The Iowa Gambling Task (IGT) involves exploratory learning via rewards and penalties, where most advantageous task performance requires subjects to forego potential large immediate rewards for small longer-term rewards to avoid larger punishments. Pathological gambling (PG) subjects perform worse on the IGT compared to controls, relating to their persistence at high risk decisions involving the continued choice of potential large immediate rewards despite experiencing larger punishments. We wished to determine if neural processing of risk and reward within striatal and frontal cortex is associated with this behaviour observed in PG. Functional magnetic resonance imaging (fMRI) was used to assess brain activity in response to a computerized version of the IGT. Thirteen male PG subjects with no active comorbidities were compared to 13 demographically matched control subjects. In agreement with previous behavioural studies, PG subjects performed worse on the IGT and made more high-risk choices compared to controls, particularly after experiencing wins and losses. During high-risk gambling decisions, fMRI demonstrated that PG subjects exhibited relatively increased frontal lobe and basal ganglia activation, particularly involving the orbitofrontal cortex (OFC), caudate and amygdala. Increased activation of regions encompassing the extended reward pathway in PG subjects during high risk choices suggests that the persistence of PG may be due to the increased salience of immediate and greater potential monetary rewards relative to lower monetary rewards or potential future losses. Whether this over activation of the reward pathway is associated with the development of PG warrants further investigation.