NEW YORK – It wasn’t the publicity that the NBA wanted during the first week of the season.
FBI director Kash Patel announced on Thursday dozens of arrests across 11 states in a sprawling federal probe into alleged gambling rings involving NBA coach Chauncey Billups, player Terry Rozier and New York organized crime families.
The drama is an unwelcome distraction for a league that just entered the first year of an 11-year, US$77-billion media rights deal. The most damning part is allegations of games being manipulated in what Patel called the NBA’s “insider trading saga.”
“This is definitely one that’s going to break the trust of a lot of fans, and it comes at a very challenging time because the season is brand new,” said Matthew Bakowicz, a former sportsbook operator who is now director of the sports business management program at American University’s Kogod School of Business.
“It’s going to be a turning point for the NBA.”
The league has placed Billups and Rozier on leave and said it is cooperating with investigators.
Prosecutors alleged that in 2023 Rozier, then playing for the Charlotte Hornets, tipped off co-conspirators that he planned to leave a game early. He did and allegedly collected US$100,000 for the tip as he underperformed in stats such as points and assists.
Billups was implicated in an underground poker ring that allegedly cheated players. The coach of the Portland Trail Blazers was also pointed to as allegedly giving non-public information on the team to a co-conspirator.
The case presents a thorny problem for NBA commissioner Adam Silver, who, more than a decade ago, led the way among US sports leagues in advocating for the widespread legalization of sports betting.
In 2014, less than a year into his tenure as commissioner, he wrote an op-ed in the New York Times arguing that bringing betting out of the shadows would make it easier to monitor. It was a stark departure for the NBA, which, along with other US leagues, had long opposed legal gambling.
Four years later, the Supreme Court struck down the federal prohibition on sports betting. But instead of a new federal framework, as Silver had suggested, the industry has grown through a patchwork of state laws, with more than 30 states now allowing online sports betting.
It’s been a financial boon for the NBA, which pulls in hundreds of millions per year through data and sponsorship deals with betting companies, but the reputational costs are mounting. In an Ipsos poll from 2023, 37 per cent of fans said that betting lessens the integrity of games across sports.
The first rumblings of trouble came last year when the NBA banned Jontay Porter of the Toronto Raptors, after discovering he’d twice conspired to deflate his own statistics by pulling himself from games early. Porter, who was part of the same federal investigation that has now ensnared Rozier, pleaded guilty to conspiracy charges last summer.
As in the Porter case, the allegations against Rozier revolve around so-called proposition, or prop, bets on an individual player’s performance. In July, Major League Baseball placed two Cleveland Guardians pitchers on leave in another gambling investigation that also appears to involve props.
In the wake of the Porter case, the NBA persuaded DraftKings, FanDuel and other major US sportsbooks to stop offering “under” prop bets on the league’s lowest-paid players, such as Porter, who was making about US$400,000 a year when he was suspended.
That intervention, however, wouldn’t have helped to stop the alleged bets against Rozier, who was paid US$21 million during the 2022-23 season and is now in the final year of a four-year, US$96 million deal.
Last year, as the 10th anniversary of his op-ed approached, Silver told the Associated Press that he had no regrets about writing it. Once sports betting went online, he said, it was bound to spread.
“We had to deal directly with technology and recognize that if we don’t legalize sports betting, people are going to find ways to do it illegally,” Silver said.
As damaging as they are for the league, the Porter and Rozier cases also bolster Silver’s argument that legal betting is easier to track. In both instances, the suspicious betting happened on regulated sportsbooks and was flagged by monitoring services.
Yet Silver and the NBA have little control over how states and sportsbooks set the rules. Earlier this week, before federal agents made arrests in the gambling probe, Silver told ESPN’s Pat McAfee that the league is working with sportsbooks to put in “some additional control” to prevent manipulation. He also reiterated his desire for Congress to step in and bring nationwide standards to the industry.
If he cannot convince federal lawmakers to intervene, which seems unlikely at the moment, Silver has few options to slow the drip of scandal and shore up the trust of fans.
The NBA already prohibits players from betting on or manipulating games. The consequences for breaking them, as Porter’s banishment made clear, are severe.
Yet if the allegations against Rozier are true and a player who is making tens of millions per year is willing to risk his career for a US$100,000 payout, the league’s gambling troubles aren’t likely to go away. BLOOMBERG