Famed golfer Phil Mickelson once owed almost $2 million in gambling debts to well-known Vegas businessman and sports bettor Billy Walters, and paid him back after profiting from an insider stock tip Walters gave him, according to what federal prosecutors told a court in Walters’ trial Thursday. Walters is facing multiple counts of securities fraud, and while Mickelson is not charged in the case, he has agreed to pay back the proceeds he made from the tip with interest. This case and others may spark questions about if the PGA Tour has investigated Mickelson’s gambling enough, though. ESPN’s David Purdum has more on the Walters case:
According to transcripts of Thursday’s proceedings, the prosecution told the court that an independent business management firm, if called to testify, would say Mickelson was a client and that “records show that in July 2012 Mickelson owed a debt to William T. Walters, the defendant, related to sports gambling.” The prosecution added that on Sept. 19, 2012, Mickelson “transferred $1,950,000” to Walters.
…The government alleges that Walters passed inside information he received from a former executive at a dairy production company on to Mickelson before the golfer purchased about 200,000 shares of Dean Foods through transactions on back-to-back days in late July 2012. According to prosecutors, Mickelson sold the shares just more than a week later for a $930,000 profit.
…On Thursday, according to court transcripts, FBI special agent Paul F. Roberts testified that Mickelson and Walters were in communication in the days leading up to both men purchasing shares of Dean Foods, a stock Walters has owned for years. Roberts testified that Mickelson had not owned any stock in Dean Foods in recent years. Walters’ defense has asserted that the trades were based on publicly available information regarding a spinoff of the company, not any information from Thomas Davis, a former executive for Dean Foods and associate of Walters who is now a cooperating witness for the government.
As mentioned above, Mickelson has not been charged in the case, and it’s unlikely he’ll appear at trial. Walters’ lawyers included him on a defense witness list, but then told the judge last week Mickelson’s counsel said he would invoke his Fifth Amendment right against self-incrimination if called. He has also agreed to pay back the proceeds and interest. But the discussion of Mickelson owing Walters almost $2 million in gambling debts is certainly interesting, and that may raise further questions going forward.
Mickelson has long been known as a gambler, talking about Tuesday practice-round money matches on podcasts, having the likes of Paul Azinger tell stories about money games, making a bet with a fan at Augusta and even winning $1,200 on a bet between scenes while filming Tin Cup. Bets between golfers are mostly funny stories, but these massive bets with renowned gamblers are on a different scale. Despite that, though, they don’t seem to be drawing much concern from PGA Tour executives.
Tour executives have sometimes called Mickelson’s small on-course bets “technical violations,” but there hasn’t been much action taken against him. That’s remained true even with FBI agents investigating his connections in the Walters case and his gambling also being linked to a different case, a money-laundering one involving Gregory Silveira. As Steve Elling wrote at Bleacher Report last year when the Silveira news came out, Mickelson’s actions seem to violate Tour policies, but haven’t led to discipline:
That’s the most alarming part of the issue. The tour player handbook forbids players from associating with or having “dealings with persons whose activities, including gambling, might reflect adversely upon the integrity of the game of golf.”
…To recap: Mickelson used tainted information to make a stock purchase that raised the ire of the feds, made a small fortune, and was forced to repay the proceedings. He owed money to a professional gambler, an act which has been the foundation of more than a few points-shaving scandals over the years.
…It’s all disturbing. How much did Lefty lose, and under what circumstances? How could a player with more than $50 million in annual income become beholden to a sports gambler? Did he wager on tournaments, which is also explicitly forbidden under tour rules? How can the tour let it all slide, with not so much as a public rebuke?
Mickelson betting on other sports isn’t necessarily a huge problem, but the sums he’s owing to big-time gamblers might be more concerning. And there hasn’t been much discussion of if Mickelson has bet on golf for this kind of money or not. The Walters case doesn’t seem likely to impact Mickelson directly too much, but its revelations about the scale of his gambling raise some further questions. Many may be wondering if the PGA Tour has any answers.