers of money flowing through online gambling sites, but a close look at the claim shows that wasn’t the case at all.

Origin of Claim

In September 2013, the FBI wrote a letter to Congress in response to a letter sent by the legislature asking the organization to weigh in on the subject of online gaming and money laundering. The FBI’s reply states that online gambling sites have the potential to be used for money laundering, but that sites could take steps to prevent this. They also indicated that individuals using these site to launder money would be easy to detect, but never once did the letter even mention terrorism at all.

While it’s unlikely that groups like the Coalition to Stop Internet Gambling and online gambling opponents like Sheldon Adelson will be quieted by this new report, the facts speak for themselves. At this point, the claim that online poker funds terrorism just doesn’t hold water.

PPA Responds

In the meantime, the Poker Players Alliance Executive Director John Pappas welcomed the report released by the FBI, which he described as a straightforward analysis of the potential threat of terrorism posed by various financing channels. Pappas subsequently highlighted the fact that internet gaming was never mentioned on the report, while RAWA was also not mentioned as a means of combating terrorism. Pappas then rightfully criticized the PPA’s opponents for their “reckless claims”, before pointing out that regulated iGambling cannot be considered a conduit for terrorism. Elaborating further, the PPA Executive Director stated:

“In fact, attempting to engage in such activities on a regulated iGaming website would be perhaps one of the dumbest moves a criminal could make. Criminals and terrorists are smart enough to avoid iGaming’s transparent and auditable safeguards. I only wish iGaming opponents were smart enough to stop their fear mongering.”