By Drew Schott
In February, the American Gaming Association announced that the sports betting industry recorded a record $16.96 billion in revenue for 2025. The amount of money legally bet on sports, $166.94 billion, rose 11% from 2024. These numbers signify the continued exponential growth of sports betting in the United States, as 40 states – along with Washington, D.C. – offer a legalized form of online or in-person sports betting. Yet sports betting’s rise has coincided with scandals in both college and professional sports involving the sharing of inside information and players betting on performances involving their own teams and leagues.
Miami Heat guard Terry Rozier was arrested in October for allegedly taking part in an illegal sports betting scheme linked to the Mafia and organized crime families, in which he gave nonpublic information to bettors. Meanwhile, former National Basketball Association (NBA) center Jontay Porter was banned from the league for life in April 2024 after an investigation discovered that he bet on NBA games as a member of the G League and shared confidential information about his health and other performance-based matters with bettors.
“The cases of Jontay Porter and Terry Rozier demonstrate the issue of prop bets,” said Christopher DePaolo, a student at St. John’s University. “Both cases centered around issues of prop betting and involved bets on the players underperforming statistically. Both exited games early on purpose and shared insider information, examples of modern point shaving… Jontay Porter and Terry Rozier specifically underperformed… in order to impact sports wagering. Porter even bet on his own underperformance personally and this demonstrates the inherent issue with sports betting.”
The affairs involving Porter and Rozier are just two of the dozens of sports betting-related investigations, suspensions and bans to occur over the last seven years. To address the sports gambling issues impacting professional sports leagues, DePaolo advocated for the creation of an independent agency with federal authority from Congress – operating similarly to the Securities and Exchange Commission (SEC) – that works with leagues and sportsbooks to identify and reduce suspicious betting activity. DePaolo discussed this recommendation during his lecture, “How Different Leagues Can Adjust to the Changing Environment of Sports Betting,” at the Sport and Recreation Law Association Conference in New Orleans, Louisiana.
“In securities regulation, private firms such as broker-dealers or stock exchanges are usually the first to notice suspicious trading activity,” DePaolo said. “However, because the firms profit from trading, they’re not given full enforcement authority… Stock exchanges are legally required to report irregular activity to the SEC, which acts as a neutral body between the parties. They’re the ones that have the ability to investigate and impose penalties.
“Sports betting operates under a similar structure. Sportsbooks identify unusual activity, but they profit from these high-stakes wagers. Therefore, that creates a conflict of interest. Any independent regulator could address this imbalance by separating protection from enforcement, acting with sports leagues and working to oppose suspicious sports betting, even if a sportsbook fails to report it.”
According to DePaolo, this enforcement structure would require sportsbooks to report suspicious bets, with the independent agency identifying any that are not disclosed. DePaolo also believes that state governments could enact legislation similar to the now-overturned Professional and Amateur Sports Protection Act of 1992 (PASPA). This act previously enforced a federal ban on state-sponsored sports gambling across the country, with the exception of a few states.
Under three decades later in 2018, the PASPA was overturned by the Supreme Court in Murphy v. National Collegiate Athletic Association (NCAA) for violating the anti-commandeering doctrine of the Tenth Amendment to the United States Constitution. While the Supreme Court’s ruling catalyzed sports betting’s growth nationwide, DePaolo noted that the PASPA was rescinded because of its unconstitutionality, rather than on the merits.
“Therefore, the merits are still valid to protect integrity in sports and to stop the spread of state-sponsored sports gambling,” DePaolo said. “In that case, states could enact legislation like the PASPA, which would help protect sports integrity. Several states currently ban sports betting. Alabama, Alaska, California, Hawaii, Idaho, Minnesota, Oklahoma, South Carolina, Texas and Utah all have anti-sports gambling policies in place, so it’s not unprecedented for other states to pass similar legislation in order to protect sports integrity.”
However, DePaolo acknowledged that enforcing these proposed laws would come with challenges, especially since many sportsbooks were legalized following Murphy v. NCAA. He added that it is unlikely states will “reverse legislation that they had just recently passed” regarding sports betting markets. Yet, he believes these laws can help regulate matters including proposition (prop) betting, which is a wager on player stats and in-game outcomes among other developments, rather than the final score.
DePaolo called prop betting “one of the biggest threats to sports integrity” because of players’ ability to impact the sports betting market. For example, he cited how both Porter and Rozier allegedly notified bettors that they would be taken out of games early on, enabling these individuals to complete successful bets regarding their failure to reach certain statistical marks. State bans on sports gambling – per DePaolo – could limit these schemes going forward, including in college athletics.
NCAA President Charlie Baker released a statement in January calling on state gambling commissions to remove prop bets since they can lead to student-athlete harassment, a rise in the dissemination of insider information and student-athletes betting on their own performances. DePaolo commended that the independent agency he proposed “should” partner with the NCAA to combat the risks discussed by Baker.
In addition to regulating sports gambling, DePaolo also believes the aforementioned agency could help oversee prediction markets such as Polymarket. Unlike sports betting, prediction markets operate closer to stock exchanges by permitting consumers to bet on events in sports, politics and economics among other areas through the buying and selling of contracts regarding unknown future events. While Major League Baseball has announced a partnership with Polymarket, prediction markets are anticipating legal challenges, as Polymarket initiated a preemptive federal lawsuit against Michigan Attorney General Dana Nessel on March 4. Meanwhile, the Attorney General of Arizona – Kris Mayes – filed criminal illegal gambling charges against Kalshi, another prediction market, on March 17.
“Prediction markets present an interesting loophole in the legislation about how to regulate their bets on sports because it’s not technically betting on sports,” DePaolo said. “I think that’s where a federal agency that works with the sportsbooks comes in because it could also monitor these markets for suspicious bets. The agency could then work with the leagues and whatever markets are being bet on in order to identify suspicious bets and identify under-performance by players.”
Events, How Different Leagues Can Adjust to the Changing Environment of Sports Betting SLRA, (February 25, 2026), https://www.srlaconference.org/program-schedule/.
Drew Schott is a J.D. Candidate at Tulane University Law School. He is also a current Staff Writer for The Sports Lawyer Monthly.
