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You know Mickelson and Icahn. Here's Billy Walters

Who is Billy Walters?

He's considered the best at what he does, yet few understand how he does it. A high-profile bettor with seemingly few close friends.

William "Billy" Walters is a Kentucky-born gambler who moved to Vegas in the 1980s and built a sports betting empire that one rival says has earned him "tens of millions, if not hundreds of millions, of dollars."

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Now Walters is being looked at, along with Carl Icahn and golfer Phil Mickelson, in a reported federal investigation of insider trading in shares of Clorox.

"I am innocent of doing anything wrong. It's that simple," Walters told CNBC. "Those who know me best know that it is preposterous to think that I would involve myself in insider trading."

The U.S. Federal Bureau of Investigation and the Securities and Exchange Commission are investigating possible insider trading involving Las Vegas developer and gambler Bill Walters, seen here, investor Carl Icahn, and golfer Phil Mickelson.
Source: Review-Journal File Photo

Walters added that news of an investigation surprised him: "I had no knowledge." When asked if he'd been contacted by the FBI, Walters replied, "Absolutely not."

He would not comment at the moment on whether he had ever invested in Clorox.

Walters is a legend in Las Vegas sports betting circles.

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"He's super-brilliant," said Wayne Allyn Root, who made his own fortune predicting odds before becoming a major political force in Libertarian politics. "If he was a bad guy, I'd know about it...I've never heard a bad word about him."

"His money moves lines," said Paul Bessire of PredictionMachine.com, which handicaps sporting events. "He's unanimously considered at the top of his profession, yet for someone with such a high profile, few people know much about him."

Lately, however, it's gotten harder for Walters to place bets in Vegas. In an interview last fall, he complained that consolidation in sports gambling operations in Vegas had led to less competition, worse odds, and fewer places willing to accept his big bets. "It's a joke. A sad joke."

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"He's an action junkie looking for value," Bessire said of Walters. "And he walks the line."

Bessire said that Vegas sports book operations watch Walters like a hawk, even if they're not sure where all his betting money comes from. If Walters is in trouble with the feds, Bessire is not surprised that it's outside the world of Vegas. "No legal market is better policed and better understood by those in it than sports betting," he said.

Walters' love of action extends to the golf course. He owns three courses in Las Vegas, and he often bets thousands of dollars while playing, sometimes on every hole. In a profile on The Golf Channel, Walters spoke of some people losing a million dollars in one round.

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The Baltimore Sun, the Dallas Morning News and others have reported on Mickelson's history with wagering, with the golfer having won big in 2001 betting that the Baltimore Ravens would win the Super Bowl and the Arizona Diamondbacks would win the World Series.

High-profile wins by celebrities such as Mickelson encourage other people to give sports betting a shot, despite the odds, said Paul Bessire. "He's the kind of person, like Floyd Mayweather—I'm glad they exist—people who throw a lot of money around" even if they don't always make good bets.

'Swindled' by Wall Street

Like Walters, Mickelson has denied breaking the law. It's not the first time the feds have wandered onto the golf course in an investigation. Last year, KPMG senior partner Scott London was arrested for passing inside tips on Herbalife and Skechers to a friend while golfing. The FBI caught London red-handed in a photograph accepting cash, and when confronted with the evidence, he admitted everything.

No smoking gun has emerged in the Walters-Icahn-Mickelson investigation, and none may. Walters told CNBC that insider trading charges are "extremely hard to prove if they're not true."

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In a rare interview with "60 Minutes" three years ago, Walters implied that Vegas was more honest than Wall Street. "I bought a lot of Enron stock once and I got swindled. I bought a lot of WorldCom stock, got swindled, bought a lot of Tyco stock, got swindled."

On Monday, Walters told CNBC, "I have studied and invested in the stock market for many years, and no one said anything when I lose money or when I am not successful, and certainly that has happened, like it has to many of us. But the bottom line here is, as I stated before, I'm not involved in any insider trading. I've never been involved in any insider trading."