Sports gambling indictment revives tough questions about integrity

Driving the news: Prosecutors Thursday announced two indictments involving NBA figures and more than 30 individuals.

• In the sports betting case, Miami Heat player Terry Rozier was arrested and accused of leaking confidential information about his health to associates who used that information to bet he would underperform. A Rozier rep told investigative journalist Pablo Torre that the player is "not a gambler, but he is not afraid of a fight, and he looks forward to winning this fight."
• In a separate poker case involving "rigged" private games and alleged mafia figures, Portland Trail Blazers head coach and NBA Hall of Famer Chauncey Billups was arrested and charged with participating in the scheme. A Billups rep was not immediately available for comment.

This sports betting scandal also involved former NBA bench player Jontay Porter, who was similarly accused of disclosing confidential information about his health to a bettor and then limiting his participation in a game.

• Porter pleaded guilty to wire fraud in connection with the scandal.
• It's "one of the most brazen sports corruption schemes since online sports betting became widely legalized in the United States," Brooklyn U.S. attorney Joseph Nocella Jr. said Thursday at a news conference.

The big picture: For decades, the major sports leagues spurned betting, in part because of fears it would invite questions about the integrity of the game.

• But since the Supreme Court overturned the effective federal ban on sports betting in 2018, the major sports have embraced it, creating a windfall for leagues, players, media, sportsbooks and state governments.
• Americans legally bet about $150 billion on sports in 2024, driving a 24.8% increase in revenue for the industry compared with a year earlier, according to the American Gaming Association.
• Sports betting is now legal in some fashion in 38 states, plus Washington, D.C. and Puerto Rico, according to the Legal Sports Report.

Zoom out: The episode is renewing scrutiny over "prop" bets that allow gamblers to wager that players will, for example, score more or fewer than a certain number of points in a game.

• Those bets are easy for a player to rig — don't take a shot and you won't score a point.
• "It feels like there's a moment here for some change in how props are handled," gambling industry consultant Dustin Gouker of The Closing Line tells Axios. But it's "hard to just say we're going to turn that off, or just have overs, which I don't think really solves anything."

• The NBA, which prosecutors said cooperated with the investigation, said in a statement that it is "reviewing" the indictments and that both Rozier and Billups had been placed on immediate leave. "We take these allegations with the utmost seriousness, and the integrity of our game remains our top priority," the league said in a statement.

Zoom in: The case will also bring additional scrutiny to the regulated sportsbooks, such as industry leaders DraftKings and FanDuel.

• But prosecutors noted that sportsbooks lost money because of the scandal.
• "The sportsbooks themselves are victims in this case," Nocella said. "They did not perpetrate anything unlawful."
• "Today's revelations are a stark reminder of the pervasive and predatory illegal market, ensnaring countless individuals and operating in the shadows," Bill Miller, CEO of the American Gaming Association, said in a statement. "It is important to recognize that the regulated legal market delivers transparency, oversight, and collaboration with authorities that assists in bringing these bad actors to light."

What to watch: State policymakers are weighing a crackdown.

• In sports gambling hotbed New Jersey, for example, state lawmaker Dan Hutchison introduced a bill earlier this year that would ban "microbets" — that is, live wagers on individual plays.
• "We're likely to see more calls for regulation in this space," gaming law expert Stephen Piepgrass, partner at law firm Troutman Pepper Locke, told Axios.