The ex-Scotland forward made his claim 24 hours after Rangers midfielder Ian Black was accused of breaking strict Scottish Football Association rules by betting on 160 matches between March 2006 and July this year.
In three instances, the former Inverness and Hearts man is alleged to have put money on the club he was registered with at the time losing.
But McGarvey - a self-admitted gambling addict who had to turn to joinery after frittering away his savings once he had hung up his boots - claims Black is far from the only player to enjoy a flutter.
The 57-year-old told Press Association Sport: "If you stop players from gambling there will be no bookies left - they will go out of business.
"It's not just a few players who bet - it's about half.
"They like to put a line on every Saturday - but so does everyone. It's part of the culture in Britain, not just football. Everyone enjoys a bet. It doesn't matter if you are a player, a lawyer or a labourer. I don't see anything wrong with that."
Meanwhile, former Rangers striker Kevin Kyle - another who has battled a gambling addiction - claims "hundreds" of Scottish players breach betting rules each week.
Kyle, who was released by the Ibrox club earlier this year, told BBC Radio Scotland: "It's everywhere in football, from the juniors up to the top level.
"You've got 42 senior teams in Scotland and you are looking at on average six or seven players per team [gambling on football]. That's nearly 300 odd players before you get to the junior level.
"Footballers think they have an advantage and, at the end of the day, they are just trying to make a few extra pounds by betting on a football coupon on Saturday.
"Some people do it for just a bit of fun and others do it because they have a problem, they can't help it.
"From my own experiences, I realise it's the wrong thing to do. It's a huge problem in the game and something that needs to be looked at.
"We all know we shouldn't do it but it's very easy for me to ask a friend to go and put a bet on for me. That bet can be put on by a third party with the money coming back to me and the betting company doesn't know."
Black has been charged with breaching SFA Disciplinary Rule 22, which prohibits players from betting "in any way on a football match" - no matter where it takes place.
If found guilty, he faces a maximum £1million fine or even a life-time ban.
But McGarvey - capped seven times for Scotland - claims the rules are too severe.
"What does a player in Scotland know about Barcelona?" he asked. "It's ridiculous."
The SFA says it has no evidence to suggest Black has broken Disciplinary Rule 23, which relates to match fixing.
But former Liverpool and St Mirren frontman McGarvey claims any player betting on his own side to lose faces being shunned by his team-mates.
He said: "Putting a coupon on is one thing. But betting against your own team is something else. It's not on. How can you give 100 per cent for your side if you have got money riding on them losing?
"It wouldn't happen in my day. If you did, you would be betraying your team-mates.
"A lot of the time you are playing for bonuses, so why would you bet against your own side?"
McGarvey was forced to turn to Gamblers Anonymous as his addiction left his life in ruins.
And he fears Black - who reports claim was reported to the SFA by bookmakers Ladbrokes - may be struggling with his own demons.
He said: "Gambling can get a hold of you. It gets to a point where you don't care what you're betting on and you end up putting yourself under pressure.
"But I don't think Ian is a bad guy. Maybe the gambling has just got hold of him and he's done a stupid thing. If it's true, he will regret it. It will be hard for his team-mates to forgive him.
"He will be in a bad state right now and I feel sorry for him.
"I read that the bookies have reported him and that's what I find most distasteful. They are happy to take your money but when you start winning, they go screaming to the authorities. It's very pot and kettle."
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