Today, the world’s most notorious sports bettor Billy Walters was sentenced to 5 years in prison for his part in an insider trading scandal which made him tens of millions of dollars and also sullied the name of one of the world’s most famous golfers. Details of the sentencing can be found here:
For those of you who don’t know who Billy Walters is, he became quite famous over the last twenty years for making massive sums of money off sportsbooks around the world. The sharpest bettor in history, Walters has terrorized companies in Vegas and online with his sports prediction prowess. It got so bad that he was virtually banned from almost every sportsbook in Las Vegas. He quickly turned his attention to offshore gambling websites, using fake names to create accounts. However, soon enough he was discovered there as well, resulting in many of those sites refusing to take his action.
Walters has had to turn to “beards” to make hundreds of smaller wagers on his behalf; these people are paid to enter a sportsbook or go online to place bets based on Walters’ direction. The hope was that the sportsbooks wouldn’t notice if the action was smaller and spread out all over the place. This allowed Walters to continue to make money although the management of the operation is much like many multi-national companies.
Strangely, it wasn’t sports betting that brought Walters down, but actual insider trading. As a celebrity, he would often find himself in the company of CEOs and other prominent figures, all of whom were no doubt in awe of the empire he had built. Lavish homes, a private jet, and countless other luxuries made Walters a popular dinner guest, but it was his cash that people wanted to be invested in their companies.
This case centered on Dean Foods and their Chairman Tom Davis. As the prosecution alleged, Walters was the mastermind behind a 6-year insider trading scenario in which he used the information given to him by Davis, whom he has befriended, to manipulate stock prices in Dean Foods to the tune of over $40 million in profit.
The interesting wrinkle, in this case, came during the trial when it was revealed that one of the people involved in profiting from this inside information was none other than Hall of Fame golfer Phil Mickelson. The court determined that Mickelson had made about $1 million off the deal, which he said he gave back to Walters to cover gambling debts. Mickelson has not had any more blowback from this after agreeing to pay back the money he made on the deal; that is a drop in the bucket for a player of Mickelson’s stature.
With the ruling today, Walters will have to relinquish control of his current company holdings; he has parlayed his sports winnings into several business ventures such as car dealerships and golf courses, but it seems as though he won’t spend more than a year of the sentence in jail. All in all, with $43 million confirmed in profits from the dealings, a penalty of $10 million doesn’t seem all that bad.
However, at least for the next while, sportsbooks around the world may breathe a sigh of relief as one of their biggest foes was taken down by his own greed. More details will follow on the sentence, how long the 71-year-old Walters will spend behind bars, and what effect this will have on the profitability of Vegas sportsbooks this season.
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