Walters, whose risky bets earned him the title of the "most unsafe sports bettor in Nevada", was convicted of insider trading charges Friday, a federal prosecutor in Manhattan said.
"To say I was surprised would be the understatement of my life", Walters told reporters after court. The Las Vegas gambler linked to golfer Phil Michelson said outside court that he "just lost the biggest bet of my life".
"Today, Billy Walters lost his bet that he could cheat the securities markets and get away with it scot-free", acting U.S. Attorney Joon Kim said in a statement. "Frankly I'm in total shock".
Mickelson wasn't charged. But the Securities and Exchange Commission accused him in a civil lawsuit of making almost $1 million trading Dean Foods stock. Sentencing was set for July.
Walters is charged with earning $40 million by making profits and avoiding losses through tips from Davis.
Walters, meanwhile, maintained he simply used the same research skills and insightful thinking that made him an ace sports gambler when he traded shares of Dean Foods, a leading dairy company.
His lawyer, Barry Berke, promised an appeal.
Walters, 70, has built a sprawling business of auto dealerships, vehicle rental agencies and golf courses worth hundreds of millions of dollars.
In her closing argument to the jury, prosecutor Brooke Cucinella called Davis the gambler's "man on the inside" and argued that Walters's use of disposable phones was proof he was aware he was breaking the law.
Davis testified under a cooperation deal that he met Walters while golfing. Davis pleaded guilty to federal charges and is cooperating in the hopes he'll be sentenced leniently. Davis used the money to pay off a casino debt and for prostitutes, Berke said.
Asked what evidence led to the guilty verdict, one juror replied, "Everything that was in front of us".
William "Billy" Walters leaves Manhattan federal court in New York, Friday, April 7, 2017, after he was convicted of insider trading charges. The Securities and Exchange Commission cited Mickelson in a lawsuit and Mickelson agreed to repay it.