A press conference chocked with multi-jurisdictional chest-bumping and forced sports references on Thursday laid out the details of a very bad few years for integrity with the National Basketball Association.
The Department of Justice announced 34 arrests in two separate illegal gambling investigations, including that of Miami Heat veteran Terry Rozier on bank and wire fraud for allegedly manipulating his prop bets for his and other gamblers’ benefit. Six were charged in the sports betting fraud case.
FBI Director Kash Patel, also in attendance to tout the takedown of an illegal multi-state poker ring that led to the arrest of Portland Trail Blazers coach Chauncey Billups, lauded the Department of Justice for what he considered an unpopular decision in going after the NBA’s “insider trading saga.”
“This work,” he said, “is also representative of a colossal portion of the FBI’s mandate to keep America safe and to keep our entertainment industry fair and secure.”
Joseph Nocella Jr., interim United States attorney for the Eastern District of New York, called legal sportsbooks in the United States — those with numerous sponsor entanglements with pro leagues — “among the victims in this case.”
Even as stakeholders in the legal American sports betting industry trumpeted the arrests as an example of the system working, fan and bettor faith were victims, too. As also evidenced by the gambling investigation of Cleveland Guardians pitcher Emmanuel Clase, the well-compensated and well-known are under scrutiny now, also.
“What people hung their hat on before today was, one, that NBA players, especially ones that were sort of higher on the totem pole than Jontay Porter, or even coaches, they won’t get tied up in these sorts of things because they make too much money and the risk is too high,” national security and cyber security adviser Matthew Wein told InGame. “What we saw from today’s news is that players will use information that they know about their fellow athletes to try and coerce or potentially extort them.”
Inside the Rozier betting scandal
Federal investigators focused on a March 23, 2023 game against New Orleans in which Rozier, then a starter averaging 35 minutes a game for the Charlotte Hornets, left after nine minutes, 34 seconds with a reported foot injury. Sportsbooks in several states had notified authorities regarding a spike in bets on Rozier’s performance before that game — notably, according to ESPN, 30 wagers in 46 minutes for a total of $13,759 from a pro bettor on Rozier’s “under” props for points, rebounds, and assists.
Rozier, 31, never played for the Hornets again. He was traded to the Heat in January 2024.
The “Operation Nothing But Bet” investigation that snared Rozier was the same that revealed former, now-banished Toronto Raptor Jontay Porter’s conspiracy to manipulate prop bets for gamblers in 2023 and 2024, involving at least seven games. Porter is awaiting sentencing in December after pleading guilty.
Nocella Jr. dubbed the alleged conspiracy “one of the most brazen sports corruption schemes since online sports betting became widely legalized in the United States.”
Rozier and Billups were placed on leave. The National Basketball Players Association said in a statement: “The integrity of the game is paramount to NBA players, but so is the presumption of innocence, and both are hindered when player popularity is misused to gain attention. We will ensure our members are protected and afforded their due process rights through this process.”
Rozier was scheduled to appear in federal court in Orlando on Thursday but will be arraigned in New York, according to a DOJ spokesperson.
Former Cleveland Cavaliers assistant coach and former player Damon Jones was also arrested on Thursday after allegedly providing confidential information to gamblers. Jones, 49, played 11 NBA seasons and was a Cavaliers assistant from 2016 to 2018. Jones, Eric Earnest, and Shane Hennen were named in both the sports betting and poker rings.
While Billups was not indicted in the sports betting case, he matches the description of “Co-Conspirator 8,” who before a March 24, 2023 game allegedly told one of the gamblers that the Portland Trail Blazers would rest their starting lineup to tank for future draft positioning. Billups played in the NBA from 1997-2014 and has been a head coach since 2021.
Lessons to be learned from the scandal
Wein said that the amount of agencies involved in both operations — including Homeland Security Investigations — underscores that sports leagues need a unified approach to attack what has proved to be a sprawling problem that took federal policing authorities years to bring to the stage of arrests.
“All these other different agencies had to come together to do this work, yet the leagues insist on maintaining that they can do this by themselves, that they can police integrity and other things by themselves without working with the other sports leagues,” Wein said.
“The other thing that I will point out is that [NBA Commissioner Adam Silver] has said that integrity monitors are so sophisticated that they can spot anomalous gambling patterns and can nip problematic gambling or malign gambling in the bud. But over and over again today, the investigators and the prosecutors said that this was a multi-year investigation. So even if the integrity monitors can spot anomalous gambling — which it seems they did in certain instances in this investigation based on previous press reporting — it takes years and years to actually investigate what’s going on. By that time, the integrity of the sport is harmed, as it was in this case.”
The American Gaming Association trade group said in a release: “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.”
Said FanDuel in a statement: “Today’s events are deeply disturbing, and should concern fans, athletes, and everyone who loves sports and values integrity and fair play. They also illustrate the stark contrast between legal and illegal betting markets. At FanDuel, we use advanced technology and real-time monitoring to identify suspicious activity and work closely with leagues, data monitoring groups, and law enforcement. We are unwavering in our commitment to rooting out abuses by those who seek to undermine fair competition and the games we love. “
The terrifying possibility for the NBA and other leagues remains that this illicit activity coalesces with offshore sportsbooks that have no incentive to bring bad actors into that light. Then there’s the emerging sports event contract business on prediction markets.
“At least Kalshi has a deal in place with IC360 to do integrity monitoring,” Wein said. “But, yeah, the possibility certainly exists that this just moves offshore or to prediction markets. I certainly don’t think it’s too cynical to think that it’s a possibility. I don’t want to say it’s an eventuality or it’s already happening.”
Wein said the increase in scandals has a corrosive effect on even casual gamblers, potentially pushing some who, for example, have lost prop bets into questioning the entire system and possibly resorting to threats or violence.
Insiders allegedly dealt in info, coercion
According to charging documents, six defendants peddled insider information about NBA players between December 2022 and March 2024. The non-public information included the load management schedules of certain players and when others would remove themselves for “purported injuries or illnesses.”
“They relied on corrupt individuals, including Jones and Rozier,” Nocella Jr. said. “They also misused information obtained through longstanding friendships that they had with NBA players and coaches. And in at least one instance, they got their information by threatening a current player, Porter, because of his pre-existing gambling bets. Defendants used this non-public information to place hundreds of thousands of dollars in fraudulent bets, mostly in the form of prop bets on individual player performance.
“The bets were placed through online sportsbooks and also in person at casinos. The defendants relied on a network of strong bettors to place the maximum amount of bets to increase their potential profits. Most of these bets succeeded, and the intended losses were in the millions of dollars.”
NYPD Commissioner Jessica Tisch said that the gambling ring placed more than $200,000 in wagers on Rozier’s “under” statistics.
“Rozier exited the [March 23, 2023] game after just nine minutes, and those bets paid out, generating tens of thousands of dollars in profit,” she said. “The proceeds were later delivered to his home, where the group counted their cash. As the NBA season tips off, his career is already benched, not for injury, but for integrity.”
According to ESPN reporter Shams Charania, Rozier was arrested in Orlando on Thursday morning, the night after the Miami Heat lost 125-121 to the Magic. Rozier did not play in the game, with the reason listed a coach’s decision.
Rozier is in the final season of a $96.3 million, four-year contract.
The Eastern District acknowledged in September that an investigation into alleged suspicious gambling activity surrounding the performance of former Detroit Piston Malik Beasley yielded no evidence of wrongdoing.
