MW Wave of sports-betting scandals proves the need for an independent watchdog to protect a $165 billion market
By Carolyn Pokorny and Danielle Blustein Hass
As indictments mount, the gaming industry faces a trust deficit with fans and stock investors that only an integrity commissioner can fix
A recent poll found that 70% of sports fans believe gambling threatens the integrity of games.
Game 1 of the Major League Baseball playoffs. Top of the ninth. Your team's all-star closer misses the strike zone. Bad pitch - or a federal crime?
Last month, U.S. prosecutors added fresh allegations to their case against Cleveland Guardians pitcher Emmanuel Clase, including that he manipulated a pitch during the 2024 MLB playoffs as part of a years-long illegal betting scheme. The first integrity alert, by all accounts, did not come until June 2025 - more than two years into the alleged scheme - and was triggered by suspicious bets on a teammate, not Clase.
MLB investigated and put both the teammate and, weeks later, Clase, on nondisciplinary paid leave. Both Clase and his teammate were federally indicted last November.
In a similar case, when the NBA investigated unusual bets placed on then-Charlotte Hornets guard Terry Rozier, it hired outside counsel and reviewed evidence, including his phone - and did not find any violation of league rules. Federal prosecutors later indicted Rozier as part of a broader gambling conspiracy.
The common denominator: Even when leagues investigate aggressively, the current system relies on prosecutors to finish the job.
Read: NBA's Rozier, Billups arrested in 'brazen sports corruption' probe as leagues confront illegal betting by players
The issue isn't a lack of effort or good faith - it's structural. Self-policing, no matter how rigorous, lacks the credibility to resolve integrity questions on its own. When leagues have to rely on the feds, it is no longer a governance issue - it is a business risk.
The solution: Pro sports needs an independent sports-integrity commissioner - an office the leagues would fund but that would operate independently. The commissioner would be able to investigate integrity threats, free from the conflicts inherent in self-policing.
Stronger oversight is not anti-business - it's risk management.
The financial stakes are huge. Americans bet more than $165 billion on sports in 2025. DraftKings $(DKNG)$, Flutter Entertainment $(FLUT)$, MGM Resorts International (MGM), Caesars Entertainment $(CZR)$ and other sports-betting stocks are valued on the premise that games are legitimate.
Meanwhile, professional sports leagues reportedly earn more than $1 billion annually from gambling partnerships, in addition to roughly $40 billion from media rights, sponsorships and tickets - revenue that flows to Walt Disney $(DIS)$, Fox $(FOXA)$, Comcast $(CMCSA)$ and other broadcast partners. And don't forget prediction markets such as Kalshi and Polymarket, where trading volume reached tens of billions of dollars in 2025.
Each new platform creates another operational and reputational weak spot. Competition is the product, but trust is the foundation - and it's being eroded. A recent poll found that 70% of sports fans believe gambling threatens the integrity of games. For shareholders of teams, sportsbooks, prediction markets and media companies that have committed billions of dollars to the games, integrity is not abstract. It underpins the entire sports economy and all the stock-market valuations built on top of it. Stronger oversight is not anti-business - it's risk management.
Leagues on their own
The regulatory playing field is crowded, yet no one is responsible for answering the core governance question: Can the leagues credibly police themselves?
The leagues point to their integrity-monitoring firms, including IC360 and Sportradar, which flag suspicious betting patterns. Those efforts matter, but flagging suspect bets is not the same as figuring out the facts. When monitors flag something suspicious, leagues investigate and decide the outcome. Even when they work in good faith, credibility has already broken down.
Leagues acknowledge they need outside help. NBA Commissioner Adam Silver blames the state-by-state patchwork governing sportsbooks, and both he and MLB Commissioner Rob Manfred have called for federal legislation.
But with the regulatory picture getting more muddled, waiting on Congress is not the answer. Legislators are already demanding briefings from commissioners, and the U.S. Commodity Futures Trading Commission has warned about insider trading and fraud in prediction markets. The Arizona attorney general this week indicted prediction market Kalshi for illegal gambling. Meanwhile, federal regulators have raised questions about which agencies have jurisdiction over these platforms, and several states have challenged federal oversight.
The regulatory playing field is crowded, yet no one is responsible for answering the core governance question: Can the leagues credibly police themselves? The longer leagues wait, the more likely it is that regulation will arrive in reaction to the last scandal instead of in preparation for the next one.
Read: Scandals aren't slowing America's sports-betting boom. But they've led some prop bets to shrink to a maximum win of just $200.
Playing by new rules
Right now, leagues have breathing room to design oversight on their own terms.
When the 1919 Black Sox scandal almost destroyed pro baseball's credibility, team owners appointed a federal judge as commissioner and gave him broad authority to investigate. The sport survived because fans believed someone independent would get to the bottom of the scandal. Today's legalized-gambling environment makes the financial exposure far more expensive than in 1919.
Modeled on the watchdogs the securities industry created following repeated scandals, like the Financial Industry Regulatory Authority, the sports-integrity commissioner would be funded by the industry but independent. The office would investigate integrity flags, coordinate with law enforcement, refer crimes for prosecution and recommend best practices to prevent future wrongdoing. It would follow defined rules, such as requiring advance notice, the chance to respond and confidential review. It would be independent, not unchecked.
The creation of Finra required an act of Congress and SEC supervision. This proposal does not. The leagues, which are private companies, could create this office voluntarily. Its authority to act would come from contractual obligations instead of federal statutes or government powers.
Federal regulation is unlikely in the near future, but it becomes more probable when political winds shift. Right now, leagues have breathing room to design oversight on their own terms.
Funding would come from league assessments, not fines. Leagues could adopt a charter and appoint a leader with federal investigative experience and a reputation for fairness - and prove that, amid the explosion in betting, they are committed to keeping the games honest. The upshot: Stakeholders would have someone they trust to whom they could report their concerns, without always bringing in the feds.
This is not about leagues giving up authority. It is about smart leaders off-loading risk. Sponsors and media partners invest billions on the assumption that the competition is real. Integrity failures are governance risks that investors, sponsors and boards cannot ignore. A sports-integrity commissioner protects the brand and core business. It allows leagues to say: "We handed this off to an independent authority with real investigative power. They will get to the bottom of it."
Fans should not have to watch the ninth inning and wonder. Either someone they can believe in will figure out what happened - or fans will lose trust in the game. Who would take that bet?
Carolyn Pokorny previously led the U.S. Attorney's Office for the Eastern District of New York as the acting U.S. attorney and first assistant, and was inspector general of New York City's Metropolitan Transportation Authority.
Danielle Blustein Hass is a strategy and communications specialist who previously served at the Eastern District U.S. Attorney's Office and the Metropolitan Transportation Authority's Inspector General's Office.
Plus: Sports-betting allegations hit NCAA basketball as prosecutors charge 20
More: Allegations of insider trading emerge over prediction-market bets tied to Iran conflict
-Carolyn Pokorny -Danielle Blustein Hass
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 18, 2026 13:39 ET (17:39 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments