Say it ain't so, Chauncey
The news that NBA Hall-of-Famer and current Portland Trail Blazers coach Chauncey Billups, Miami Heat guard Terry Rozier, former NBA player Damon Jones, and possibly other NBA players, coaches, assistant coaches, and hangers-on have been indicted for various gambling-related offenses is shocking, but only in the classic Casablanca sense. As professional sports leagues have increasingly formed lucrative partnerships with sports gambling platforms, they have fueled the growth of a national addiction. The only thing that's shocking about the allegations in the indictments is that it took so long for these sorts of charges to surface.
That said, I confess that I was initially puzzled about the involvement of Rozier--who made $25 million in basketball salary last year--and Billups--who made nearly $5 million in coaching salary last year and way more than that during his playing days. Jones, I learned, earned nearly $22 million during his playing career, but he retired in 2012, and many professional athletes squander their fortunes, so I found it more believable that he would have tried to profit based on inside information. Perhaps he needed the money. But how do we explain Billups, Rozier, and perhaps others who didn't need the money?
The most obvious answer is: What do you mean, they didn't need the money? We routinely see professional athletes who earn, say, $40 million playing for a team that wins a championship leave for another team that will pay more money, even if the new team will not be competitive and even though no one needs more than $40 million per year. Super-rich people, whether they are athletes, entertainers, successful tech firm founders, or hedge fund managers always want more money. They want it even when there's nothing it will buy them that they can't afford already. They want it because they are super-competitive and see each additional dollar of wealth as additional validation--a sign that they are winning. So simple greed could well be the reason why Billups, Rozier, and others won't be able to say it ain't so.
I suspect that's not the whole of the explanation, however. Most successful professional athletes did not grow up wealthy and have friends plus a great many people who claim to be friends who will want to ride their coattails. I imagine that a great many NBA (and NFL and MLB) players have been asked by such people for tips of the sort that Jones allegedly sold: information about an injury to a star player that can then be used to significant advantage for prop bets. This is speculation on my part, but I would not be surprised if some players who aren't themselves profiting from sharing inside information have been passing such information along to friends and acquaintances, perhaps often under pressure from their real or would-be entourage.
None of that is to excuse such behavior, but I think it's worth separating out the conduct that undermines the integrity of professional sports from the conduct that undermines the integrity of gambling on professional sports.
Rozier allegedly faked an injury to take himself out of a game in 2023, having given a friend advance notice of his plan to do so. The friend and his associates placed over $200k in prop bets on Rozier under-performing his expected stats. That was a pretty straightforward example of what used to be called shaving points, except that shaving points to allow gamblers with inside information to beat the spread was much harder in the old days. It typically required the cooperation of more than one player. The spread of prop bets allows an individual athlete to control the outcome of bets concerning only that player's performance. Even so, and even if the team won despite Rozier's allegedly feigned injury, such conduct compromises the integrity of the sport.
But now consider what Jones allegedly did. He allegedly conveyed true information about the injury status of LeBron James and Anthony Davis. Doing so gave an unfair advantage to gamblers who bet on the Lakers to lose or placed prop bets on James and/or David under-performing, but nothing Jones allegedly did or said concerning the star players' injury status affected the outcome of any part of any game.
In saying that, I don't mean to say that the alleged conduct is legal. It isn't. But we can gain some insight by comparing what Jones allegedly did with insider trading.
Some scholars and other commentators argue that insider trading should not be illegal because it doesn't affect the allocation of capital. In fact, these people argue, insider trading gets information into the market faster than it would otherwise get there and thus facilitates aligning share prices with value. I don't agree with this view, because it seems to me to ignore systemic effects. Yes, a single undetected instance of insider trading gets information into the market faster, but once it is known that there is a great deal of trading on insider information (as it would be known if insider trading were legal), investors who don't have inside information will withdraw their capital from the market.
If we value capital markets (as I do, albeit with all sorts of qualifications), then we don't want people trading on inside information. Conversely, if we disvalue sports gambling (as I very much do), then it would be good for the public to know (or even to think) that there is widespread cheating of the sort alleged against Jones. Gamblers without inside information would hesitate to make prop bets on any player's performance knowing that there's a decent chance that people taking the other side of the bet have inside information.
It would be nice to think that the leadership of the NBA and the other professional sports leagues are aware of and care about the distinction between corruption of the game itself and mere corruption of gambling on sports. Unfortunately, the leagues have made their deals with the devil. The NBA earns substantial revenue from its partnerships with the betting websites, and the ability to bet on any number of possibilities--even when the outcome of a game is certain--means that the games hold the attention of gamblers longer than of mere fans. Watch any sports telecast these days and you will not only see advertisements for sports gambling but the sportscast itself integrating information of interest only to gamblers into the show.
Sports gambling poses risks to athletes, gamblers (often engaged in compulsive behavior), and sports leagues themselves. Ideally, the latest scandal would lead the NBA and other pro leagues to re-evaluate their encouragement of and relationship with sports gambling. Realistically, I'm betting they won't.
-- Michael C. Dorf