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New York Attorney General Takes on Daily Fantasy Sports Gambling

Recently, New York Attorney General Eric Schneiderman has decided to take on certain fantasy sports gambling websites, particularly ones that advertise daily games such as DraftKings and FanDuel. As he wrote in an op-ed piece for the New York Daily News, “my job is to enforce the law, without fear or favor. For more than a century, New York laws have banned gambling. The few narrow exceptions that exist — which do not include sports betting — all come with strong regulation and oversight to ensure fairness and protect New Yorkers from fraud.”

A.G. Schneiderman has issued cease and desist letters to stop the flow of money into these websites. Schneiderman contends that daily fantasy sports betting is governed by chance to a degree that makes it illegal under New York and federal laws.

What Laws Regulate the Sports Betting Industry?

In 1996, Congress passed the Professional and Amateur Sports Protection Act (PASPA) to restrict sports gambling to certain states. These states currently include Nevada, Delaware, Oregon, and Montana—and only Nevada hosts serious sports betting. Under PASPA, no government entity can license or authorize any lottery, sweepstakes, or other betting scheme based on competitive games involving amateur or professional athletes. Attorney Generals and sports organizations can use PASPA to remedy violations of the law.   Fantasy Sports

More recently, in 2006, the Unlawful Internet Gambling Enforcement Act was passed to regulate U.S. banks and other financial institutions. Those institutions are no longer allowed to be involved in online gambling transactions. The law also affected online blackjack, poker, and other similar games. This means that, in general, many of the bets placed and collected online are processed through offshore banks.

State gambling laws may also pertain to fantasy sports betting. As Law Professor Marc Edelman explains, “not every “game for money” or “bet on an uncertain outcome” is defined as illegal gambling” by states. Rather, most states maintain explicit carve-outs that permit certain activities, such as stock trading, that otherwise would seemingly fall under the category of gambling.” This means that there are some forms of fantasy sports competition that fall short of “gambling” under some states’ laws.

Fantasy Sports Betting Today

Fantasy sports betting existed well before the internet was part of our daily lives. However, until recently, fantasy sports games have been played over an entire season. These games have an entry fee to be part of a league, and an annual prize that is awarded to the manager who most skillfully crafts a winning team. In these respects, they are not much different than any other contest. These fantasy games involve commissioners who regulate play, treasurers who handle the financial stakes, and strategic advising companies that help players decide which athletes to choose. Fantasy sports betters can also be insured to cover the losses if one of the athletes on their “team” is injured during the season.

Daily games, however, are much more akin to other forms of gambling. They are short-term and sometimes risky bets based largely on chance and not on talent. In addition, as with all gambling, the house always takes a cut of the winnings. These games may lure gambling addicts and others who care more about the thrill of the bet than sports.

It is estimated by the American Gaming Association that in 2012, only 1% of sports betting ($2.88 billion) happened in Nevada, where it was completely legal. The other 99% of the betting occurs within other states, involves millions of Americans, and is sometimes facilitated by offshore banking. While some betting involves traditional fantasy sports league play or tournaments like March Madness, daily and weekly online fantasy sports betting is becoming increasingly popular.

Should PAPSA and other laws put a stop to fantasy sports betting?

According to Edelman, many fantasy leagues have support from the athletic organizations that they revolve around. Short-term games, however, are more about betting and have usually had less official support. However, the Guardian reported in May that DraftKings has now been declared the “official daily fantasy partner” of Major League Baseball… and that the National Basketball Association now has an equity stake in FanDuel. Despite this trend, in a city like New York where websites like these could stand to make millions of dollars from illegal gambling activities (and from gambling addicts), it may be time to lay down the law.

Repeat Head Injuries Create Legal Issues in Sports

Head Injuries and the NFL

During his NFL career from 1958-1972, Wayne Walker received over 20 concussions in 200 games, getting knocked out twice. On October 29, he announced that he suffers from Parkinson’s disease, a degenerative nerve disorder. While Parkinson’s is normally genetic, it can also be triggered by other factors. Walker said in the interview that once he completely lost consciousness but returned to the field in the same game.

In May 2015, Adrian Robinson, a former NFL player, committed suicide. It was confirmed after his death that he had chronic traumatic encephalopathy (CTE), one of the more common diagnoses for football players. Some effects of CTE are commonly referred to as being “punch drunk.” There are many symptoms of CTE, which can include depression, memory loss, and aggression.   Head Injury

In addition to CTE, the risk for Parkinson’s, ALS, Alzheimer’s, and other neurological diseases is much higher for NFL players. The brains of many NFL players have been studied after death, and at least 70 have showed signs of disease. The Concussion Legacy Foundation at Boston University found evidence of CTE in 88 out of 92 NFL players studied so far. Perhaps it should come as no surprise that this March, Chris Borland retired from the San Francisco 49ers at age 24. He felt that as a professional linebacker, he could avoid the risk of repeat brain trauma and the progressive neurological diseases that often follow.

Head Injury Lawsuits

There are often limits to how liable others are for sports injuries. Athletes often “assume the risk” or consent to anything that happens while playing a rough-and-tumble sport. However, there may be legal recourse for equipment failures, play that violates the rules of the game, or, as in the case of the NFL, leagues that misinform players about the risks involved.

Earlier this year, a judge approved a settlement of at least $900 million dollars a suit filed by retired NFL players and their families. The lawsuit claimed that the NFL knew of the dangers of traumatic head injuries and did not disclose them to players. The proceeds of the suit will allow for players or their heirs to receive up to $5 million for a diagnosis of ALS, $4 million for diagnosis of CTE, and up to $3.5 million for Parkinson’s and Alzheimer’s. However, the amount of money is currently being challenged as insufficient to cover all of the potential injuries caused by the game.

Riddell, a helmet manufacturer, has also been implicated in several lawsuits. Retired NFL players have attempted to sue the company, and the NFL declared that Riddell would no longer make their “official” helmet in 2013. Families of high school athletes in Colorado, California, and now New Jersey have also brought suit against Riddell for injuries on the field.

What is the Best Way Forward for Football Players?

Now that society is becoming aware of the dangers of repetitive head injuries, many steps are being taken to make football safer. The NFL is taking action to try to reduce head injuries on the field, and has donated $30 million to the National Institute of Health (NIH) to study the effects of concussion. At all levels of the game, coaches and players are paying more attention to safety. Yet, as one NIH flyer states, “every year, between 1.6 million and 3.8 million sports-related concussions are estimated in the United States, particularly among young athletes.”

The NIH advises coaches, players, and their families that they should learn to recognize the signs of concussion: all concussions are serious, and most occur without loss of consciousness. Not all concussions are caused by blows to the head, but can also be caused by “a blow to the body that causes the head and brain to move rapidly back and forth.” If a player seems drowsy, slurs speech, has a headache, has memory problems, or has any other signs of concussion, they should be taken out of play and given medical attention. Importantly, they should also not be allowed to play again until a doctor says that they can.

Personal injury and product liability lawsuits will also continue to hold organizations, manufacturers, and even individual coaches accountable for failing to protect players in certain cases. If you or someone you know has suffered from football-related head injuries, you may wish to contact an attorney to see if you have any legal recourse.

Red Team vs. Blue Team: Minimum Wage

Today’s article is a special two for one: two of our writers debate the merits of raising the minimum wage. Who do you think makes the most convincing argument?

Should the Federal Minimum Wage Rise?

by Alexis Watts

Recently, presidential candidates have discussed raising the Federal Minimum Wage, which is currently set at $7.25 an hour. Bernie Sanders advocates a minimum wage of $15 an hour, which is more than double the figure. Hillary Clinton argues that wages should gradually be raised to $12 an hour. Conservative candidates do not generally favor such high wage hikes, and this may be an issue for debate in the 2016 election.

