What Happens When Federal Law Meets Pro Sports and Doesn’t Like What it Finds?

Today’s topic is a federal case that’s got some in the sports world playing defense: charges against former and current NBA players and coaches for illegal sports gambling, rigged poker games, and organized crime.

Read the full article

• Former and Current NBA Players and Coaches Have Been Charged Under Federal Law. What Law?

About the authors

• Glenn J. Light
• Karl F. Rutledge
• Jason C. Hicks
• Don Lee

Transcript

Welcome to Womble Perspectives, where we explore a wide range of topics, from the latest legal updates to industry trends to the business of law. Our team of lawyers, professionals and occasional outside guests will take you through the most pressing issues facing businesses today and provide practical and actionable advice to help you navigate the ever changing legal landscape.

With a focus on innovation, collaboration and client service. We are committed to delivering exceptional value to our clients and to the communities we serve. And now our latest episode.

Host 1:

Welcome back to Womble Perspectives. Today’s topic is a federal case that’s got some in the sports world playing defense: charges against former and current NBA players and coaches for illegal sports gambling, rigged poker games, and organized crime.

Host 2:

So let’s talk about the laws. What federal statutes are prosecutors using to bring these charges?

Host 1:

There are four big ones. First up: Wire Fraud and Conspiracy to Commit Wire Fraud. These laws target schemes to defraud using electronic communications like texts, emails, betting apps, encrypted platforms.

Host 2:

And that’s where NBA players like Terry Rozier and Damon Jones come in. Rozier allegedly shared injury info to rig prop bets, and Jones reportedly sold medical data to bettors. All of it coordinated digitally, which triggers the wire fraud statutes.

Host 1:

Next up is Money Laundering Conspiracy. This law goes after people who try to hide the origins of illegally obtained money, often through shell companies, offshore accounts, or cash handoffs.

Host 2:

In this case, prosecutors say the profits from insider betting and poker games were laundered through a web of financial transactions designed to obscure their criminal source.

Host 1:

Then there’s Operating an Illegal Gambling Business. This one’s pretty specific. It applies when five or more people run a gambling operation that violates state law, lasts more than 30 days, or makes over $2,000 in a single day.

Host 2:

And the poker games allegedly backed by organized crime? They check all those boxes. So this statute gives prosecutors a way to go after the entire operation, not just individual players.

Host 1:

Finally, we’ve got the Hobbs Act, which criminalizes extortion and robbery that affects interstate commerce. In this case, it’s being used to charge individuals who allegedly threatened players to force them into participating in the schemes.

Host 2:

That’s a serious escalation. Some athletes were reportedly coerced with threats of reputational damage or financial retaliation. That kind of intimidation is exactly what the Hobbs Act was designed to address.

Host 1:

Now, while federal prosecutors are leading the charge, state laws could also come into play. Each state regulates gambling differently, and violations of those laws could lead to separate prosecutions.

Host 2:

Let’s look at a few examples. In Massachusetts, organizing illegal betting with four or more people is a felony facing up to 15 years in prison. And using insider data to influence bets could violate gaming integrity laws.

Host 1:

In Nevada, it’s illegal to use insider info to alter bets. That’s a Category C felony with up to 5 years and $10,000 in fines. Pretty relevant if any of these bets were placed in Vegas.

Host 2:

And in New York, Penal Law targets those who profit from unlawful gambling. If someone facilitated bets over $5,000 in a day, they could face a Class E felony.

Host 1:

So even if federal charges stick, state prosecutors can still pursue their own cases thanks to the dual sovereignty doctrine, which allows federal and state governments to prosecute the same conduct independently.

Host 2:

This case is a wake-up call for the sports world. Insider betting isn’t just a violation of league rules, it’s a criminal offense. And the legal consequences are real.

Host 1:

Organizations in sports and gaming need to take compliance seriously. That means educating players, monitoring data access, and building systems that prevent abuse.

Host 2:

Because as one federal prosecutor put it, “violating the law is a losing proposition—and you can bet on that.”

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