Betting scandals have rocked Major League Baseball and the National Basketball Association in recent months, raising questions about the risks of so-called “prop bets.” The term refers to a wager on a specific individual performance or occurrence within a game, which does not necessarily depend on the final score.

Microbets are seen as a faster subset of these wagers. 

Recently, it was alleged that Cleveland Guardians pitchers Emmanuel Clase and Luis Ortiz had roles in a pitch-rigging scheme to manipulate the outcome of prop bets. Both were indicted in November on multiple counts of wire fraud, conspiracy to influence games by bribery and money laundering conspiracy. The charges were brought in the U.S. District Court for the Eastern District of New York. 

The defendants allegedly threw balls on purpose well outside of the strike zone to ensure bettors would win money on whether the pitches would be balls or strikes. The pitchers had been on “non-disciplinary leave” since July, pending investigation. Both have pleaded not guilty to pitch rigging and the other charges. Their lawyers did not respond to ABA Journal interview requests. 

Those indictments came on the heels of the Justice Department filing criminal charges a few weeks earlier against current and former NBA players, most notably Miami Heat guard Terry Rozier. Those were also filed in the Eastern District of New York.

Rozier allegedly tipped off a friend that he planned to leave a 2023 game early due to a purported injury to help a group of gamblers place successful wagers based on this information. In all, they allegedly used that confidential information to win more than $200,000 by betting on Rozier’s “under” statistics, meaning he would have less than a specific number of points, rebounds, and assists. Rozier exited the game in question after just nine minutes. 

James Trusty represents Terry Rozier.

“We look forward to defending Terry Rozier against legally misplaced and factually unsupported charges,” Trusty told the ABA Journal. 

Professor Matt Mitten, executive director of the National Sports Law Institute at Marquette University Law School, called the developments “very troubling.” Mitten has co-taught a course for many years with former Major League Baseball Commissioner Bud Selig.  According to Mitten, Selig always said, “If there’s a scintilla of doubt about the integrity of the game, you don’t have a sport.”

Noting that individual athletic performances are “easier to rig” than inducing a whole team to participate, Mitten says, “It’s not a bad idea to ban these prop bets,” calling them “a major issue.” 

Eric Webber, a certified gambling treatment counselor and the legal professionals program coordinator at Caron Treatment Center, suggested the pitchers got caught up in a system that helped magnify the problem with prop bets. Noting how widespread legalized sports betting has become, Webber said, “We’ve opened up a Pandora’s box that’s not easily closed.” 

In 2018, the Supreme Court struck down a federal law that effectively banned commercialized sports betting in most states. In the aftermath of that ruling in Murphy v. National Collegiate Athletic Association, 41 jurisdictions, including 39 states, have legalized gambling.

“Legalization didn’t cause the problem, but it has normalized it,” says Brooklyn Law School sports law professor Jodi Balsam. “It lowered the threshold for bad actors ... and more needs to be done to anticipate incidents like these.”

Following the news about the Clase and Ortiz indictments, MLB announced in conjunction with its authorized sportsbook partners, including FanDuel and others, that it is putting a nationwide $200 cap on prop bets for individual pitches.

But even if further steps are taken to curtail prop bets, Webber says, “kind of like with Prohibition in the 1920s, folks motivated to do it will still find a way to bet.” But he also called MLB’s new $200 limit on pitch bets “a step in the right direction.”

James Nussbaum, a partner with Church Church Hittle & Antrim and former in-house counsel at Indiana University, suggested there may be more fixing stories coming. He says college athletes are especially susceptible to being targeted by unsavory bettors.

The National Collegiate Athletic Association recently declared six athletes from three different universities permanently ineligible for their involvement in “betting-related game manipulation and/or providing information to known bettors.”

“It’s really easy to manipulate these microbets,” Nussbaum says. “When you take it down to student athletes, and it’s their one chance to capitalize on their ability, it’s even more tempting to get involved.” He adds that sharing information that’s not supposed to be public, such as injury information, also is a real problem.

On the professional level, former NBA player and coach Damon Jones is being accused of selling private, insider injury information to gamblers about two Los Angeles Lakers players, Courthouse News Service reports.  

Also, Jones and Portland Trail Blazers head coach Chauncey Billups, who is currently suspended without pay, are charged with conspiracy to commit wire fraud and conspiracy to commit money laundering for allegedly luring unsuspecting victims into rigged poker games. Billups was charged in the U.S. Eastern District of New York, as was Jones. Their indictment can be viewed here. 

Mark Mukasey, who represents Billups, told the ABA Journal that his client has pleaded not guilty. Kenneth J. Montgomery,  Jones' counsel, told the publication that he had no comment. Jones also pleaded not guilty. 

The National Football League has always banned certain types of prop bets that can be affected by one player, such as whether a quarterback’s first pass will be incomplete or whether a kicker will miss a field goal attempt. But it permits bets, as do the other major professional sports leagues, on a player’s cumulative statistics for a game.

Noting the leagues, team owners and sports books make a lot of money off sports gambling, Nussbaum calls it “wishful thinking” to rely on the leagues for regulation. 

According to Balsam, the most effective way to uphold integrity is by convincing state gaming commissions and legislatures to ban categories of prop bets.

“The leagues have no authority to ban prop bets other than that conferred through a contractual relationship with a sportsbook,” she says. “Even if the leagues can dictate to official sponsors like FanDuel and DraftKings to stop offering prop bets, other legal sports books will continue to offer those bets.”

However, Mitten points out that professional sports commissioners have “very broad authority to act in the best interests of the game,” though that deals more with discipline. Still, the potential for severe discipline can serve as a deterrent.

Major League Baseball first granted that authority following the infamous Black Sox scandal, involving eight Chicago White Sox players accused of intentionally throwing the 1919 World Series for money from a gambling syndicate. All received lifetime bans, though they were acquitted in their criminal trial.

The experts agree that Clase and Ortiz are looking at lifetime bans if the allegations are true. 

“That’s about as cardinal a sin as you can have,” Nussbaum says. “As we move forward, we’ll find more of this is out there, and it’s a lot more widespread than people want to believe.”

Updated Dec 4 at 5:03 p.m., to include response from Kenneth J. Montgomery.