The Blurred Lines Between Friendship and Insider Trading

As a result of the federal indictments against N.B.A. players and others for illegal betting, a new wrinkle has emerged in the way friends of athletes can profit from their access. A close friend of LeBron James, Damon Jones, has been indicted for his role in a sports gambling ring and rigged poker games involving Mafia members. Jones used his friendship with an unnamed player, believed to be James, and his proximity to the N.B.A. to sell insider information to gamblers.

The case highlights the complicated layer that has emerged with the rise of legal sports betting. Access to a professional athlete can now be alchemized into edge, allowing friends to profit from their adjacency to a player, both with and without the player's cooperation. Some friends have even leveraged their connections to secure lucrative jobs or special privileges, such as access to the locker room and team flights.

The N.B.A. requires teams to instruct players about the dangers of gambling, including warnings about sharing information with friends. With the advent of prop bets and easy access to gambling on a phone in most states, friends can now use seemingly innocuous information to place lucrative bets.

Key Takeaways:

• The federal indictments against N.B.A. players and others for illegal betting have exposed a new wrinkle in the way old friends can benefit from their access to an athlete.
• Damon Jones, a close friend of LeBron James, has been indicted for his role in a sports gambling ring and rigged poker games involving Mafia members.
• Jones used his friendship with an unnamed player, believed to be James, and his proximity to the N.B.A. to sell insider information to gamblers.
• The rise of legal sports betting has created a complicated layer, allowing friends to profit from their adjacency to a player, both with and without the player's cooperation.
• The N.B.A. requires teams to instruct players about the dangers of gambling, including warnings about sharing information with friends.
• Players may not always be unwitting victims, as some, like Terry Rozier, have actively helped their friends make money off bets using insider information.
• Friends of athletes have even leveraged their connections to secure lucrative jobs or special privileges, such as access to the locker room and team flights.

Statistics:

• The indictment against Damon Jones includes charges related to a sports gambling ring and rigged poker games involving Mafia members.
• The N.B.A. has instructed teams to educate players on the dangers of gambling, including warnings about sharing information with friends.
• Prop bets have become a lucrative option for gamblers, with tens of thousands of dollars being wagered on events during games.
• The Miami Heat's Terry Rozier actively helped his childhood friend, Deniro Laster, make money off bets using insider information.
• Laster sold insider information for tens of thousands of dollars, with an unnamed co-conspirator financing a bet that Laster placed on Rozier's play.

Sources:

• The New York Times
• Sports Illustrated (April 2002)
• Associated Press
• The indictment against Damon Jones