The NBA is trying to weather a crisis of integrity – it’s one of the biggest existential threats in its history. Recent investigations have led to the arrests of Portland Trail Blazers head coach Chauncey Billups and Miami Heat guard Terry Rozier – both in connection with illegal betting and rigged poker schemes. Headlines so far have focused on face cards and Mafia ties, but could there be a subtler foreshadowing of cryptocurrency here?
Cryptocurrency in money laundering
The link between the current scandals and crypto is in the financial plumbing. As per the federal indictments, the families backing the rigged poker games (which implicated Billups and Damon Jones) used digital assets to obscure their paper trail.
Prosecutors allege that members of the Bonanno, Gambino and Genovese families laundered the proceeds from these fraudulent games through crypto because traditional bank transfers leave more distinct footprints for regulators to pounce on. Crypto transactions can be obfuscated somewhat.
Jontay Porter as the crypto-trading precedent
The current arrests are mostly around money laundering, but the scandal involving Jontay Porter (co-conspirator and banned for life in 2024) shows the personal volatility crypto can introduce to players. Porter was a big crypto day trader who ran a Twitter account dedicated to trading tips (the signs were there).
Reports show that Porter’s questionable betting was driven by the fact that he needed to cover massive gambling debts. Aggressive financial behavior off the court like crypto trading was arguably what contributed to the liquidity crunch that made him vulnerable to these illegal bookmakers. That’s speculative, but it shows another risk involving crypto that is less talked about.
It also shows that, at least to some degree, crypto day traders and gamblers are often a similar cohort of people. That’s not to say they have bad intent, but there’s a dangerous feedback loop that everyone should be wary of. Likewise, those who are betting fairly with crypto may begin to take more betting risks during a crypto crash because upon withdrawal, it’s worth less.
The shadow economy
Nevertheless, it’s important to separate legal and illegal crypto betting, just as we would treat money laundering as its own crime. Razed, which is a Crypto Sportsbook available in US, shows that it’s possible to retain a squeaky clean image as a crypto betting platform so long as you have some level of licensing and KYC. There are many offers floating around and customers needn’t think they’re all unscrupulous.
For regulators, they’re interested in these scandals because they show that a shadow economy can form with crypto – one that is hard to police.
The NBA league itself has embraced regulated sportsbooks like FanDuel and DraftKings, and less-regulated crypto betting is booming. That’s fine in isolation, but there are bad actors around looking to make use of that.
The current NBA gambling investigations show that while the bets themselves might be tracked, the payments for the tips and the laundering of the winnings are increasingly moving onto the blockchain.
As the NBA grapples with these high profile scandals that are bringing with it lots of public scrutiny, it’s clear that the integrity of the game is being threatened by a handful of individuals. But, these individuals will always exist, and it brings into question the role that crypto and crypto betting play.
