During a press conference, NBA commissioner David Stern has addressed the gambling scandal that has shaken the professional basketball and puts a shadow of doubt over the credibility of every referee.

Tim Donaghy, a 40 year old referee is under FBI’s investigation for allegations that he bet on games during the last two seasons.

According to Stern, he received a telephone call from the FBI on June 20 of this year, indicating it wanted to talk to him about a "referee alleged to be gambling on games."

The NBA conducted a background check of Donaghy's personal life and allegations of gambling in Atlantic City, New Jersey, but found nothing out of place, including any suspicious financial records.

On July 9, Tim Donaghy resigned and is expected to turn himself over to authorities later this week, and his lawyer is considering a plea agreement.

"We would have likely have terminated him earlier," Stern said, "but we came to the belief that termination by us might hamper the on-going investigation, even though we knew he would be terminated."

During the news conference held in New York, NBA commissioner Stern used strong words to describe the incident. Stern said he feels "betrayed" by this "rogue isolated criminal".

"I also understand that he is accused of providing information to others for the purpose of allowing them to profit from betting on NBA games. I think we have a case of a rogue isolated criminal that violated our rules and committed criminal conduct." Stern said.

Stern described the situation as a nightmare. "My reaction is I can't believe it's happening to us," he said. "I feel betrayed by what happened. It's the worst situation I've every experienced as either a fan of the NBA, a lawyer for the NBA or commissioner of the NBA."

The NBA commissioner also said he was surprised to find out that Donaghy's alleged gambling activity slipped through the NBA security.

"Referees may not either gamble on our games or provide information to anyone about those games," he said. "We have a rule that says you're subject to discipline which would most likely be expulsion from the league and the job."

Donaghy has not been yet charged with a crime, but according to the media FBI plans to make a number of arrests in relation to the case.