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‘Brazen Sports Corruption’: NBA Indictments Raise Questions for Online Betting, Prediction Markets

Oct 23, 2025 09:47:00 -0400 by Nick Devor | #News

The U.S. attorney for the Eastern District of New York, Joseph Nocella, Jr., called an alleged gambling ring “one of the most brazen sports corruption schemes since online sports betting became widely legalized in the United States.” (Photograph by Ronald Martinez/Getty Images)

Key Points

An explosive indictment of six individuals including an active NBA player and a former assistant coach who allegedly placed illegal bets based on insider information rocked the sports world and gambling industry on Thursday.

The indicted individuals and alleged co-conspirators—some were named in a separate indictment claiming they were involved in an underground poker ring prosecutors say included members of the Sicilian Mafia and Portland Trail Blazers head coach Chauncey Billups—are accused of coordinating with a network of bettors to place wagers that netted them hundreds of thousands of dollars in fraudulent winnings. That money was then laundered through wire transfers and cash handoffs, according to the indictment.

At a press conference announcing the indictments, the U.S. attorney for the Eastern District of New York, Joseph Nocella, Jr., called it “one of the most brazen sports corruption schemes since online sports betting became widely legalized in the United States.” FBI director Kash Patel dubbed it “the insider trading saga for the NBA.”

In one instance, Miami Heat player Terry Rozier allegedly told co-conspirators that he would be leaving a game early, and the gambling ring bet that he wouldn’t score a certain amount of points. “Rozier exited the game after just nine minutes and those bets paid out, generating tens of thousands of dollars in profit,” New York Police Commissioner Jessica Tisch said during the press conference. “The proceeds were later delivered to his home, where the group counted their cash.”

Rozier’s lawyer, Jim Trusty, told The Wall Street Journal that his client is not a gambler and will fight the charges. Billups has been arrested and could not be reached for comment.

The allegations came just a day after NBA Commissioner Adam Silver appeared on ESPN to advocate for stronger gambling regulation, adding that the NBA has asked its sportsbook partners “to pull back on some of the prop bets,” the kinds of wagers made on an individual players’ actions. “It’s too easy to manipulate something which seems otherwise small and inconsequential to the overall score,” Silver said on the Pat McAfee Show.

The NBA said in a statement that Rozier and Billups have been “placed on immediate leave from their teams, and we will continue to cooperate with the relevant authorities. We take these allegations with the utmost seriousness and the integrity of our game remains our top priority.”

The scandal is no help for the NBA or its sports-betting partners.

“Even before sports betting, I think we’re inclined to see sports as rigged or corrupt,” says Jonathan Cohen, author of the book Losing Big: America’s Reckless Bet on Sports Gambling. “There’s always someone who’s like, ‘Oh these refs must be on the take from FanDuel.’” As gambling gets more high-profile, the attendant scandals have even more salience, Cohen says, which leads more people to view sports as irrevocably corrupt.

Plus, normalization of sports gambling may be normalizing it for players themselves. “They probably wouldn’t think to bet on their performance if there wasn’t a FanDuel ad shoved down their throats every time they turn on the NBA,” Cohen says.

“Today’s events are deeply disturbing, and should concern fans, athletes, and everyone who loves sports and values integrity and fair play,” a FanDuel spokesperson said in a statement that highlighted the sportsbook’s monitoring tools that identify suspicious activity, which the company refers to law enforcement. “We fundamentally believe that regulated online sports betting is the best way forward to monitor for and detect suspicious behavior,” a DraftKings spokesperson said.

Nocella declined to name the specific sportsbooks that were used to place the alleged illegal bets and said that “the sportsbooks themselves are victims in this case. As far as our investigation has concluded they did not perpetrate anything unlawful.”

Shares of DraftKings and Flutter , FanDuel’s parent company, were up slightly.

“The sportsbooks are not liable here—they were watchdogs,” says Daniel Wallach, a gambling law expert known online as “The Sports Betting Attorney.” Wallach believes the indictments were made possible by tools for detecting and reporting suspicious betting that are built into betting platforms. Those tools are mandated by state regulatory agencies. “This is state regulation working,” he says.

“Today’s revelations are a stark reminder of the pervasive and predatory illegal market, ensnaring countless individuals and operating in the shadows,” Bill Miller, the president and CEO of the American Gaming Association, said in a statement.

The indictment, however, notes that two of the four betting platforms used in the alleged fraudulent-betting scheme are “co-official sports betting partners of the NBA.” DraftKings and FanDuel are the NBA’s only co-official sports betting partners.

“There have been cracks in the facade of what sportsbooks have tried to propagate, which is that by bringing sports betting into the light by bringing it into regulation, it will not threaten the integrity of professional sports,” says Cohen. “This kind of thing shows that as much light as you want is not going to keep the threat of corruption away.”

The allegations are also putting the focus on prediction-market operators Kalshi and Polymarket, as well as their regulator. The two firms have been a disruptive force in the sports-betting landscape this year.

Prediction markets offer so-called event contracts around yes/no questions like “will Terry Rozier score more than 10 points tonight?” These contracts are technically options, which brings them under the regulation of the Commodity Futures Trading Commission and makes the contracts legal nationwide—even in states that haven’t legalized sports gambling. That puts them in direct competition with sports betting pure-plays like DraftKings and FanDuel.

Wallach contrasts the level of regulation and mandatory monitoring and reporting requirements in individual states that sportsbooks must abide by with what he calls the “laissez-faire” approach of the CFTC. The regulator hasn’t definitively weighed in on whether sports event contracts should be allowed, but they haven’t outright stopped Kalshi and other prediction markets in the U.S. from offering them either.

“It’s a thin veneer of regulation,” Wallach says. “There are no sports-related integrity protections under the CFTC framework.”

“Kalshi has state-of-the-art surveillance and compliance infrastructure, including suspicious trading detections,” a company spokesperson said. “It is a ridiculous and libelous claim to assert that just because Kalshi is not subject to the jurisdiction of state slot machine regulators, we do not have integrity provisions in place to monitor trading. Furthermore, it is clear that insinuation to the contrary is a malicious lie from parties attempting to defend their profits from Kalshi’s disruptive business model.”

The Kalshi spokesperson added that the CFTC has a robust regulatory regime that has been protecting consumers for decades.

Wallach doesn’t think that experience translates to monitoring trading around NBA games. “The CFTC regulates commodities. Their focus is on price manipulation, not match-fixing,” he says. “Sporting events are not corn.”

And according to a letter the regulator’s executive director sent to the White House Office of Management and Budget, all but 31 of the CFTC’s 543 employees have been furloughed due to the government shutdown.

Write to Nick Devor at nicholas.devor@barrons.com and Nate Wolf at nate.wolf@barrons.com