NBA Players are Betting on Themselves and Cheating at Poker

Decoding the recent FBI investigations

Editor’s note: From now on there will be a new post at least every Thursday. Also, last week I was on Fox & Friends talking about underage gambling. And if you’d like to see me placing bets while drinking Capri-Sun, check out this CNN documentary (now on HBO). Trailer here.

Terry Rozier on the Miami Heat

Last week, the FBI announced two investigations related to illegal gambling involving current and former NBA players.

The first, “Operation Royal Flush,” named thirty one indictees including various members of the mafia and five-time all-star and current Portland Trail Blazers coach Chauncey Billups. The defendants are charged with running illegal poker games using devices including marked cards and rigged shuffle machines to cheat players out of millions. The second, “Operation Nothing But Bet,” had six indictees including Miami Heat point guard Terry Rozier. The defendants are charged with rigging betting outcomes and feeding insider information to gamblers.¹

There’s overlap between the two investigations—three defendants are charged in both, including Damon Jones, an NBA player turned assistant coach and close friend of Lebron James—but it’s best to examine them individually.

Operation Royal Flush

To understand this case, it helps to know how high stakes poker really works. Most games with buy-ins above a few thousand dollars don’t happen in casinos. They’re held in private homes, hotel suites, or back rooms. Players prefer them for the convenience and curated lineups.² You can pay electronically instead of carrying bricks of cash. Hosts often provide open bars, private chefs, masseuses, and pretty much every amenity one could imagine.³

The problem is when you control the cards, dealer, table, and invite list, you can also control the outcome.⁴ Private games have always been easy to rig. If someone is willing to cheat—and at these stakes, someone always is—hosts can tilt the odds.

That’s essentially what prosecutors say happened. According to the indictment, the defendants ran a network of cheated poker games in New York, Los Angeles and Las Vegas. Billups and Jones were used as bait, high profile figures who were in on the scam and drew unsuspecting high rollers eager to play with them.⁵ Between 2019 and 2023 they profited more than seven million dollars, including $1.8 million from one particularly unlucky mark known only as John Doe #1.

For anyone who’s spent time around high stakes poker, none of this is new. These setups have existed for decades—Billups’s involvement was an open secret—and it’s widely known that many of the biggest private games are cheated. The only surprise is that it’s making headlines.

Operation Nothing But Bet

If Operation Royal Flush is proof old scams never die, Operation Nothing But Bet shows how easily they evolve. It’s also far more ominous.

Prosecutors allege that players and insiders shared confidential information with gamblers and manipulated prop bets—wagers on an individual player’s performance. The most brazen example: Rozier allegedly told co-conspirators he would remove himself from a game, who then placed hundreds of thousands of dollars in bets on him to record fewer than his expected number of points, rebounds and assists.⁶ Rozier left after nine minutes and didn’t return. Afterward, one bettor brought the proceeds to Rozier’s house, where the point guard counted his portion of the winnings in cash.

For the league it’s an existential integrity crisis, one that calls into question its embrace of legalized gambling. For sportsbooks, their entire business model depends on bettors believing that games are clean. And for fans who might never sit at Chauncey Billups’s poker table but watch every Heat game, there’s a sickening new possibility: that every missed free throw might not be a bad night but a payday. Billions in revenue and the faith of millions depend on a trust that’s now under assault.

The arrests have reignited the fundamental debate over legalized sports betting: whether it protects or threatens game integrity. Sportsbooks point to this case as proof the system works—their algorithms flagged unusual betting patterns, which triggered the investigation. Without legalization, they argue, this corruption would’ve stayed in the shadows, at unregulated bookmakers unaffiliated with leagues and unconcerned with catching cheaters.

Critics argue legalization didn’t uncover corruption; it created it. Widespread normalization and the explosion of exotic bets—along with the ability to combine them all into parlays, magnifying the payout—turned every possession into a potential scheme. A player can’t manipulate his rebounds prop if that market doesn’t exist—and before legalization, it didn’t.⁷ Today, companies like FanDuel and DraftKings offer hundreds of micro-markets per game.

Both sides are right. Legalization did create detection systems which caught this corruption—but it also created the conditions for it. The same technology that flags suspicious bets enables bets that otherwise wouldn’t exist. Two of the three main ‘integrity monitors’ in the US, Sportradar and Genius Sports, make most of their money selling data to sportsbooks, who use it to create the exotic markets those same companies then monitor. The NBA, along with the NFL, MLB, and NHL, also own equity stakes in these companies. The watchdogs profit from what they’re watching.

This creates a perverse incentive: catching corruption is bad for business. As Declan Hill, a match-fixing expert at the University of New Haven, recently told The New Yorker, the leagues’ primary concern “is that nobody knows about match fixing.”

