First Monday

Managing Internet gambling in the workplace by Mark Fox, Larry Phillips and Ganesh Vaidyanathan

Managing Internet gambling in the workplace by Mark Fox, Larry Phillips and Ganesh Vaidyanathan
This paper reports on the findings of research relating to Internet gambling in the workplace. We then examine technologies by which employee gambling can be limited or monitored. While Internet access is a productivity tool allowing employees to communicate rapidly, perform research and engage in e-commerce, the Internet also has the potential to be a major distraction allowing employees to play games, shop while at work and even engage in online gambling. Increasingly the issue of Internet access has shifted from a strictly information technology (IT) matter to a human resource (HR) management one. Therefore, we conclude the paper with a discussion of some of the more prominent human resources issues that are associated with online gambling within the workplace.


Using technology to monitor or control workplace gambling
Human resources implications of Internet gambling





The Web@Work survey examines cyber-addiction in the workplace (WebSense, 2002a). The survey involves two samples (one sample of 305 Internet-enabled employees and another of 250 human resource managers). Employees were asked whether they have become "addictive or compulsive" in their use of the Internet. A remarkable 25 percent of employees responded in the affirmative to this question. Employees were also asked what forms of Web activities (other than e-mail) they believed were most addictive. Online gambling was rated as the fifth most addictive activity (by eight percent of respondents) behind shopping (24 percent), news (23 percent), pornography (18 percent), and ahead of auctions (six percent). Furthermore, only two percent of respondents indicated that they accessed gambling services in the workplace.

A related survey, The Internet Misuse Survey 2002, focused on 544 personnel managers and officers who employed an average of 2,500 staff (WebSense, 2002b). Seventy-two percent of those surveyed reported having dealt with some form of Internet abuse, with one in four companies having dismissed employees for Internet misconduct. Also, 40 percent of those companies had fielded complaints by co-workers about colleagues wasting time on the Internet. Most (69 percent) of these dismissals were for pornography; however eight percent of the complaints pertaining to Internet misuse related to gambling, which in turn accounted for two percent of the overall dismissals.

Young et al. (1999) characterizes Internet addiction as a "broad term covering a wide-variety of behaviors and impulse-control problems", including:

  1. Cybersexual addiction: compulsive use of adult Web sites for cybersex and cyberporn;
  2. Cyberrelationship addiction: over-involvement in online relationships;
  3. Net compulsions: obsessive online gambling, shopping, or day-trading;
  4. Information overload: compulsive Web surfing or database searches; and,
  5. Computer addiction: obsessive computer game-playing.

Employee use of the Internet may facilitate one or more of these addictions; however, this article focuses on workplace gambling. Internet access in the workplace increased 17 percent in the year ending August 2002, with nearly 46 million American office workers now using the Internet (Nielsen//Netratings, 2002). This expansion, coupled with a concomitant rise in employees use of the Internet for non-related purposes, gives rise to another avenue for addictive gambling behavior in the workplace. For example, one survey of workplace Internet use indicated that 15 percent of employees constantly surf non-work-related sites, with another 38 percent surfing such sites a few times a day (Vault, 2000).

The availability of Internet gambling opportunities in the workplace is of concern as heightened opportunities for problem or pathological gamblers to engage in gambling-related behaviors are available. Put differently, because many employees have computers in their own offices, they can engage in Internet gambling and other forms of potentially undesirable Internet-related activities without necessarily "arousing the suspicion of co-workers or supervisors" (Griffiths, 2002).

Employee access to Internet gambling should also be of concern that research has demonstrated that increased availability of opportunities to gamble leads to an increase in both regular and problem gambling among individuals. As Griffiths and Delfabbro (2001) note:

"The more gambling industry infrastructure that is established (e.g., new venues), the larger the range of gambling products (e.g., through the application of new technologies), and the greater the industry's marketing efforts, the more likely people will be to gamble in the first place" [1].

Similarly, Janower observes that:

" ... data [have] shown that after gambling is legalized, communities experience a 100-550 percent increase in the number of addicted gamblers. More people simply become addicted as more people are exposed; according to psychiatrists, this [occurred] because a substantial part of the population has a latent susceptibility to compulsive gambling and different individuals get hooked by different gambling opportunities" [2].

