NBA and FanDuel online sports betting signs are displayed on the side of a building in Phoenix, Arizona, June 5, 2024.
Patrick T. Fallon | AFP | Getty Images
“This is the saga of insider trading for the NBA.”
That was the message from FBI Director Kash Patel during a news conference Thursday announcing the arrests of Portland Trailblazers coach Chauncey Billups and Miami Heat player Terry Rozier.
The two men were among about 30 people charged in an illegal poker ring involving organized crime and cheating, according to prosecutors. The U.S. Attorney, the FBI and other law enforcement agencies also accuse Rozier and former Cleveland Cavaliers player and assistant coach Damon Jones of a sports betting scheme aimed at fixing games or making illegal bets on inside information.
This is the kind of news that could prove detrimental to the legal gambling industry – or, perhaps, a real opportunity.
Legally licensed sports betting in the United States has seen massive growth in recent years, but it is still trying to expand. Market leaders FanDuel, DraftKings, PariMGM And Caesars do not have access to the two most populous states, California and Texas, because they have not legalized sports gambling.
As state lawmakers debate the pros and cons of legalizing sports betting, questions persist about the integrity of the sport and the possibilities for cheating. Players arrested on federal charges, accused of gambling manipulation and profiting from illegal activities provide strong evidence for a sermon against the dangers of gambling.
The commercial gaming industry knows this. And he takes the opportunity to reiterate his protections.
“Today’s events are deeply disturbing and should concern fans, athletes and everyone who loves sports and values integrity and fair play,” said FanDuel, owned by Beatsaid in a statement to CNBC shortly after federal prosecutors and law enforcement concluded their news conference.
“We are unwavering in our commitment to rooting out abuses by those who seek to undermine fair competition and the games we love,” FanDuel said.
The American Gaming Association released its statement: “Today’s revelations are a stark reminder of the pervasive and predatory illegal market that traps countless individuals and operates in the shadows… It is important to recognize that the regulated legal market provides transparency, oversight, and collaboration with authorities that help expose these bad actors.”
A DraftKings The spokesperson told CNBC: “We fundamentally believe that regulated online sports betting is the best path forward to monitor and detect suspicious behavior.”
Sportsbooks and the integrity monitoring companies that work with them were involved in alerting authorities to unusually large bets on Jontay Porter’s prop bets, leading to Porter being banned for life from the NBA last year and convicted on federal charges.
Prosecutors say Porter’s activity was part of the same conspiracy network operating between 2022 and 2024 that resulted in six arrests this week.
A rapid response from sportsbooks with carefully crafted crisis communications messages could be designed to ward off threats from national gaming regulators to crack down on player props, which are often the basis of parlay betting.
Parlays, which combine several betting criteria into a single bet, are very profitable for sports betting and popular with customers, even if the chances of winning are lower.
Negative headlines about illegal gaming could ultimately prove to be a long-term opportunity for commercial and tribal casinos if they prompt more enforcement action against unlicensed operators.
After all, unlicensed gambling in the United States is estimated to bring in $674 billion in wagering annually, the AGA said in August.