NBA gambling scheme puts sportsbooks on defense

“This is the NBA insider trading saga.”

That was FBI Director Kash Patel’s message at a news conference Thursday, announcing the arrests of Portland Trail Blazers coach Chauncey Billups and Miami Heat player Terry Rozier.

The two were among more than 30 people charged in an illegal poker ring that involved organized crime and cheating, according to prosecutors. The U.S. Attorney, the FBI and other law enforcement agencies also charged Rozier as well as former Cleveland Cavaliers player and assistant coach Damon Jones with a sports betting scheme for throwing games or making illegal bets on inside information.

It’s news that could be damaging to the legal gambling industry – or perhaps a real opportunity.

Legally licensed sportsbooks in the United States have enjoyed tremendous growth in recent years, but are still trying to expand. Market Leaders FanDuel, Kings Project, BetMGM and Caesar They can’t reach the two most populous states, California and Texas, because they haven’t legalized sports gambling.

As state lawmakers debate the pros and cons of legalizing sports betting, there are persistent questions about sports integrity and opportunities for cheating. Players arrested on federal charges, accused of rigging the game and profiting from illegal activity, provide strong evidence for a tirade against the dangers of gambling.

The commercial gambling industry knows this. It takes the opportunity to reiterate the protections it provides.

“Today’s events are deeply disturbing, and should concern fans, athletes, and everyone who loves sports and values ​​integrity and fair play,” the FanDuel-owned company said. flutterhe said in a statement to CNBC shortly after federal prosecutors and law enforcement concluded their news conference.

“We are unwavering in our commitment to eliminating abuses committed by those who seek to undermine fair competition and the games we love,” FanDuel said.

The American Gaming Association criticized its statement, saying: “Today’s revelations are a stark reminder of the pervasive and predatory illegal market, which traps countless individuals and operates in the shadows… It is important to recognize that a regulated, legal market provides transparency, oversight, and cooperation with authorities that helps shine a light on these bad actors.”

A Kings Project “We fundamentally believe that regulated online sports betting is the best way forward to monitor and detect suspicious behavior,” the spokesperson told CNBC.

Sportsbooks and the integrity monitoring companies that work with them were involved in alerting authorities to unusually large bets on Jontay Porter’s bets that led to Porter’s lifetime ban from the NBA last year and his indictment on federal charges.

Prosecutors say Porter’s activity was part of the same conspiracy ring operating between 2022 and 2024 that resulted in six people being arrested this week.

A rapid response from sportsbooks can be designed through carefully crafted crisis communications messages to ward off threats from state gaming regulators to crack down on player props, which are often the basis of investment bets.

Parlays, which combine several betting parameters into one bet, are very profitable for sports betting and are popular with customers, although the chances of winning are lower.

Negative headlines about illegal gambling could ultimately be a long-term opportunity for commercial and tribal casinos if they lead to more enforcement actions against unlicensed operators.

After all, unlicensed gambling in the United States is estimated to bring in $674 billion in bets annually, the AGA reported in August.