Last month’s shocking announcement from federal investigators that several NBA figures were allegedly tied to trading insider information about games shook the sports world. And it’s likely the dust has yet to settle on the fallout.
It’s a scandal that has highlighted the connections between sports betting and major sports leagues. And for some local experts, it’s also strengthened their conviction that more needs to be done to regulate the industry.
Two investigations, one scandal
Although they’ve been lumped together, the scandal encompasses two separate federal investigations.
One was a look into multiple NBA personnel allegedly tipping off bettors about insider information regarding player availability.
This is what former Celtic Terry Rozier is alleged to have done when investigators say he told a friend that he was planning to remove himself from a game in 2023.
Bettors then placed money on Rozier’s “prop unders,” essentially betting that he wouldn’t perform well — which he didn’t, leaving the game just after 10 minutes. Rozier is alleged to have profited from the scheme.
Rozier’s representation has maintained his innocence.
In the second investigation, Damon Jones, a former NBA player who used to work for the Los Angeles Lakers, is alleged to have given away information about player availability to bettors before it was public. And another co-defendant — who was unnamed but whose description matches the description of former Celtic and Portland Trail Blazers head coach Chauncey Billups — is alleged to have done the same. The league placed Billups on leave from his post in Portland.
Additionally, both Billups and Jones were alleged to have been part of a scheme that used their celebrity to lure people into rigged poker games supported by the Mafia. Billups’ attorney said in a statement that the Trail Blazers coach “has never and would never gamble on basketball games.”
In all, it’s a huge black eye on the world’s best basketball league.
“And look, let’s not mince words, this is the insider trading saga for the NBA, that’s what this is,” said FBI director Kash Patel.
How sportsbooks are involved
Federal investigators said they consider sportsbooks like DraftKings, which is based in Boston, to be victims in this case since bets were made with fraudulent information.
In a statement, DraftKings, which is a partner of the NBA, said that game integrity and responsibility are priorities for the company.
“We fundamentally believe that regulated online sports betting is the best way forward to monitor for and detect suspicious behavior while offering consumer protections backed by advanced technology, neither of which exist in the pervasive illegal market,” the statement read. “While regulation cannot eliminate all concerns related to game integrity, it significantly reduces risks by enabling collaboration between operators, leagues, teams, and relevant authorities to identify and hold accountable anyone engaged in illegal behavior.”
But some people see a bigger problem that goes beyond just the NBA scandal.
A push for more regulation
Mark Gottlieb is the executive director of Northeastern’s Public Health Advocacy Institute. And he’s been raising the alarm about what he sees as the harm of sports betting for some time.
He describes it as a public health crisis. But he thinks we’re just at the tip of the iceberg because in the roughly seven years since the Supreme Court opened the doors for legal sports betting in 2018, so much has already changed with online sportsbooks.
“They are absolutely driven by a stream of live data that comes from the sports leagues, which creates microbets, the ability to bet on every aspect of every game,” Gottlieb said. “You can have hundreds and hundreds of possible wagers in any individual contest. And they’re all presented to the user and created through the use of artificial intelligence platforms that the gambling companies utilize.”
Gottlieb points to research that shows a link between legalized online sports betting and issues like bankruptcy and domestic violence.
Sports betting is legal in some form in 39 states (including Massachusetts), Puerto Rico and D.C.
The Public Health Advocacy Institute, which got involved in a class action lawsuit against DraftKings over what it claims are deceptive marketing practices, has worked with national and state lawmakers to try to put in more guardrails for the industry.
Better health for bettors
Earlier this year, state Sen. John Keenan introduced the “Bettor Health Act,” a bill that would, among other things, get rid of prop bets on individual player performance and eliminate bets that are made during games.
It would also make the platforms responsible for making sure participants have the resources to actually participate in gambling, put more regulations on advertising — and increase taxes on online sportsbooks.
The Sports Betting Alliance, which is a trade association for DraftKings, FanDuel and BetMGM, told CBS Boston that raising taxes on sports betting will drive users to unregulated, offshore companies.
But Keenan is focused on trying to prevent people from becoming the type of bettor who would feel the need to go offshore in the first place.
“There’s a bucket already of people who are engaged in gambling … who are addicted gamblers. Yes, they can go to a black market if they find that these guardrails are too tight,” Keenan said. “But our goal really is to look at the generation that’s following that and prevent them from going down the path where there are no guardrails and they’re targeted and exploited and become problem or addicted gamblers.”
And as he sees it, there’s a tie between scandals like the one the NBA is dealing with and the widespread legalization of sports betting.
“It’s constant now. And it wasn’t prior to the legalization of sports betting,” he said. “And since then, with all the money being poured into sports betting, it’s only natural that people are gonna look to get a piece of that pie in any way that they can. Even if that means cheating and rigging and working with athletes to fix these things.”