The US currently has one of the lowest minimum wages of any high-income country. It has had a higher minimum wage in the past. In 1968, the minimum wage was $1.60, the equivalent of $10.34 an hour in current dollars. The US has also had lower minimum wages; in 1938, for example, the minimum wage was 25 cents, the equivalent of only $3.98 today.

So, should the national minimum wage be raised?

What is the Federal Minimum Wage, and who benefits from it?

The Federal Minimum Wage was originally part of the Fair Labor Standards Act (FLSA), passed in 1937. This act also regulated how many hours employees could work without receiving overtime pay. The federal government is authorized to set a minimum wage and make hours regulations because the Constitution gives it broad power to regulate many aspects of commerce in the United States. FLSA benefits many low-wage workers who are paid by the hour. While some characterize these workers as teenagers with no real responsibilities, statistics show that 89% of those who would benefit from a national raise are workers over the age of 20.  Minimum Wage

There are some exceptions to FLSA. Employees who receive tips or work on commission (such as waiters) receive a lower base wage, but employers must make up the difference if their total pay falls below a certain hourly minimum. Domestic and agricultural workers do not benefit from these minimum wage protections. One notable criticism of FLSA is that it leaves out these important workers, who are often from minority groups.

What about State and Local Minimum Wages?

29 states have raised their minimum wage to above $7.25 an hour. Some cities have raised their wages even higher. Berkeley, CA is now contemplating a minimum of $19 an hour. Seattle has already raised its minimum wage to $15 an hour. These high local wages may reflect unique economic conditions. In both the Bay Area and Seattle, the price of rent has been driven higher by an influx of highly paid technology industry employees. However, these cities still need hourly workers like clerks an baristas; they are often the backbone of a rich local cultural scene.

The Minimum Wage Must Properly Reflect Current Economic Needs

In the United States, the minimum wage makes it difficult to afford shelter and other essentials. Purchasing power varies widely from place to place; a dollar buys more housing, food, and other essentials in many rural areas than it would in a major city. However, the National Low-Income Housing Coalition recently issued a study showing that these regional differences still do not allow any minimum wage workers much breathing room. Most financial planners suggest that no more than 30% of a worker’s income go to housing. However, there is no state in which average minimum-wage workers can secure housing using only that portion of their income. An average two-bedroom apartment for a small family would now require a full-time wage of $12.65 an hour in Arkansas and a whopping $28.04 in Washington, D.C. Many low-wage workers have little ability to save or to buy non-essential goods.

While some argue that the minimum wage causes inflation, the reality is that inflation also devalues the minimum wage. The minimum wage does not automatically increase as the price of basic food or housing rises, leaving many individuals who provide important services without the means to earn a living.

If the Minimum Wage is Raised Gradually, it Will Not Increase Unemployment

When the minimum wage is raised, it redistributes some of the country’s entire income from the top (where it is often saved or invested) to the bottom (where it is often spent). Households in the bottom 20% make their income mostly through wages and employment-based tax incentives, and they experience an increase in discretionary income when wages rise. The money these households spend flows into the economy and may allow employers to create new jobs, rather than decrease their staff.

A Department of Labor survey recently showed that 3 out of 5 small business owners support a gradual increase in the minimum wage. This type of an increase would make it possible for business to operate without laying off employees. Department of Labor data also shows that there is no negative effect on unemployment when the minimum wage is raised.

Experiments like the minimum wage hike in Seattle may help to clarify what happens to a local economy when much higher wages are introduced. If the wage increase creates jobs and helps to eliminate poverty, it may prove detractors wrong.


Arguments Against Raising the Federal Minimum Wage

by Sarah K. Lee

Is raising the federal minimum wage all it’s cracked up to be? Although recent presidential candidates have taken a stance for raising the minimum wage in support of more sustainable wages for low-income earners, there are a number of economists who widely disagree. Many economists claim that raising the minimum wage would in fact be detrimental to the economy and the low-income earners such advocates seek to protect. Economists predict raising the minimum wage would result in a steep decline in minimum wage jobs, higher consumer prices for goods, and less entry-level positions for less experienced workers—all of which would negatively impact low-income communities the most.