Various studies have examined the prevalence of problem and pathological gambling (see Shaffer, Hall and Vander Bilt, 1999, for a meta-analytic review). One of the most comprehensive of these studies, conducted in 1999 by the National Opinion Research Center (NORC), estimates that 2.5 million North American adults are pathological gamblers and another three million adults are problem gamblers. An additional 15 million adults were viewed as being at risk for problem gambling. The NORC study also notes that "[t]he availability of a casino within 50 miles (versus 50 to 250 miles) is associated with about double the prevalence of problem and pathological gamblers" [3]. This finding points to a relationship between gamblers' proximity to casinos and the prevalence of casino gambling behavior. It also lends credence to the notion that the availability of gambling opportunities is correlated positively with the incidence of problem and pathological gambling behaviors. In terms of our current discussion, one area in which the availability of gambling services has increased is online. The fact that the presence of casinos is not limited to terra firma but instead increasingly take the form of online venues further complicates this problem. According to Informa Media group, online gambling revenues will reach $15.5 billion in 2006, up from $3.81 in 2002 (eMarketer, 2002). Datamonitor (2001) likewise forecasts that U.S. and European revenues from online gambling will increase from $6.7 billion in 2001 to $20.8 billion by 2005. This increase in cyberspace-based gambling opportunities leads one academic to opine:

"In many countries there appears to be a slow shift from gambling being taken out of gambling environments and into the home and the workplace (and in the case of Internet gambling it has gone from being site specific to being in cyberspace)" [4].

This shift in emphasis — from gambling occurring in brick-and-mortar gambling establishments to gambling occurring via the Internet — should be of particular concern in light of the evidence that, in contrast to traditional gambling outlets, those who gamble online may be more likely to be problem gamblers. Ladd and Petry's (2002) study of 389 patients at university health clinics concludes that Internet gamblers were more likely to be level two or level three gamblers, as defined by the commonly used South Oaks Gambling Screen; 22 percent of participants who did not have internet gambling experience were level two or level three gamblers, whereas 74 percent of Internet gamblers were level two or level gamblers. The American Psychiatric Association has recognized the dangers of Internet gambling. On issuing an advisory, the American Psychiatric Association expressed concerns regarding the uncontrolled nature of gambling on the Internet and the attendant lack of regulation, combined with the solitary nature of Internet gambling make for a more hazardous gambling environment. This latter aspect (i.e., the solitary nature of gambling) is of concern as, for most problem gamblers, gambling is a solitary activity. Unfortunately, employee access to computers in the workplace may enable employees to surreptitiously engage in gambling activities in the privacy of their own workspace.

These concerns not withstanding, it is important to note that most employee Internet gambling behavior is not necessarily detrimental — a conclusion borne out by a 1999 survey of over 500 human resource professionals by the Society for Human Resource Management (SHRM). With regard to these individuals' perceptions relating to the impact of gambling on productivity, 56 percent indicated that gambling had no impact on productivity; 13 percent said gambling had a positive impact, 25 percent were unsure, and only six percent reported negative effects.

Still, many commentators have characterized workplace Internet gambling as a form of "cyberslacking", "cyberloafing" or "cyberbludging" (Mills et al., 2001). Mills et al. (2001) report that game playing and gambling are among the most frequently cited "cyberslacking" activities. While terms such as "cyberslacking" indicate of one of the consequences of Internet gambling in the workplace — namely time theft by employees — they do not reflect the often harmful personal consequences of gambling for employees and employers. Attempts have been made to quantify the costs of gambling behavior. For example, the NORC study estimated the total costs associated with both problem and pathological gambling as, respectively, US$5,130 and US$10,550 over the lifetime of the gambler. Aside from the costs associated with poor physical and mental health, those costs associated with job loss are clearly of interest to employers (these were estimated at US$200 per problem gambler and US$320 per pathological gambler during the year preceding the study) [5]. Another cause for alarm, for employers relates to the relationship between gambling problems and employee theft. Widgery (1994), for example, estimates that 40 percent of white collar crime derives from individuals with serious gambling problems (Widgery, 1994). Also, the NORC study found that "[p]athological and problem gamblers are more likely than other gamblers or non-gamblers to have been on welfare, [to have] declared bankruptcy, and to have been arrested or incarcerated" [6].

We now turn our attention to how technology can be used to monitor or control employee Internet gambling activities.



Using technology to monitor or control workplace gambling

Given that workplace Internet gambling is a behavior that technology has facilitated, it is inevitable that some of the "solutions" to this problem are technological in nature. Hence, in order to improve employee productivity, reduce legal liability and to enhance network performance, businesses have resorted to various Employee Internet Monitoring (EIM) solutions. These solutions can be used to limit and/or monitor employee access to Internet gambling sites. Commonly this involves the use of various filtering techniques, such as:

Each of these filtering techniques will be now discussed in more detail.


