The stunning indictment that led to the arrest of more than 30 people, including Miami Heat guard Terry Rozier and other NBA figures, on illegal sports betting charges has drawn new scrutiny to the thriving business of professional sports gambling in the United States.
Since widespread legalization, the multibillion-dollar industry has made it easy to place bets on everything from the outcome of games to the outcome of a single play with just a few taps of a cell phone. Today, it’s nearly impossible to go to a basketball, football, baseball or other professional game – or watch a game on TV – without seeing sports betting ads.
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Fans can place bets from their seats in the stadium, while “Bet” ticks scroll by on televised sports broadcasts. Top athletes are often at the center of promoting all this.
In Thursday’s indictment, federal investigators accused Rozier and other defendants of breaking the law by exploiting private player information to win bets on NBA games. Rozier’s attorney, Jim Trusty, said in a statement that his client is “not a gambler” and “looks forward to winning this fight.”
A separate indictment alleges that Portland Trail Blazers coach Chauncey Billups and others participated in a conspiracy to rig high-stakes card games. Billups’ attorney, Chris Heywood, released a statement denying the allegations, calling his client a “man of integrity.”
Regulating sports betting has proven to be a challenge – and experts warn of the consequences for gamblers who typically lose money. The very role of professional leagues in promoting gambling has raised concerns.
India’s government passed a sweeping bill banning online gambling in August after official data showed the companies had stolen $2.3 billion a year from 450 million people.
The ban affected card game, poker and fantasy sports platforms, including India’s hugely popular home-grown fantasy cricket apps.
India’s national cricket team was sponsored at the time by Dream11, the country’s largest fantasy sports gaming platform.
Explosion of legalized sports betting
Sports betting is probably as old as sport itself. But in the United States, legal gambling really took off in 2018.
That’s when the Supreme Court struck down the Professional Amateur Sports Protection Act, which banned sports betting in most states. Once permitted only in Nevada, sports betting is now permitted online or in retail locations in 38 states and Washington, DC. Missouri will become the 39th state on December 1.
Experts say the biggest jump has happened online, through smartphone apps and platforms like DraftKings and FanDuel. According to the American Gaming Association, legal sports betting generated $10 billion in revenue in the third quarter of this year, up about 19% from the same period a year ago.
The industry argues that legal betting generates money for states and can discourage illegal betting. Major operators highlight the technology they use to monitor suspicious activity. FanDuel said Thursday’s news illustrates “the stark contrast between the legal and illegal betting markets.”
Who benefits?
There is a lot of money on the table, both for those who place winning bets and for the platforms that make it possible. The NBA and other professional sports leagues have also created revenue streams by partnering with sportsbooks and raising advertising dollars.
Live match statistics provided by leagues are crucial to the sports world’s relationship with the gambling industry. When you can bet on what the next pitch will be in a baseball game, it’s because Major League Baseball sells data to platforms “at a pretty high price,” according to Isaac Rose-Berman, whose research focuses on sports betting as a fellow at the American Institute for Boys and Men.
The NBA has a partnership with Sportradar for its data rights. Sportradar, in turn, provides official NBA statistics from FanDuel Sportsbook. When the deal was announced in 2022, Sportradar touted it as a way “to monetize our long-term partnership with the NBA.”
How is sports betting regulated?
Each state has its own regulations and tax rates for sports betting. A handful of restrictions on where bets can be placed, allowing users to use mobile apps, but only while physically inside a casino or within a certain radius of a stadium, for example. Others limit which betting platforms you can use or what you can bet on.
“States have kind of opened a can of worms, and now some of them are starting to realize how crazy this world of sports betting is,” said Wayne Taylor, a marketing professor at Southern Methodist University.
An even more complicated factor is when players and other team or league personnel are involved. The NFL, NBA, MLB and NHL prohibit employees and players from betting on their league’s games, although some gambling is permitted in separate areas.
Legalized betting has some security advantages as unusual betting patterns – such as large bets placed on a random player’s performance – can be immediately reported. In some cases, bookmakers have eliminated odds on certain events to protect themselves from manipulation.
However, experts like Taylor note that corporate financial interests could challenge some of these aspects. And across the sports market, he says the large number of players and the scale of microbetting possibilities make potential manipulation “easier to hide”.
What are prop bets?
A prop is a type of bet that allows gamblers to bet whether a player will surpass a certain statistical number, such as whether a basketball player will finish above or below a certain total of points, rebounds, assists and more.
This type of wagering is central to the sports betting investigation announced Thursday. Investigators pointed to a March 23, 2023, game involving Rozier, then playing for the Charlotte Hornets.
Rozier played the first 9 minutes and 36 seconds of that game – and not only did he not return that night, citing a foot problem, he never played again that season. He finished with five points, four rebounds and two assists — a productive first quarter, but well below his usual full-game totals. At the time, many bettors took to social media to say something shady had happened regarding betting on his stats for that night.
More generally, the NBA has expressed concern about prop betting, while other sports leagues are concerned about the potential for manipulation.
Earlier this year, Ohio Gov. Mike DeWine urged his state’s gambling commission to ban prop betting after Major League Baseball placed two Cleveland Guardians pitchers on leave amid an investigation into sports betting.
What are the other pitfalls and social implications?
Sports betting also comes under criticism for opening the door to gambling addiction.
“The fact that it’s normalized, the advertising is aggressive, it’s available 24/7, the micro betting – all of that is adding up to a huge increase in usage among individuals,” Taylor said, citing algorithms and other incentives that betting platforms use to increase engagement.
Rose-Berman notes that platforms benefit the most from the return of the “biggest losers.” Recent research suggests that youth in low-income communities are particularly affected by the financial consequences of sports gambling.
“More than 90% of sports bettors won’t experience significant negative impacts, but it’s actually concentrated among the big losers and it will be devastating for them,” he said.