Increased Unemployment

A number of studies have shown raising the minimum wage results in a loss of jobs due to employers being unable to hire as many minimum wage employees as they would have been able to at lower wages. The Congressional Budget Office predicts a rise in minimum wage from $7.25 to $10.10 would result in a loss of 500,000 jobs across the nation. Supporting that prediction, a study showed the incremental minimum wage increases between 2006 and 2012 resulted in an overall decrease in the national employment-population ratio by 0.7 percent, equating to a loss of

conceptual sign with words minimum wage increase  ahead over blue sky

approximately 1.4 million jobs. Economists argue inflating the minimum wage would actually do more harm than help to low-income communities, those who are purportedly meant to benefit from such a raise.

Higher Consumer Prices

Economists argue hiking the minimum wage could drive businesses to charge more for goods in order to make up for the additional labor costs. This would be particularly detrimental in low-cost, low-wage states where such an increase in prices would affect poor consumers the most. Again, economists argue such an outcome would negatively impact the very target group a raise in the minimum wage seeks to help.

Fewer Positions for Entry-Level Workers

A higher minimum wage could also result in more experienced workers feeling less compelled to move on to higher level positions because the pay at a minimum wage job is adequate. Such a scenario would be bad for less experienced workers, shutting them out from potential entry-level positions. These less experienced workers are primarily made up of teenagers, immigrants, and low-income populations—many who lack the skills to obtain any other type of employment and rely on minimum wage positions to help escalate them to higher paying positions. Economists argue a higher minimum wage could throw off the balance of employment dynamics.

Alternative to Raising the Minimum Wage? Raising the Earned Income Tax Credit (EITC)

Many who oppose raising the minimum wage are not against it for malicious reasons, but rather believe low-income populations can be aided through alternative means without disrupting employment rates. One of the most popular proposals has been to raise the Federal Earned Income Tax Credit (EITC). The EITC is a refundable tax credit calculated based on a recipient’s income and number of children. By increasing the EITC, more money would be afforded to those who are not making enough on wages alone. Advocates of this proposal maintain this change would provide real assistance to those who truly need it, the low-income population, and would not adversely affect employment rates or consumer prices.

Update on Proposed Fines for California Drought Water Usage

California Lawmakers Crack Down in the Face of a Monstrous Drought

For the past four years, the state of California has suffered through one of the worst droughts in history. A historic and unprecedented lack of rain has created the need for some very immediate and systemic changes regarding water usage.

As Governor Brown and state officials urge California residents to cut back, local county and city governments have begun passing ordinances that restrict water usage. These restrictions often ban residents from washing their cars and doing other activities involving water. Some neighborhoods are prohibited from watering their lawns while other neighborhoods have placed residents on a schedule, permitting sprinkler usage on only one day a week.  Droughtful

Thankfully, these restrictions, as well as awareness of the issue, have led to an impressive 35% cut in California’s water usage.

Celebrities Among the Most Egregious Offenders

Many California residents have allowed their lawns to go brown in order to conserve water while others have transformed their yards using zeroscaping. Unfortunately, many of Hollywood’s elite have eschewed the water restrictions and have continued to operate their sprinklers, enjoying lush, rolling lawns while their surrounding neighbors have dead grass.

Each individual water district is responsible for policing its residents. As such, uniform policies have failed to develop. For instance, Las Virgenes Municipal Water District is patrolling wealthy Calabasas neighborhoods for violators and has issued many violation letters to famous residents. Some of these individuals were fined.

However, it appears many water districts are not being vigilant about the issue. In Los Angeles, only 9 people were fined despite thousands of warning letters for violations. In Beverly Hills, where some of the more outrageous violations have occurred (and where the largest yards exist), no fines have been levied yet.

