Billups, a former Detroit Pistons star and NBA Hall of Famer, was arrested in connection with rigged illegal poker games tied to Mafia crime families.
He was targeted along with Miami Heat guard Terry Rozier in an FBI-led investigation into the scam that allegedly saw players cheated with the use of sophisticated methods, including an X-ray table and barcoded card decks.
Dozens of other suspects were arrested as part of the FBI probe.
Rozier and Billups were placed on indefinite leave by the NBA after being arrested in the gambling investigation.
Rozier and a former NBA player and assistant coach, Damon Jones, were among six people arrested in a separate sports betting case.
Billups was indicted on charges of conspiracy to commit wire fraud and money laundering, to which he pleaded not guilty Monday, the Eastern District of New York prosecutors' office confirmed to AFP.
Billups was released on bond after initially appearing in federal court in Portland, Oregon, and was represented by attorney Marc Mukasey at a brief hearing in a Brooklyn court on Monday.
Billups will now sign a $5 million bond in the Eastern District of New York for his pre-trial release, prosecutors added.
Prosecutors say Billups's celebrity helped lure players to high-stakes games that used "high-tech cheating technology."
That tech included shuffling machines that could read cards, hidden cameras and barcoded decks.
NBA commissioner Adam Silver said last month he was "deeply disturbed" by the far-ranging FBI probe into illegal gambling.
"My initial reaction was I was deeply disturbed," Silver said in an interview with Amazon Prime.
"There's nothing more important for the league and its fans than the integrity of the competition."
Silver expressed regret that the allegations had taken attention away from the start of the season.
"I apologise to our fans that we are all dealing with, now, this situation," Silver said.