California’s Illegal Betting Market Faces Renewed Federal Debates

Federal prosecutors intensified their crackdown on California’s underground sports betting economy this week, as another prominent bookmaker received prison time for operating an illegal gambling and money-laundering enterprise.

Christopher Scott King, a Southern California resident accused of generating more than $13 million in unreported income, was sentenced Tuesday to 21 months in prison — nearly double the term imposed on Matt Bowyer, the bookmaker tied to Shohei Ohtani’s former interpreter, Ippei Mizuhara. The ruling, delivered in a Los Angeles federal courtroom, underscores the Justice Department’s sustained effort to dismantle one of the largest unregulated sports betting networks in the nation.

 

• Christopher Scott King sentenced to 21 months for illegal gambling, tax evasion, and money laundering, with $10 million forfeited and $3.8 million in restitution paid.

• King and Matt Bowyer were among the largest operators in California’s unregulated sports betting market, highlighting the state’s ongoing underground iGaming activity.

• Federal crackdown underscores regulatory gaps in California, where stalled legalization leaves a lucrative illegal market largely unchecked.

 

A Growing Federal Focus

King’s conviction follows a series of high-profile prosecutions targeting Southern California’s shadow betting industry, which continues to thrive despite the state’s prohibition on most forms of online and retail sports wagering. While 38 states and Washington, D.C. have legalized sports betting since the 2018 Supreme Court ruling that overturned the federal ban, California remains a notable outlier.

The absence of a legal iGaming framework has fueled a sprawling illicit market estimated to handle billions in wagers annually. Federal authorities view prosecutions like King’s as a necessary response to the rise of offshore betting operations that draw customers from California without regulatory oversight or tax compliance.

“California’s gray market for sports betting remains one of the largest in the country,” said a federal law enforcement official familiar with the investigation. “When legitimate avenues don’t exist, illegal ones flourish.”

 

Details of the King Case

Prosecutors said King operated an extensive bookmaking business from at least 2018 to 2022, accepting bets that were ultimately funneled through Costa Rica-based servers. Over that period, he filed false tax returns, reporting just $1.6 million in income while concealing millions more.

In April, King pleaded guilty to operating an illegal gambling business, tax evasion, and money laundering. He agreed to forfeit $10 million and pay $3.8 million in restitution to the federal government — amounts that prosecutors said have already been settled.

Court filings detailed how King laundered gambling proceeds through luxury real estate and gold transactions. Prosecutors said he used betting profits to buy and renovate multimillion-dollar properties in Pacific Palisades, Santa Monica, and Palm Desert. The U.S. Attorney’s Office accused King of cycling illicit funds through property improvements and resale profits, a classic money-laundering tactic. King, a self-described recovering gambling addict, expressed remorse during sentencing and received credit for cooperating with investigators. He is scheduled to surrender by January 6.

The case echoes the earlier conviction of Bowyer, whose operation accepted hundreds of millions in bets from Mizuhara, Ohtani’s former interpreter. While Bowyer’s sentencing drew national headlines due to the Major League Baseball connection, King’s case carried broader implications for the structural realities of California’s illegal betting landscape.

Bowyer reportedly maintained some of the same clients as King, though it remains unclear whether professional athletes bet through King’s operation. Both funneled wagers to offshore platforms to avoid detection, a pattern federal officials have linked to wider organized gambling networks in California and Nevada.

 

California’s gray market for sports betting remains one of the largest in the country. When legitimate avenues don’t exist, illegal ones flourish.

 

Broader iGaming Context

The prosecutions arrive amid renewed debate over the future of legalized iGaming and sports wagering in California. Two competing 2022 ballot measures — one backed by tribal gaming interests and another by major online operators — failed after heavy opposition spending and voter confusion.

Since then, lawmakers have shown little appetite to revisit the issue, leaving a regulatory vacuum that experts say has only strengthened illicit operators. “Every time a legal framework stalls, unregulated bookies gain market share,” said Chris Grove, a gaming industry analyst. “Cases like King’s and Bowyer’s show how entrenched the illegal market is — and how profitable it remains without competition from legal alternatives.”

As federal prosecutors pursue remaining defendants, including poker player Damien Leforbes and bookmaker Wayne Nix, the Justice Department’s actions may increase pressure on California legislators to reconsider legalization. For now, the state’s residents — including professional gamblers and casual bettors — continue to operate in a murky legal environment where federal indictments, not state regulation, define the limits of play.