Sports betting has become so ubiquitous and so massive in the US that it can be difficult to remember that at the start of 2018, it was only legal in four states, and only in Nevada could you bet on individual games.
All that changed in May of that year, when the Supreme Court stuck down the federal law that barred most forms of sports gambling. Since then, the legal sports gambling industry has spread to 38 states plus Washington, DC, with revenues of nearly $14 billion in 2024, much of which has come from burgeoning and highly addictive mobile apps like DraftKings and FanDuel.
The reason why sports betting was off-limits for so long was because of concerns that the sheer money involved could lead to scandals that would call into question the integrity of sports games.
Well, guess what? On Thursday, as part of a joint federal, state, and city investigation, the FBI announced at a Brooklyn press conference indictments of three current and former NBA players — including one well-known coach who’s in the Hall of Fame — for alleged involvement in apparent Mafia-driven theft, fraud, and robbery schemes that include detailed bets involving inside information…that calls into question the integrity of NBA games. And just in time for the start of the NBA season this week.
The indictments are only the latest betting scandal to hit pro sports, but it is shaping up to be by far the worst, and may well implicate other players. Yet the only really surprising thing is that it took this long after the legalization of sports gambling for a scandal of this scale to finally break. And that inevitability has as much to do with how sports gambling works today as it does with the sheer number of dollars at stake.
If you’re not one of the estimated 20 or so percent of US adults who placed a sports bet last year or held an online betting account, you may not realize just how much legalization and digitization have changed gambling. Not only can gamblers place a bet easily through apps, but they can also make prop or micro bets that might mean thousands of dollars are riding on something as small as who makes the next shot in an NBA game.
Micro bets heighten impulsivity and elevate the risk of problem gambling, and can open the door to damaging the integrity of the games themselves. While it’s difficult to imagine any pro athlete actively colluding with criminals to alter the outcome of a game, 1919 Chicago Black Sox-style, pulling yourself out of a game early with a feigned injury or simply missing the next shot isn’t too hard to do. Among the charges in this week’s indictment was that Miami Heat guard Terry Rozier told gamblers in advance that he would leave a game early, allowing them to make hundreds of thousands of dollars from inside prop bets.
Crooked sports bets don’t have to become widespread for fans to start questioning the integrity of games across the board. Which is precisely why pro sports leagues used to be squarely against legalized sports betting, so much so that all four major leagues and the NCAA jointly sued New Jersey in 2012 to stop that state’s push to legalize sports gambling, which in turn ultimately led to the Supreme Court decision that allowed states to decide on legalization for themselves.
Once the Supreme Court had made its decision, though, the possibility of earning billions off legalized gambling proved more than enough to convince pro sports leagues not just to drop their opposition, but to start wholeheartedly embracing the betting industry. Every major sports league has an official betting partner; individual teams have their own deals, and some have even put betting lounges in their stadiums. Betting lines are a major part of sports media now, which might not even exist without the utterly ubiquitous gambling ads that surround every broadcast.
Legalized sports gambling has come with other costs, not least the growing social and financial cost of problem gambling — one paper linked reduced household savings and worse credit to gambling legalization, while calls to problem gambling hotlines have spiked.
The Supreme Court made its 2018 decision for dry, technical reasons — something about how it was unlawful for federal legislation to dictate to state legislatures what they could or couldn’t authorize. But whether you’re a sports bettor or a sports fan, that decision — paired with the simultaneous growth of mobile apps that remove all the friction from gambling — has changed American society enormously. And Thursday’s indictments indicate that we’re only just beginning to see the consequences.
A version of this story originally appeared in the Future Perfect newsletter. Sign up here!
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