Eighteen people, including nine players and the Karabatic brothers' partners, were detained on Sunday, Montpellier prosecutor Brice Robin told a news conference.
Along with Nikola Karabatic, who led France to back-to-back Olympic titles in 2008 and this year, another London gold winner, Samuel Honrubia, was arrested along with internationals including Slovenian Vid Kavticnik, Serbian Mladen Bojinovic and Tunisian Wissem Hmam.
"There are very high suspicions of illegal betting," Robin said, adding that Luka Karabatic's partner Jenny Priez had admitted placing bets for the player while in custody.
"As for Jenny Priez, she has recognised having bet with money given by Mr Luka Karabatic. She also told how much he gave her and how much he earned from his bet," he said.
According to the prosecutor, a total of 87,880 euros were placed in bet over a first division game between Montpellier and Cesson-Sevigne last May, which is 40 times the usual amount for this kind of match.
Most of the bets were placed around the same time of day and 99.94 per cent were placed on struggling Cesson-Sevigne to lead at halftime, he added.
The prosecutor also said that investigators had clearly linked some regular gamblers to the players suspected.
He added that the investigation was focused on the players and their relatives, with both clubs' chairmen and coaches having been cleared of any suspicion of wrongdoing.
All the players involved will be brought to a judge by Tuesday for indictment over "sporting corruption" and fraud, the prosecutor said. If found guilty, they risk a prison sentence of up to five years and a 75,000 euros fine.
No player has admitted placing bets but the Karabatic brothers' lawyer said they would do but would keep denying match-fixing.
"They will admit betting... They placed bets," lawyer Eric Dupont-Moretti told French radio RTL on Monday when asked if the brothers and other Montpellier players involved would admit to betting on a French league game.
"But the match-fixing case has to be proven. It is up to the prosecutor to provide evidence. And I say that these men strongly deny having fixed this game," he added. "There is no criminal case here."
- Nikola Karabatic