Study: Gambling Doesn’t Lead to Increase in White Collar Crime

Author Jay Albanese, Chairman of the Criminal Justice Department at Virginia Commonwealth University in Richmond, reviewed FBI crime data for nine casino markets. [1] His main finding is:

“The results do not support the claim that casino gambling contributes significantly to trends in embezzlement, forgery and fraud. In addition to statistical data that document arrest trends, interviews with convicted embezzlers reveal that single factors do not cause embezzlement…Given the results of interviews with several hundred embezzlers, it is clear that gambling does not cause white collar crimes.”

Studies Show There is No Direct Link Between Gaming and Crime 

Communities with casinos are equally as safe as communities without them. In fact, in some cases, the number of crimes and crime rates decreases after the introduction of casinos to a community. When crimes are reported to the FBI, the rates are calculated against the permanent population of the town without taking into account the visitor/tourist population. When the number of visitors to gaming cities is taken into account, the risk and incidence of victimization actually decreases for residents. [2]

Indian Gaming Has Been Linked to a Decrease in Crime

The only study to focus on the link between Indian gaming and crime found that “crime rates in [Indian] casino jurisdictions are (with very few, but explainable exceptions) below crime rates for counties of similar size.” [3] The explanation for this decrease in crime is better services: “It appears that the high level of tribal casino regulatory activities—security and surveillance—are a deterrent to criminal activity.”

Increase in Crime Rate in Indian Country Simply Signal Better Reporting

Where there is an increase in crime rate reported in areas with casinos in Indian country, the increase does not necessarily indicate an increase in the incidence of crime. Rather, many Indian reservations suffer from a lack of adequate law enforcement. Many Indian nations have invested their gaming revenues into law enforcement improvements, resulting in better reporting of crimes and faster response rates. Thus, an initial increase in crime rate can indicate better law enforcement reporting rather than an increase in criminal incidents.

The American Insurance Institute Does Not Exist

Perhaps the most widely quoted source for the alleged link between gambling and crime is the American Insurance Institute (AII), which has been quoted as the source for the claim that 40 percent of all white-collar crime is related to gambling. This statistic has been cited by both writers and politicians in arguing against casino gambling. [4] An investigation by professor Joseph Kelly revealed that the American Insurance Institute does not exist and apparently never did. He also found no basis to support the 40 percent statistic. [5] While there is an intuitive appeal to the notion that white collar crime is related to casino gambling, no systematic data supports this view.

Decrease in Crime

“Our data indicates that communities witnessing the introduction of a proximate Indian casino experience a substantial net decline in auto theft and robbery.” [6]