Illegal Gambling and Its Operation via the Darknet and Bitcoin: an Application of Routine Activity Theory

This article aims to contribute to criminology literature by applying the routine activity theory which states that crimes can occur when a suitable target, the absence of a capable guardian, and a motivated offender all come together at the same time. This article also focuses on the psychology and sociology of two groups, online and offline gamblers. It showed that between the two groups problem gambling tends to happen more online due to the anonymity, constant availability, and the ease of electronic payments. Three principles that can be applied to this study are relativism, parsimony, and determinism. With the principle of parsimony we explain the phenomenon with the routine activity theory where we can see how the principles of relativism and determinism come into play. With an ever growing market for illegal gambling it will draw more motivated attackers into the gambling space which will cause more illegal activity.

This article questions the difference between Darknet and Surface web bitcoin gambling sites, what features encourage online gambling, how are illegal online gambling activities are potentially linked to engaging in other online criminal activities, and how do owners of these sites promote and advertise their sites while evading law enforcement detection. The article also hypothesizes that these events can be explained with the Routine Activity Theory.

What are the Differences Between Darknet and Surface Web Bitcoin Gambling Sites?

One of the differences found is the difference in daily visitors on the darknet and surface web. The surface web on average has 3,621.9 daily users while the darknet has 315.56 users. There is also a difference in registration requirements between the two. On the surface web 72.4% of websites require users to register and only 16.7% of users on darknet websites are required to register. One thing to note though is that darknet users can not be properly monitored, but surface web gambling sites tend to be more popular.

What Features Encourage Online Gambling?

This study found that promotions, ease of transactions, anonymity, and availability made it attractive for users. Some of the websites offered a bonus system which gave users a free bet without the need for any new activity which encouraged users to stay on the site. The addition of bitcoin deposits to gambling sites also made it easier to deposit online due to the privacy that comes along with bitcoin and the simplicity of spending money online. Another thing is the inherit nature of anonymity and availability that comes along with online gambling. You can do it anywhere. Your room, a coffee shop, on the move on your mobile device, or even in class.

How are Illegal Online Gambling Activities are Potentially Linked to Engaging in Other Online Criminal Activities?

According to the article numerous scams take place in the online gambling ethos due to the high number of gamblers who are trying to hit it big with a small bet. Imagine all the sites out there that aren’t really gambling sites, but just a donation to a savvy web developer who can make a cool slot machine. The article also found that many criminal organization use these sites to engage in criminal activities like fraud, theft, or even extortion. With virtual flows of cash, complex and hard to trace payment processing, the massive volume of users, and tax-free winnings can breed an environment that criminals can thrive in.

How do Owners of These Sites Promote and Advertise Their Sites While Evading Law Enforcement Detection

This study found that owners of these sites promote their sites on blogs (15.1%), Google plus (11.3%), Reddit (11.3%), Facebook (30.2%), Bitcoin forums (13.2%), Faucet a crypto reward system (9.2%), and a variety of other systems like a free bet promotion or jackpot advertisement (22.6%). Owners of the sites manage to evade detection by using proxy websites, domain proxy services, web hosting companies, or multiple relay servers placed in different jurisdictions.

How Does Routine Activity Apply?

The routine activity theory which states that crimes can occur when a suitable target, the absence of a capable guardian, and a motivated offender all come together at the same time. With the thousands of eager gamblers excited to spend their money to hit it big provides many suitable targets online. Along with the anonymous nature of the internet it brings the absence of a capable guardian to safeguard users on gambling sites. This brings in motivated offenders eager to take their money and easily evade detection.

Research Methods

This study conducted an empirical review of illegal online gambling websites. It compares to the different features of surface web and darknet gambling sites. They collected the data from May to August 2017 using bitcoingambling.com and The Undernet Directory. They performed multiple regression analysis to find a pattern of online gambling and see what encourages users to stay and gamble. One of the problems noted is the difficulty of finding the true number of websites on the darknet and surface web due to the continuous changes of websites.

Data and Analysis

The data points used in the study:

  • Visitors per day
  • Ip owner
    • Web Hosting
    • Certified Delivery Network
  • Registration Required
  • WHOIS Privacy Service
  • Required Information
    • Username
    • Google Authentication
    • Private URL
    • Bitcoin Address
    • Email
    • Password
    • Date of Birth
    • Proof of Deposit
  • Type of Game
  • Deposit Method
    • Bitcoin
    • Ethereum
    • Litecoin
  • Withdrawal Method
    • Bitcoin
    • Ethereum Litecoin
  • Promotion
    • Blog
    • Google plus
    • Reddit
    • Bitcoin Forum
    • Faucet
    • Other
  • Language
  • Features
    • Live Chat
    • Live Betting
    • License Verification

With this data the most interesting thing they found is that gamblers are more likely to use sites that do not require registration. This also adds to the point of how anonymity is a crucial part of online gambling.

The two concepts that tie in well with this subject are sampling and victim precipitation. Due to the constant flux of website on the web it is impossible to get a true representation of the number of websites so the researchers used a sample. I also think that victim precipitation can tie in here because the study shows what kind of activity may lead to a cyber offense in the gambling space with the routine activity theory. With eager gamblers testing their luck on illegal online sites with the absence of a capable guardian it left them vulnerable to a motivated offender.

This study focuses on the marginalization of problem gamblers online. With an environment filled with anonymity, ease of access, and constant availability breeds a perfect environment for problem gamblers. This is an even bigger issue in illegal online bitcoin gambling due to the lack of required information which allows youth gamblers to come into the mix and form a horrible gambling addiction.

The overall societal contribution of this study are mainly for the study of criminology. They show how these illegal online casinos manage to encourage users to join, how owners avoid detection, and how these sites may be linked to other illegal online activity.

https://vc.bridgew.edu/cgi/viewcontent.cgi?article=1064&context=theses