July 2 (Bloomberg) -- Howard Shaffer is a researcher at Harvard University, whose $34.9 billion endowment makes it the world's richest school. His work on gambling addiction is funded instead by dimes and nickels fed into slot machines.

Shaffer and the institute he heads have received $9.1 million in industry money since 1996. The funding is part of a practice of corporate support at Harvard under fire from critics who say industry backing clouds the legitimacy of research.

Casino money has funded studies by Shaffer showing that fewer than 2 percent of Americans are pathological gamblers. Critics say Shaffer wins corporate support because his research shows that gambling addiction is rooted in brain chemistry and not casino practices, helping the industry, led by Harrah's Entertainment Inc., expand into new markets.

``The casinos love the biological research because it points to the gambler as the source of the problem, rather than pointing to things like casino policy,'' Henry Lesieur, a psychologist who treats gambling addicts at Rhode Island Hospital in Providence, said in a phone interview on June 16.

Three Harvard Medical School psychiatrists were accused on June 4 of ethical violations by Senator Charles Grassley, the Iowa Republican, for failing to disclose they received $3.2 million from drugmakers for consulting and speaking.

Close ties like this with industry can lead to a bias called ``the funding effect'', said Merrill Goozner, director of the Integrity in Science Project of the Center for Science in the Public Interest, a Washington-based advocacy group, in a June 19 phone interview. ``You don't bite the hand that feeds you.

Pressure on Professors

There also is pressure on professors to garner corporate sponsors because universities evaluate academics by how much outside research money they bring in, Goozner said.

Harvard Medical School and Massachusetts General Hospital, both based in Boston, said they are investigating the disclosure procedures by the research physicians linked to drugmakers. The hospital and its corporate parent, Partners HealthCare, said they have convened a commission to re-examine policies.

Shaffer's research complies with Harvard's guidelines for receiving funding from industry, David Cameron, a spokesman for Harvard Medical School, said in an emailed statement June 25.

Shaffer, 59, said his funding sources are fully disclosed, his findings are published in peer-reviewed journals and casino companies haven't interfered with his research. A 1999 Shaffer study funded by an industry-backed organization found that casino employees have a higher rate of pathological gambling addictions as well as more smoking, alcohol and depression, than the general adult population, evidence he says that his work is unbiased.

Fully Disclosed

``Good science is good science,'' Shaffer, an associate professor of psychology in Harvard's Department of Psychiatry and the director of the Division on Addictions, a program of Harvard Medical School and the Cambridge Health Alliance, based in Medford, Massachusetts, said in a June 17 telephone interview.

``It is possible to do very good research independent of the funding,'' he said in the interview. ``It is also possible to be swayed by funding. My job is to have integrity and I think we have it.''

Shaffer's research is used by supporters of casino expansion to argue that an increase in gambling establishments doesn't result in widespread addiction, said Tom Grey, a minister in Spokane, Washington, who is the spokesman for the National Coalition Against Legalized Gambling, a Washington- based advocacy group.

Massachusetts Casinos

Since 1996, U.S. states with casinos have doubled to 20 and revenue has climbed from $17.8 billion to $37.5 billion in 2007, reports the American Gaming Association, a Washington trade group.

In one example, Massachusetts Governor Deval Patrick, a Democrat, cited Shaffer's research on March 19 in testimony before the state's legislature. Patrick was supporting a bill that would open the state to casinos to capture a portion of the estimated $900 million its residents wager across the border in Connecticut where there are two American Indian casinos.

Shaffer, who didn't testify, said proponents and opponents of casinos cite his statistics, albeit selectively.

While Shaffer conducts studies, his most important role has been facilitating research into gambling and physical addictions, and synthesizing the results, said Linda Cottler, a professor of epidemiology in psychiatry at Washington University School of Medicine in St. Louis.

``The Guru''

``Howard is the guru of pathological gambling research,'' Cottler said. ``He has brought the field together.''

In 2004 Shaffer developed the ``syndrome model,'' showing that addictions to chemical substances such as alcohol, and to behaviors, including excessive gambling, are a result of similar biological, psychological and environmental causes.

Shaffer has also found that while the introduction of casinos to a community increases the likelihood of gambling addiction, it lessens over time as residents adapt to its presence.

``Exposure does not necessarily provide a direct path to addiction or even gambling related problems,'' he wrote with co- author Debi LaPlante in the October, 2007 issue of the American Journal of Orthopsychiatry.

$22 Million

Shaffer's Institute for Research on Pathological Gambling and Related Disorders at Harvard was created in 2000 with funding from the Washington-based National Center for Responsible Gaming, which in turn, was created in 1996 by the American Gaming Association. The center has received commitments for more than $22 million from casino companies and slot-machine makers, led by Las Vegas-based Boyd Gaming Corp. and Harrah's, the world's largest casino company.

National Center for Responsible Gaming provides the Harvard institute with its annual budget of $1.1 million, 40 percent of which is given out in grants to outside researchers. The institute will receive the funding through at least 2012, according to Shaffer. Last year the NCRG gave Shaffer its National Scientific Achievement Award.

``They've gotten Harvard for cheap,'' said Grey of the National Coalition Against Legalized Gambling. ``They've used him to keep the government from looking at gambling.''

The casino industry deserves credit for acknowledging that some gamblers are addicts and for funding research when other sources weren't available, said Kevin Mullally, an NCRG board member and the general counsel for Las Vegas-based Gaming Laboratories International Inc., which tests gambling equipment for regulators.

``If there are other sectors of the economy that want to participate in this funding, great, but I don't see a lot of other sectors contributing,'' Mullally said in a June 26 phone interview.

To contact the reporter on this story: Oliver Staley in New York at ostaley@bloomberg.net.

Last Updated: July 2, 2008 00:01 EDT