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

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This article was co-authored by Don Lee, Law Clerk.

On October 23, 2025, federal authorities unsealed indictments against more than 30 individuals—including current and former NBA players and coaches—in connection with two sweeping criminal investigations into illegal sports gambling and rigged poker games. The cases, dubbed Operation Nothing But Bet and Operation Royal Flush, have exposed a network of insider betting, organized crime, and fraud that implicates high-profile figures in professional basketball. But what federal laws are being used to charge them, and what state laws could be implicated in these cases?

1. Wire Fraud Conspiracy
18 U.S.C. § 1343 & 18 U.S.C. § 1349

Federal prosecutors invoked 18 U.S.C. § 1343 (Wire Fraud) and 18 U.S.C. § 1349 (Conspiracy to Commit Wire Fraud) to charge several individuals, including current and former NBA personnel, for their roles in a scheme to manipulate sports betting outcomes using insider information. 18 U.S.C. § 1343 criminalizes schemes to defraud others using electronic communications, such as phone calls, emails, or internet transmissions, that cross state lines. 18 U.S.C. § 1349 extends liability to individuals who conspire to commit wire fraud, even if they don’t personally carry out the fraudulent acts. These statutes are commonly used in cases involving financial scams, insider trading, and sports betting schemes in which confidential information is used to manipulate betting outcomes via digital platforms.

The indictment alleges that Miami Heat guard Terry Rozier shared confidential injury details with co-conspirators to facilitate fraudulent prop bets, while former player and coach Damon Jones reportedly sold sensitive medical data about NBA athletes to bettors. These actions were coordinated through electronic communications—text messages, betting apps, and encrypted platforms—triggering the wire fraud statute.

2. Money Laundering Conspiracy
18 U.S.C. § 1956

18 U.S.C. § 1956 criminalizes the act of knowingly engaging in financial transactions involving proceeds from unlawful activity with the intent to conceal the origin, ownership, or control of those funds. Commonly used in cases involving drug trafficking, fraud, and organized crime, this statute targets individuals who attempt to “clean” illicit money by funneling it through legitimate businesses, offshore accounts, or complex financial structures. The law also covers international transfers and efforts to avoid reporting requirements, making it a tool for prosecutors to go after criminal enterprises.

In the recent NBA gambling indictments, federal prosecutors charged several defendants with money laundering conspiracy under § 1956 for allegedly concealing profits derived from insider betting and rigged poker games. According to the DOJ, proceeds from these illegal activities were laundered through shell companies, cash handoffs, and coordinated bank transfers to obscure their criminal origin.

3. Operation of an Illegal Gambling Business
18 U.S.C. § 1955

18 U.S.C. § 1955 makes it a federal crime to own, operate, finance, or manage an illegal gambling business. To qualify under this statute, the gambling operation must (1) violate state or local law, (2) involve five or more individuals, and (3) operate continuously for over 30 days or generate more than $2,000 in revenue in a single day. This law is often used in cases involving underground betting rings, unlicensed poker operations, and organized crime-backed gambling enterprises. It allows for asset forfeiture and up to five years of imprisonment upon conviction.

The recent federal indictments involving NBA figures were reportedly tied to an illegal poker operation allegedly backed by organized crime families. Prosecutors are expected to rely on § 1955 to charge participants in this enterprise, which involved multiple individuals, operated over an extended period, and generated substantial daily revenue. The statute provides a framework for targeting not just individual bettors but the broader criminal infrastructure behind the gambling activity.

4. Extortion and Robbery Conspiracy (Hobbs Act)
18 U.S.C. § 1951

18 U.S.C. § 1951, commonly known as the Hobbs Act, criminalizes actual or attempted robbery or extortion that affects interstate or foreign commerce. Extortion under this statute includes obtaining property from another, with their consent, through wrongful use of force, violence, or fear. It is frequently used in cases involving organized crime, public corruption, and coercive schemes where individuals or groups use threats or intimidation to extract money or favors, often in connection with illegal enterprises.

In the federal investigation involving NBA figures, prosecutors reportedly used the Hobbs Act to target individuals who allegedly coerced players into participating in betting schemes or rigged poker games. For example, some defendants are accused of threatening athletes with reputational harm or financial retaliation if they refused to cooperate with the gambling ring. This use of intimidation to further an illegal gambling enterprise directly implicates § 1951.

State Laws that May be Implicated in Such Cases

While federal authorities have taken the lead in prosecuting the recent NBA gambling scandal, it’s important to recognize that states are the primary regulators of gambling activity within their borders. Each state has its own gaming statutes, licensing requirements, and enforcement mechanisms, so even after federal charges are filed, state prosecutors may pursue separate criminal actions for violations of local gambling laws. The Double Jeopardy Clause of the U.S. Constitution does not bar these prosecutions because the federal and state governments are considered separate sovereigns, allowing each to enforce its laws for the same underlying conduct independently.

Massachusetts – MGL c. 271 § 16A & c. 23K (Organizing or Promoting Illegal Gambling)

Under MGL c. 271 § 16A, it is a felony to organize or manage illegal betting operations involving four or more people. Under this law, NBA figures who coordinated insider betting or poker games could face up to 15 years in prison and $10,000 in fines. While MGL c. 23K governs legal gaming, violations of its licensing and integrity provisions—such as using insider data to influence bets—could trigger enforcement actions or criminal liability under § 16A.

Nevada – NRS § 465.070 (Gaming Fraud)

Nevada law criminalizes the use of insider information to influence betting outcomes. Under NRS § 465.070, it is unlawful to place or alter bets based on knowledge not available to all players, such as injury status or game manipulation. NBA players or coaches who used confidential team data to place bets or assist others in doing so could be charged with gaming fraud, a Category C felony punishable by up to 5 years in prison and $10,000 in fines.

New York – Penal Law § 225.10 (Promoting Gambling in the First Degree)

This statute targets individuals who advance or profit from unlawful gambling, including bookmaking operations. If NBA figures accepted or facilitated bets exceeding $5,000 in a single day, or received money from non-players in connection with betting schemes, they could be charged with a Class E felony under § 225.10. This law is particularly relevant if the gambling ring operated in New York or involved New York-based bettors.

As the legal landscape around sports betting continues to evolve, cases like this serve as a reminder that insider wagering, collusion, and organized gambling are not just violations of league policy; they are prosecutable offenses under both federal and state law. Organizations operating in the sports and gaming sectors should take note: compliance programs must be robust, proactive, and attuned to the legal risks posed by insider access and betting behavior. As one federal prosecutor stated in the press conference, “violating the law is a losing proposition—and you can bet on that.”