Last year the NBA banned Jontay Porter, a benchwarmer nobody had heard of. But Terry Rozier? A starting point guard making $24 million a year? The league cleared him to play, even as the FBI continued to build its case. One NBA agent spelled out the calculation: “the NBA can’t risk catching a star because if they did, it discredits the whole league, it discredits the morality of the game, it discredits everything.”

Chasing More

As legal sports betting has spread across the country, leagues have rushed to collect their share of Americans’ gambling losses. Like all bettors, they chased the promise of easy money. They’re now discovering, like all bettors, there’s no such thing. The bill always comes due, though not always in the currency you expect.

The solutions aren’t complicated. Ban micro bets—wagers on a single pitch or possession—that are the easiest to manipulate and have the highest rate of user harm.⁸ Prevent active players from appearing in betting ads. Stop the incessant gambling promotion in stadiums and during broadcasts. Enforce stricter rules and levy larger fines on teams and coaches surrounding injury reports.⁹

The price tag is steep. The cost of inaction might be steeper.

Leagues have built their future on FanDuel’s mantra: Make Every Moment More. But more is a dangerous promise. More engagement becomes more addiction. More markets become more manipulation. More innovation becomes more exploitation.

When everything is more, nothing is enough. The love of sport is drowning in the noise. Leagues can still choose differently. But first they need to remember what they’re supposedly protecting, before there’s nothing left to save.

1. The craziest part about this case, to me, is how little money they made. Still waiting for details, and it’s likely lots of the betting took place at unregulated bookmakers in crypto (making it nearly impossible to track), but the FBI report says they profited “tens of thousands of dollars” off of “hundreds of thousands” in bets. If true it’s pretty horrendous match fixing, and I cannot begin to understand why Terry Rozier—who was making ~$290,000 per game—would do this. (It seems as though he had a large unpaid tax bill, but still! Get more sponsorships! Play some exhibitions!)

2. In places like New York, there are no nearby casinos. And by “curated lineup” I mean players who are fun to play with, and perhaps aren’t the most skilled. High stakes games at casinos are notoriously infested by professionals who are generally not fun to play with.

3. Not gonna go into detail here, but at a good game, you can get basically anything one could ever want. Such amenities are provided because the rake—money taken out of every pot by the host—is very high, often 5-10x what it would be at a casino.

4. For more detail on how rigged shuffle machines work, check out this video.

5. Sometimes these are random rich people, but often the marks are professional poker players, because they’re more likely to pay if they lose/get screwed, and are more aware of how bad the other players are and thus more likely to want to return. When I used to play high stakes games I was warned by many pros to avoid any games with current or former athletes because the games were likely cheated.

6. The other notable example involved Lebron James (Player #3 in the report); though Lebron did nothing wrong, it’s alleged Damon Jones received information that he was not going to play and had accomplices use that information to bet against the Lakers. He reportedly texted a co-conspirator, “Get a big bet on Milwaukee tonight before the information is out! [Lebron] is out tonight. Bet enough so Djones can eat to [sic] now!!!” At the time, Lebron was not ruled out on the NBA’s injury report for that game, yet he ended up not playing doing to a lower body injury. The Lakers lost.

7. Some people dispute this and argue these bets were around pre-legalization, which is sort of true, but they were very rare and it was basically impossible to bet more than a couple hundred bucks on them. For the purpose of this piece I’m kind of equating market existence with market liquidity, which obviously isn’t ideal but is mostly fine here, and I don’t want to spend too much time delving into the specifics there which are irrelevant for 99.9% of people.

8. In the past year or so and especially in the last couple weeks there has been a lot of talk about banning in-game betting, or player prop bets completely. I don’t think either of those are feasible (live bets account for ~50% of betting volume, props ~30% and are a major onramp for today’s gamblers). Even if it was feasible I am not sure it would be a net good (although I do support banning prop bets for college players). I think banning micro bets is a good middle ground, both from a harm reduction and political feasibility standpoint. They are also, in my opinion, the most destructive from a “sport lover” perspective. In general, my take is that if you place a bet and put down your phone to watch the game that’s ok, whereas if you stay on your phone to continually bet (like one does with micro betting) that’s bad.

9. Taking advantage of non-public injury news is one of the most common ways insiders get an advantage betting (as was the case in Operation Nothing But Bet), and teams and coaches regularly contribute to fan/gamblers’ angst about the impact of betting by being coy about whether or not players are going to play. More details here, the basic gist is that if a league is gonna partner with gambling companies, they have to insure some transparency of information otherwise fans and bettors are going to attribute coyness and privacy to gambling interests.