The Takeaway: New Sports Betting Scandal Brewing For NBA
Gambling roundup: More sports betting markets coming at Kalshi; Maryland online casino update
The NBA is taking the brunt of the blows on the integrity front among the major US sports.
A new report from the Wall Street Journal (paywall) says “Federal prosecutors have been investigating whether veteran NBA player Terry Rozier manipulated his performance as part of an illegal sports betting scheme.”
Rozier currently plays for the Miami Heat, but the investigation centers on a game that he played with the Charlotte Hornets, according to reports.
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More context from ESPN:
The NBA said it looked into the matter at the time and did not find that any league rules were broken.
"In March 2023, the NBA was alerted to unusual betting activity related to Terry Rozier's performance in a game between Charlotte and New Orleans," NBA spokesman Mike Bass said in a statement, first released to The Wall Street Journal and then to other outlets. "The league conducted an investigation and did not find a violation of NBA rules. We are now aware of an investigation by the U.S. Attorney's Office for the Eastern District of New York related to this matter and have been cooperating with that investigation."
Rozier maintains his innocence via his attorney. Click through to ESPN for more details on the game in question.
The Rozier investigation comes on the heels of the Jontay Porter scandal, which resulted in Porter being banned from the league and pleading guilty to a conspiracy to commit wire fraud.
The top line should be, but will not be, that this kind of activity is likely known because of protocols in place in the legal sports betting industry. If this had been happening offshore or at a local bookie, chances are we would never have known.
The interesting divergence here is that this was 1. initially investigated. 2. declared a nothingburger by the NBA (at least privately) and 3. then word of the federal investigation came down.
If Rozier is cleared: no harm, no foul. If he’s not, that’s a potentially a bigger problem for the NBA:
Rozier has been playing in the league for almost two years since this incident.
Rozier is a much higher-profile player than Porter — he is on a deal that is worth almost $100 million — and is one of the Heat’s leading scorers.
If Rozier ends up involved a federal case when the NBA didn’t pursue anything, hoo boy.
I won’t engage in more speculation — presumed innocent until proven guilty, etc. But this has the potential to be bigger than the Porter scandal, depending on how things go.
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Gambling news roundup
New sports markets coming at Kalshi (CFTC filing): One week after launching its sports trading options, Kalshi is already expanding its sports product. A new filing by Kalshi with the Commodity Futures Trading Commission will seemingly allow for a variety of new markets based on the language: “Will <achievement> be held by <participant>?” The one example given in the filing is “The 2025 winner of the French Open Men’s Singles Championship.” The filing seemingly opens up any tournament winner in any sport, and possibly any award handed out in a sport. The expansion of sports contracts at Kalshi comes despite the fact that CFTC (under the Biden administration) asked Crypto.com to take down sports markets during a review period.
Cannibalization dominated the conversation at MD online casino hearing (SBC Americas): It seems like any optimism about Maryland getting to the finish line will be tempered by a contentious committee hearing this week that focused on the impact of online casinos on land-based gaming. “In his opening remarks at a Senate Budget and Taxation Committee meeting, Watson came straight after the debate that tanked the bill last year, namely that online casinos cannibalize the revenues of brick & mortar gaming facilities. He noted how he sent every member of the committee a letter about the Pennsylvania industry and how land-based casino revenue has grown even with online casinos launching in 2019. ‘During the last year’s testimony Maryland Live! spent thousands to push a false narrative that jobs would be lost,’ Watson noted, referring to the efforts by the Cordish Company-owned casino in the state. He noted that the company currently operates an online casino in Pennsylvania, despite claiming it detracts from the bottom line.” More from Straight to the Point here as well.
PENN Entertainment Confirms Receipt of Director Nominations (PR): ”PENN Entertainment, Inc. (Nasdaq: PENN) (“PENN” or the “Company”) today confirmed that its Board of Directors has received notice from HG Vora Capital Management, LLC that it has nominated three director candidates to stand for election to the Company’s Board of Directors at PENN’s 2025 Annual Meeting of Shareholders. PENN issued the following statement: ‘The PENN Board and management team are committed to creating long-term value for all shareholders and will continue to take actions to achieve that objective. We regularly solicit feedback and engage with the investment community about our strategy, performance and business priorities. The Board’s Nominating and Corporate Governance Committee will carefully review HG Vora’s proposed director nominees, in line with PENN’s normal evaluation procedures, and present its formal recommendation regarding the election of directors in the Company’s proxy materials, which will be filed with the U.S. Securities and Exchange Commission ahead of the 2025 Annual Meeting.’” More context from the WSJ here (paywall). Investment firm HG Vora has long sought board seats, dating back to 2023. It has taken issue with the direction of Penn, which has strugged to gain online gambling market share in the US, and stock performance.
Please stop it, New York Times: The New York Times (via The Athletic) did a piece almost entirely about Super Bowl prop bets that you can’t bet on at regulated US sportsbooks. While they did mention that fact, this is also a terrible disclaimer for an industry that operates illegally in the US: “Most of the unorthodox prop bets come from offshore sportsbooks that do not have the same regulatory standards as the North American books.” I almost spit up my coffee after reading that washing of the offshore industry. “Same regulatory standings” is doing some heavy lifting here.
Fanatics pays out $240K on Anthony Davis departure: Fanatics is leaning into refunds for players that leave games early for injuries, much like daily fantasy pick’em operators do. When the Los Angeles Lakers’ Davis left a recent game against the Philadelphia 76ers, that led to a quarter of a million going back to bettors. During football season, Fanatics reports it paid out $3.5 million through the Fair Play program.
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