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The bombshell NBA scandal that unfolded as part of an FBI investigation last week has led many to question the sports betting market, even the legal side of it.
That was especially the case with Miami Heat guard Terry Rozier, who was among more than two dozen arrests for his role in the FBI’s sports betting probe, in which he allegedly gave non-public information about his injury status and when he would leave a game to hit certain prop bets.
There was a similar situation last season with ex-Toronto Raptors player Jontay Porter, who was banned from the NBA indefinitely and pleaded guilty to conspiracy to commit fraud. Porter, who is connected to this current FBI investigation, had previously been found guilty of disclosing confidential information to sports bettors about his own health status and betting on games in violation of league rules.
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Miami Heat guard Terry Rozier (2) watches during 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 happen on a perhaps 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 the legal side of sports betting is working.
“If you look at the chronology, the suspicious betting activity was flagged immediately, was reported immediately, investigations were initiated immediately,” King told Pakinomist Digital earlier this week. “You had the right people involved. Obviously, the leagues were out in front and aggressively trying to understand what happened, but they don’t have subpoena power, so they’re able to see some of it. But everybody was working in conjunction with the FBI, who were able to have subpoena power and really dig in. Ultimately, the perpetrators were brought to get caught, and I just wanted to get caught.”
Fanatics Sportsbook is a newer operation and was in the early stages of development when Rozier was accused of being involved in potential betting irregularities on a game on March 23, 2023. But King’s experience in this industry extends beyond the work he does with Fanatics Betting & Gaming now, having served as CEO and CFO of FanDuel for the past several years.
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So on the question of the future of sports betting, particularly the prop betting market, King provided a perfect analogy.
“This type of thing is inevitable and I look at it through the lens of — the parallel I draw is the stock market,” he explained. “People have been trading stocks for hundreds of years, and there has always been a risk of insider trading. Accordingly, there is a healthy and aggressive regulatory enforcement regime around making sure people don’t trade on insider information. This is no different.
“I see it as a good case study of the market and the regulation of everyone working and the industry participants working together. I hope the perpetrators were made an example of, because the element of deterrence is just as important.”
CEO of Fanatics Betting and Gaming, Matthew King at Fanatics Sportsbook at Ocean Casino Resort in Atlantic City, New Jersey on September 14, 2025. (Arturo Holmes/Getty Images)
King also gave some perspective on how these cases were caught in the first place and what an operation like Fanatics Sportsbook does when that flag comes up when bets start coming in.
“Many times the first flag that comes out of suspicious activity is a volume way above what we would have expected,” King said of a suspicious bet. “It typically tips and tips you to further investigations. Especially when one under [prop bet] or low-grade tennis match or something like that is above expectations, then it’s really a question of, ‘Where is it coming from? Who makes the effort? Where do they make that effort from? Is this consistent with their historical betting patterns?’ Such questions. We have a lot of analytical resources and a lot of people who spend time looking at this data and making sure we understand.
“Now, a lot of times you get a false flag. You dig into it and it’s like, ‘Hey, we didn’t expect this much action on the underdog, and it turns out the popular underdog had a big Instagram story and people are just rallying around a narrative that exists in sports,’ which is great. It’s healthy. So there’s a lot of false flags that end up raising those flags into something suspicious, and we report it to the appropriate authorities.”
In short, King knows that, like any market prediction, there will be those who want to gain an advantage. So the future of betting in any professional sport will have those trying to cheat the system.
However, King feels that the strongest point in getting through about this alleged criminal activity is that having a legal market, coupled with aggressive regulation and monitoring, can at least reduce the potential for illegality.
A self-service betting kiosk showing NBA game odds at Fanatics Sportsbook on November 23, 2024 in Columbus, Ohio. (Aaron M. Sprecher/Getty Images)
“The most important fundamental point in this conversation is that everyone understands that sports betting is going to exist no matter what,” he said. “You can’t show me an era of history, a country in the world, a sport that’s popular and doesn’t have some level of sports betting. We just have to accept that sports betting is going to exist. So it’s simply a question of do you want this to exist as a legal market or an illegal market?
“The reality is that this activity was caught because it’s a legal market, because you were able to have a relationship with leagues and have integrity monitoring services that you could flag data for and people could investigate. If you didn’t legalize sports betting, you would only have the illegal markets that have no commitment to integrity or consumer protection, which is the other side to remember if you have no interest to remember if you have no interest. sure you bet before for your funds or something like that.”
“I would argue that the best thing for the integrity of the game, the best thing for consumer protection is a two-pronged strategy of a legal and robust market paired with aggressive enforcement of the illegal market.”
In addition to having important Responsible Gaming tools for consumers, Fanatics Sportsbook also has a unique “Fair Play” policy that protects players from early player injury.
Charlotte Hornets guard Terry Rozier (3) looks to suit up against the Boston Celtics in the second half at the Spectrum Center. (Nell Redmond/USA Today Sports)
This consumer protection addresses the situations where it is clear that key players will be hurt, but also the potential of something like the Rozier case. Being a starting point guard on a team, Rozier’s prop bets are plentiful every night he’s on the court, but if he leaves early and never returns, Fanatics Sportsbook will void the bet through Fair Play.
Overall, there is no true way to eradicate the illegal side of sports betting, but operations like Fanatics Sportsbook and executives like King continue to put in place the necessary rules, technology and partnerships with leagues to ensure a fair and level playing field for all those who wish to gamble.
“We will always be up front with leagues and regulators on what is the right mix of prop betting 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 one where the rules were strict with what you can offer to the point where it doesn’t give consumers what they want, then they’ll go into the illegal market. You’re undermining the value of having a legal market. So I look at it as finding the right decision boundary and making sure we can also give consumers opinion.”
