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The explosive NBA scandal that unfolded amid an FBI investigation last week has led many to question the sports betting market, even its legal side.
This was particularly the case for Miami Heat guard Terry Rozier, who was among more than two dozen arrests for his role in the FBI’s investigation into sports betting, where he allegedly gave non-public information regarding his injury status and when he would leave a game to make certain side bets.
A similar situation occurred last season with former Toronto Raptors player Jontay Porter, who was banned from the NBA indefinitely and pleaded guilty to conspiracy to commit wire fraud. Porter, who is linked to this current FBI investigation, was previously convicted of disclosing confidential information to sports bettors about his own health and betting on games in violation of league rules.
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Miami Heat guard Terry Rozier (2) watches the second half of an NBA basketball game against the Washington Wizards, Sunday, March 31, 2024, in Washington. (AP Photo/Nick Wass, file)
So, seeing a situation like this happening on perhaps a larger scale, Fanatics Betting & Gaming CEO Matt King was “disappointed” to see “criminal elements” come into play in a market that has grown exponentially as more states legalize it. But given his expertise, King explained why he believes this situation proves that the legal side of sports betting works.
“If you look at the timeline, the suspicious betting activities were immediately reported, the investigations were immediately launched,” King told PK Press Club Digital earlier this week. “You had the right people involved. Obviously the leagues were ahead of the game in trying to aggressively figure out what was going on, but they don’t have subpoena power, so they’re able to see some of it. But everyone worked in conjunction with the FBI, who was able to have subpoena power and really investigate. Ultimately, the perpetrators were caught and I’m sure they’re going to be brought to justice.”
Fanatics Sportsbook is a newer operation and was in the early stages of its development when Rozier was accused of being involved in possible betting irregularities during a March 23, 2023 game. But King’s experience in this industry goes beyond the work he currently does at Fanatics Betting & Gaming, having served as CEO and CFO of FanDuel in previous years.
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So, when it comes to the question of the future of sports betting, particularly the prop betting market, King gave a perfect analogy.
“This kind of thing is inevitable, and I look at it through the prism of the stock market,” he explained. “People have been trading stocks for hundreds of years, and there has always been a risk of insider trading. Therefore, there is a healthy and aggressive regulatory enforcement regime to ensure that people are not trading based on inside information. This is no different from that.
“I view it as an excellent case study in how the market and regulation work, and how industry players work together. I hope the authors will be an example, because the element of deterrence is just as important.”
Matthew King, CEO of Fanatics Betting and Gaming, inside the Fanatics Sportsbook at the Ocean Casino Resort in Atlantic City, New Jersey on September 14, 2025. (Arturo Holmes/Getty Images)
King also gave some insight into how these cases were caught early on and what an operation like Fanatics Sportsbook does when that flag appears when bets start coming in.
“Often the first report of suspicious activity is much higher volume than we expected,” King said of a suspicious bet. “This generally alerts you and directs you to further investigation. Particularly, when a subcontractor [prop bet] or a low-level tennis match or something like that exceeds expectations, then the real question arises: “Where did this come from?” Who makes the bet? Where do they make this bet from? Is this consistent with their historical betting patterns? Questions like that. We have a lot of analytical resources and a lot of staff who spend time looking at this data and making sure we understand it.
“Now a lot of times you get a false flag. You dig into it and you’re like, ‘Hey, we didn’t expect this much action against the underdog, and it turns out the popular underdog had a big Instagram story, and people are just accumulating narratives that exist in sports,’ which is great.
In short, King knows that, like any market forecast, there will be those who want to take an advantage. So the future of betting in any professional sport will incentivize those who attempt to cheat the system.
However, King believes the most important point to make about this alleged criminal activity is that a legal market, coupled with aggressive regulation and oversight, can at least decrease the potential for illegality.
A self-serve betting kiosk displaying NBA game odds in Fanatics Sportsbook on November 23, 2024, in Columbus, Ohio. (Aaron M. Sprecher/Getty Images)
“The most important fundamental point of this conversation is that everyone understands that sports betting will exist no matter what,” he said. “You can’t show me an era in history, a country in the world, a sport that’s popular that doesn’t have a certain level of sports betting. We just have to accept that sports betting is going to exist. The question then is simply do you want this to exist as a legal market or an illegal market?
“The reality is that this activity was intercepted because it was a legal market, because you could have relationships with leagues and have integrity monitoring services that you could report data on and people could investigate. If you didn’t legalize sports betting, you would just have illegal markets that have no commitment to integrity or consumer protection, which is the other side to remember. If you were betting on a gambling site illegal sports betting, they have no requirements, no interest in making sure you bet within your means or things like that.”
“I would say the best thing for the integrity of the game, the best thing for consumer protection is a two-pronged strategy: a robust legal market, coupled with an aggressive crackdown on the illegal market.”
Fanatics Sportsbook, in addition to having key responsible gaming tools for consumers, also has a unique “fair play” policy, which protects bettors from early player injuries.
Charlotte Hornets guard Terry Rozier (3) looks to pass against the Boston Celtics during the second half at Spectrum Center. (Nell Redmond/USA Today Sports)
This consumer protection concerns situations where it is clear that key players are being harmed, but also the potential for something like the Rozier case. As a team’s starting guard, Rozier’s prop bets are plentiful every night he’s on the court, but if he leaves early and never returns, Fanatics Sportsbook voids that bet via fair play.
Overall, there is no real way to eradicate the illegal side of sports betting, but operations like Fanatics Sportsbook and leaders like King continue to put in place the necessary regulations, technology, and collaborations with leagues to ensure a fair and level playing field for all who wish to play.
“We will always be on the front lines with the leagues and regulators to determine what is the right combination of prop bets to offer,” King said. “What I would say, though, is that there is a balance. Because at the end of the day, if you have a legal sports betting market, but where the regulations are strict on what you can offer to the point of not giving consumers what they want, then they will turn to the illegal market. You will undermine the value of having a legal market. So I see it as finding the right balance that ensures that we can limit and make common sense decisions, but also do something that consumers want.”