California Spring Usage Limited During Drought

California is home to many natural springs. Water bottle companies like Nestle and Sugar Pine contract with the California government to pump water from the springs for bottling and resale. In January of 2014, the governor announced a state of emergency. In response, the California Water Resources Control Board ordered Sugar Pine Spring Water Company to stop diverting water from the Sierra Nevada spring to its bottling facility. Despite this order and numerous warnings, Sugar Pine continued to divert water and was recently slapped with a whopping $225,000 fine.

Individual Accountability for Corporate Crime?

On September 9, the Department of Justice (DOJ) released an “Individual Accountability for Corporate Wrongdoing” memorandum, also known as the “Yates Memo.” It outlined several strategies to seek accountability from the individuals who perpetrated corporate wrongdoing:

  1. Corporations may only receive credit or benefits for cooperation in criminal or civil matters if they disclose all relevant facts about the individuals involved.
  2. Investigations should focus on individuals from the beginning.
  3. There should be routine communication between civil and criminal attorneys handling corporate investigations.
  4. Ordinarily, the DOJ should not release individuals from civil or criminal liability as part of a settlement with a corporation.
  5. Attorneys should not resolve corporate matters without a plan to resolve individual cases.
  6. Civil attorneys should bring suit against individuals involved regardless of their ability to pay.

Criticism of Previous DOJ Policies

After the 2008 financial crisis, the DOJ and other government agencies took steps to increase oversight and to prosecute financial wrongdoers. In 2009, the Financial Fraud Enforcement Task Force was formed to address mortgage scams, predatory lending, and other types of fraud. The DOJ prosecuted many white collar crime and mortgage fraud cases, but few individuals were charged and even fewer served time. Only one executive — Kareem Serageldin of Credit Suisse — went to jail for manipulating bond prices leading up to the 2008 crash. Many people who were allegedly involved in financial transactions that led to market failure have gone unpunished. White Collar

Corporations and executives have been protected to some extent by deferred prosecution (DPC) and non-prosecution agreements (NPC), which are still common. These agreements allow corporations to avoid prosecution by promising to pay penalties and to reform their internal policies. Many major financial institutions paid out multi-billion dollar settlements after DOJ investigations began and have so far avoided further prosecution. In some cases, these settlements actually led to bonuses for the corporate executives involved.

The DOJ has also been criticized for reacting too slowly to the crisis. In 2013, the DOJ lost the ability to file many types of civil suits related to the financial crisis because the statute of limitations required action within 5 years. Before leaving office, Attorney General Eric Holder encouraged federal attorneys to build potential criminal cases against individuals and corporations before it was too late to proceed.

Prosecuting Individuals for Financial Market Crimes

The Yates Memorandum encourages a renewed focus on individual wrongdoing. The new policy incentivizes full cooperation from corporations in investigations that “name names” and do not shield individuals from further scrutiny. It disallows further agreements between corporations and the DOJ that contain conditions which shield individuals from prosecution or lawsuits for their involvement in wrongdoing. Attorneys must also make a greater effort to resolve individual cases as well as the corresponding corporate cases in a timely manner through proper planning. This may be a response to the harsh criticism that the DOJ received after they could no longer bring many civil suits based on the financial crisis.

The memo’s emphasis on civil suits against guilty individuals who cannot afford to pay settlements seems misplaced, though it may bring accountability. Critics say that the real problem is “untouchable” corporate executives who can more than afford to pay up in the wake of a civil suit. Bringing suit against more low-level employees will not solve this problem.

Communication between Civil and Criminal Attorneys

Parallel civil and criminal investigations have already been employed in many environmental and health care cases. This strategy was also a goal of the Interagency Financial Fraud Task Force. This type of investigation has many benefits. Civil cases can be won using a preponderance of the evidence; thus they do not have to be proven beyond a reasonable doubt like their criminal counterparts. Some materials may be discovered in civil cases but not in criminal ones, leading to more information. Previous federal cases have brought concerns about the propriety of parallel investigations, but courts have allowed them to continue. Parallel corporate investigations may be beneficial, but must also be fair and efficient.

Future DOJ prosecutions and behavior change within corporate offices will determine if the strategies within the memo effectively deter corporate crime.