USA – NEW YORK Trends and Developments Contributed by: Mitchell Schuster and Richard T. Lobas, Meister Seelig & Schuster
Criminal enforcement There is already a significant effort underway in New York to protect the integrity of sporting events through criminal enforcement actions. For example, in two pending cases in the United States District Court for the Eastern District of New York ( U.S. v Aiello, et al. 1:25-cr-00314 and U.S. v Earnest, et al. 1:25-cr-00323), federal prosecutors charged high-pro - file defendants, including National Basketball Asso - ciation (NBA) player Terry Rosier, former NBA player Damon Jones and NBA coach Chauncey Billups, in cases alleging, among other things, illegal sports bet - ting conspiracies. In the Earnest case, prosecutors specifically allege the existence of a “prop bet” rigging scheme. Prosecutors say that the defendants used non-public information like player injury updates and playing status to place winning “prop bets” – bets made regarding the occurrence or non-occurrence during a game of an event not directly affecting the game’s outcome. Similarly, in another recent criminal enforcement case, Cleveland Guardians pitchers Emmanual Clase and Luis Ortiz face charges before US District Judge Kiyo Matsumoto in Brooklyn. The charges stem from alle - gations that they illegally conspired to throw specific pitches that would result in payouts for third-party bettors. That case is U.S. v Clase, et al. 1:25-cr-00346, pending in the United States District Court for the Eastern District of New York. Trial is currently set to begin on 4 May 2026. While not a New York case, a decision from Judge Jason D Woodbury of the First Judicial District in Nevada emphasised the concern surrounding insider manipulation in the context of prediction markets. In signing a temporary restraining order banning Poly - market from offering sport contracts in Nevada for two weeks, Judge Woodbury noted that the unregu - lated nature of prediction markets results in a lack of safeguards against bets being placed by owners, coaches, players or other officials who could influence the result from the inside. In another high-profile case involving defendants with ties to New York, a federal indictment was recently unsealed in the United States District Court for the
Eastern District of Pennsylvania. The indictment describes an alleged point shaving scheme involving more than 39 players on 17 National Collegiate Ath - letic Association (NCAA) Division I teams. There, 20 of the 26 defendants played college basketball dur - ing the 2023–24 and 2024–25 seasons. The scheme alleged in the indictment involves “fixers” who recruit - ed players to participate in a scheme, offering bribes of anywhere from USD10,000 to USD30,000 to inten - tionally underperform. These bettors would then place bets on the fixed games, the indictment alleges. Player and other official involvement in gambling schemes is a real and prevalent issue. The concern is amplified where the result of a particular prop wager is easier to manipulate than the outcome of a game as a whole. Officials argue that the concern is even more amplified if the “wager” is placed through an unregu - lated prediction market. The ease of manipulation is a key issue influencing enforcement policy decisions in New York and elsewhere. The issue has already captured the attention of the United States Attorney for the Southern District of New York, Jay Clayton. At a recent event, Mr Clayton stated publicly that he anticipates prosecutions in the prediction market arena, even offering the example of fixing a game of golf. Given the flurry of civil cases, criminal charges and proposed legislation, this area is likely to continue to develop throughout 2026 and beyond. NIL implications These legal issues surrounding sportsbooks and prediction markets arise against the backdrop of his - toric developments in college athlete compensation, including through name, image and likeness (NIL) deals. The year 2025 saw two major developments in the NIL industry in the form of settlement of litigation involving the NCAA, both with implications for New York efforts to curtail the potentially negative impacts of sports wagering and sports-based event contracts. First, in March 2025, a group of several Attorneys General, including New York Attorney General Letitia James, procured a settlement with the NCAA pro - tecting student athletes’ right to learn about potential
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