A firewall is simply a program or hardware device that filters the information coming through the Internet connection into your private network or computer system. If the firewall "flags" incoming data, it is not allowed through the firewall. This is achieved through the implementation of security rules, which enable companies to control how employees connect to Web sites, whether files are allowed to leave the company over the network, and so on. Firewalls are usually located at the gateway to the Internet and they can manage traffic at a single point. Because most firewalls are transparent devices and there are no proxy settings to be changed at the client desktop, filtering at this level is easy to implement. Some firewalls combine dynamic network address translation, proxy server, packet filtration, firewall and VPN capabilities in a single piece of hardware.

Virtual Private Networks (VPNs)

A VPN is a private network that uses a public network (usually the Internet) to connect remote sites or users together. VPNs take two forms: voice-carrying and data-carrying. Instead of using a dedicated, real-world connection such as leased line, a VPN uses "virtual" connections routed through the Internet from the company's private network to the remote site or employee. AAA (authentication, authorization and accounting) servers are used for more secure access in a remote-access VPN environment. When a request to establish a session comes in from a dial-up client, the request is proxied to the AAA server. The AAA then checks: (a) Your identity (authentication); (b) What you are allowed to do (authorization); and, (c) What you actually do (accounting). This last function of accounting is one of the means by which companies can monitor employee Internet usage.

Proxy Servers

Proxy servers make requests to the Internet on behalf of internal clients. They typically provide basic caching and other services. These servers sit inside a firewall, and balance the functions of providing intranet users with easy access to the Internet, while simultaneously seeking to keep a network secure. When someone inside the company wants to contact the Internet to, for example, visit a Web page, they do not actually contact the Internet directly. Instead, they contact a proxy server inside an intranet firewall, and the proxy server contacts the Internet (in this instance, a Web server). The Web server sends the proxy server the page, and the proxy server then sends that page to the requester on the intranet. Proxy servers can log all actions they take so that intranet administrators can check for employee Internet usage. Proxy servers can cache Internet Web pages in their memory to provide quicker response and faster viewing of Web pages and other Internet resources. The content is also filtered in the caches as well. By implementing filtering at the proxy server, it is possible to off-load the firewall so that it can focus primarily on security functions.

Cache servers

Cache servers, or specialized computers, are used to temporarily store the Web pages a typical user is likely to want. The content is filtered in the caches. By implementing filtering at the cache server, it is possible to off-load the firewall so that it can focus primarily on security functions.

Employee Internet Monitoring (EIM) software

EIM software is based on filtering technology that requires all requests for Web pages to pass through an Internet control point such as a firewall, proxy server or a caching device. The software is integrated with these control points and checks each request to immediately determine whether it should be allowed or denied. All responses are logged for reporting purposes. The software filters Internet content by working in conjunction with a master database of more than 3.9 million sites, organized into more than 80 categories, including topics such as: gambling, adult content, and shopping. The network administrator can choose to block, permit, limit by time-based quota or postpone access to individual categories by user, group, workstation or network.

In addition to technological solutions to problematic employee Internet gambling, many companies seek to address this problem through their human resources policies.



Human resources implications of Internet gambling

Gambling on the Internet while at work brings about concerns for management and the human resource function of the organization. These concerns are likely to be two-fold. First, Internet gambling may be a violation of the employer's policy statements with respect to use of employer supplied computer equipment, electronic communication systems and access to the Internet. Second, Internet gambling, if conducted on company time, decreases the amount of time the employee actually spends working, thus potentially decreasing productivity.

Employers who provide computer equipment, electronic communication systems and Internet access for employee work processes should have policy statements that clearly indicate employee responsibilities with respect to their use. Many companies have one policy dealing with the use of computer and communications equipment and a separate one dealing with Internet usage. Other firms combine the two. A sample policy statement is contained below and has been adapted from several policy statements accessed through the Society for Human Resource Management sample policy Web pages (SHRM). The policy is truncated in terms of dealing specifically with the issue of online gambling. Any actual policy should be expanded considerably to deal with the issue of e-mail and with off-line uses of computer equipment.

Electronic Equipment and Internet Access Policy

The company provides and maintains computer systems, electronic communication systems, and Internet access. As a condition of providing these systems, the company places certain restrictions on their usage.

All systems, equipment and data remain at all times the property of the company. Accordingly, all messages and files created, sent, received or stored within such systems must be related to company business and will remain the property of the company. The company reserves the right to retrieve and review any message or file composed, sent, received or stored.

The use of computer systems, electronic communication systems and Internet access is restricted to the conduct of company business. Communication systems and Internet access use is restricted to the following:

Computer systems, electronic communications systems, and Internet access are not to be used for the following:

Violations of this policy may result in discipline up to and including termination.

Managerial actions associated with either the violation of a policy statement regarding online gambling or with performance deficiencies resulting from online gambling activity are essentially the same. Most employers will proceed with progressive discipline. "Progressive discipline means that the severity of the sanction increases with the severity and repeated nature of the offense" [7]. Normally, progressive discipline begins with an oral warning that the behavior or lack of performance is unacceptable and should not continue. Should the employee repeat the undesired behavior or not improve performance, subsequent levels of discipline are imposed progressing from a written reprimand to an unpaid suspension from duty and, finally, to termination.

Some employers have found that positive discipline rather than progressive discipline is more effective with the modern workforce. As Mathis and Jackson [8] observe, "[t]he positive discipline approach builds on the philosophy that violations are actions that can be constructively corrected without penalty." Positive discipline is a mutual problem solving approach in which the supervisor and employee try to reach agreement on how to resolve the issue. It involves several steps just as progressive discipline does. The first step is usually a meeting with the supervisor in which the offending conduct or lack of performance is discussed and an oral agreement is reached as to how to resolve the issue. Should there be a reoccurrence, the second step is a written agreement signed by both parties as to how the issue is going to be resolved. If the performance does not improve or the offending conduct cease, the third step is a final warning often accompanied by a paid "decision day off" during which the employee is required to develop a written action plan to resolve the issue. If the issue reemerges, the final step is termination.

Management and HR can anticipate that some employees will try to defend their actions in one of several ways. The employee may argue that monitoring of Internet usage is unreasonable search and seizure in violation of the Fourth Amendment. However, the protection applies only to governmental action and does not apply to private employers (Phillips and Naffziger, 2002). Another argument that the employee may raise is that privacy is guaranteed under the Electronic Communications Privacy Act of 1986, which, in general, prohibits the interception and disclosure of verbal and electronic communications. However, the act allows organizations who maintain electronic systems for the normal conduct of their business to intercept any communications on their systems (Naffziger and Phillips, 2002).

Finally employees may argue that online gambling is an addiction protected under the Americans with Disabilities Act of 1990 and that accommodation, not discipline is required. While there is general agreement that gambling can be addictive, the defense will not work as compulsive gambling is specifically exempted from the definition of disability (EEOC). However, if the employer has an Employee Assistance Plan (EAP), management should identify the availability of assistance through such a program to the employee.




The Internet has made many positive contributions to our working lives. However, detrimental consequences can occur for workers who have access to the Internet. These consequences include "cyberslacking" and, in some cases, addictive behaviors. As this paper has demonstrated, employee access to Internet gambling opportunities is a growing area of concern. However, in the interests of worker welfare and organizational productivity, companies can ameliorate the negative consequences associated with Internet gambling. Technology inevitably can play a key role in this task, as can the development of effective human resources policies. End of article


About the Authors

Mark Fox is Associate Professor of Management & Entrepreneurship in the School of Business & Economics at Indiana University South Bend.

Larry Phillips is Visiting Assistant Professor of Management in the School of Business & Economics at Indiana University South Bend.

Ganesan Vaidyanathan is Assistant Professor of Decision Sciences in the School of Business & Economics at Indiana University South Bend.



1. Griffiths and Delfabbro, 2001, p. 4.

2. Janower, 1996, p. 3.

3. NORC, 1999, p. ix.

4. Griffiths, 2002, pp. 148-149.

5. NORC, 1999, p. 52.

6. Ibid., p. ix.

7. Anthony, Kacmar, and Perrewe, 2002, p. 566.

8. Mathis and Jackson, 2003, p. 534.



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Editorial history

Paper received 15 February 2003; accepted 24 March 2003.

Contents Index

Copyright ©2003, First Monday

Copyright ©2003, Mark Fox

Copyright ©2003, Larry Phillips

Copyright ©2003, Ganesh Vaidyanathan

Managing Internet gambling in the workplace by Mark Fox, Larry Phillips and Ganesh Vaidyanathan
First Monday, volume 8, number 4 (April 2003),