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Week in Review September 28- October 9, 2015

By Zak Kurtz

New York Attorney General Launches Investigation into DraftKings and FanDuel

Last weekend, DraftKings employee Ethan Haskell finished second in a million-dollar fantasy contest on rival site FanDuel, and won $350,000. The previous day, Haskell admittedly published internal data revealing the percentage of rosters on which specific players were included. DraftKings stated that Haskell did not have access to this internal data prior to his locking in the winning lineup. However, the situation in general has caused uproar in the daily fantasy sports community. Despite winning a sizeable amount, the mere timing of the two events could not have been worse for Haskell, as DraftKings and FanDuel were forced to conduct internal investigations looking into the matter, among harsh industry criticism.

Both internal investigations found no wrongdoing on Haskell's part at the time. However, the companies decided to change their current policies this week and permanently forbid employees from participating on any other fantasy sites for pay. Both companies had always had a policy banning employees from playing on their employers' sites.

Additionally, FanDuel announced that it has hired former federal judge and U.S. Attorney General Michael Mukasey to review the facts and evaluate internal standards and policies. DraftKings confirmed that it hired the law firm of Greenberg Traurig to handle the internal audit of company policies.

To top it all off, New York Attorney General Eric Schneiderman announced on Tuesday that he launched an inquiry into DraftKings and FanDuel and possible advantages that their employees might have gained by using their companies' data to win prizes offered by other competitors.

According to FanDuel spokesperson Justine Sacco, the company's first internal audit showed that DraftKings employees had won 0.3% of the overall money the company has ever awarded. By admission, FanDuel has handed out over $2 billion in prizes overall. That means that employees from DraftKings have won over $6 million.



Fantasy Players Now Filing Suit Against DraftKings and FanDuel

Pandora's box officially opened last week after the Haskell incident came to light. On top of all the negative media attention and the hiring of law firms and federal investigators to conduct internal audits, the two leading sites in daily fantasy sports will now have to defend a lawsuit from one of their customers.

On Thursday, Adam Johnson, a daily fantasy sports player from Kentucky, filed a federal lawsuit in New York accusing both companies of fraud. The lawsuit asks for damages for him and others "similarly situated," claiming that the companies failed to disclose that their employees had access to insider data that they could use to win millions of dollars at the expense of regular customers.


Fédération Internationale de Football Association President Sepp Blatter Faces 90 Days Provision Suspension

In late September, Switzerland authorities announced that they were opening a criminal investigation on Fédération Internationale de Football Association (FIFA) President, Sepp Blatter, for criminal misappropriation and mismanagement of FIFA money. The Swiss attorney general interrogated Blatter in Zurich, and heard him continuously claim that he had done nothing illegal or improper. The investigation accuses Blatter of signing an unfavorable contract and making a disloyal payment to UEFA president, Michael Platini.

Although the criminal investigation was looming over his head, Blatter still announced that he would not step down and that he will remain president until February. However, the Swiss investigation gave FIFA another chance to analyze his conduct, through an investigation by the FIFA ethics committee. This investigation seemed to present the fastest (and only) way to get Blatter out of the presidency for the short term.

As predicted, on Wednesday, October 7th, FIFA's ethics committee ruled to provisionally suspend Blatter for 90 days. Klauss Stohlker, Blatter's attorney, continued to claim that Blatter had done nothing wrong, and that the committee should have at least attempted to hear from Blatter prior to making a ruling. The ruling also suspended Union of European Football Associations president Michael Platini.

http://www.bbc.com/sport/0/football/34468663 and http://edition.cnn.com/2015/10/07/sport/blatter-suspended-fifa/

Tough Contracts Forbid Many Stars From Participating in Rugby World Cup

In strict contrast with the futbo,l or soccer, World Cup, the rugby World Cup admittedly does not include many of the world's best players. This year's tournament began on September 18th and concludes on October 31th. It is lacking some of the top stars in the sport because of strict contract language that is commonplace in the sport.

Unlike soccer and many other professional sports, several European rugby teams include contract language that specifically states that players cannot also play for their national teams. This contract language hurts the players, the national teams, the fans, and the sport as a whole, by denying many top players the ability to represent their countries in international play.

This is particularly harmful for the smaller nations that do not have as many star quality players. In those instances, elite players from smaller nations will play in Europe and ultimately be forced to sign contracts barring them from playing for their national teams.

Elvis Seveali'i, a former Samoan wing player, described contract negotiations with the clubs as brutally straightforward. He said that he was offered two contracts by the team, but the only difference between them was that one included roughly 30% more money, but also a clause stating that he agreed to end his international career. Seveali'i said that the newspaper the following day had an article noting that he had retired from international rugby at the ripe age of 23.

The sports global governing body, known as World Rugby, has Regulation 9 in place for this exact situation. Regulation 9 essentially states that a national team has the right to call up whatever players it wants for important matches. Any alleged breaches of Regulation 9 are investigated thoroughly by World Rugby, according to an organizations spokesman. However, the spokesman also stated that they have received no reported breaches leading up to this World Cup.

The global rugby players union has been aware of the problem for years. The union's leader, Rob Nichol, claims that the problem, like many others, centers around money and that it only impacts the 15% of professional rugby players from the Pacific islands. Nichol also blames the tiered structure of global rugby that allows top tier federations in England, Australia and New Zealand, to profit from the Rugby World Cup more that those at other tiers. According to Nichol, the rapid rise of professional rugby since 1997 has only perpetuated the matter.


$20 Million Can't Even Get A College Named After You

Paul Smith's College, located in the Adirondack Pack in northern New York State, was created in 1937 from Phelps Smith's bequest. The only requirement was that the college be forever known as Paul Smith's College of Arts and Sciences, in honor of Phelps father, a 19th century hotelier.

The small college in New York State was struggling with donations until recently, when Joan Weill, the wife of Wall Street billionaire Sanford Weill, proposed a $20 million dollar gift to the college. Weill's only condition was for the college to become known as Joan Weill-Paul Smith's College.

The decision to change the name and accept the Weill's gift or honor the founder's words became a hot topic of debate in the small town and caused some chaos. That all ended this Wednesday, when a state judge rejected the name change. The ruling stated that Mrs. Weill's money did not give the college the license to violate a provision in the founder's will naming the college after his father in perpetuity.

The decision is one of the few cases of its kind to end with a judicial ruling. Experts are now saying that this decision will set the precedent for how long colleges must obey to restrictions set at their founding. Showing that perpetual naming agreements will not be lifted easily.


Brief Victory for National Collegiate Athletic Association as Panel Strikes Down Pay for College Athletes

On Wednesday, September 30th, a three-judge panel of the United States Court of Appeals for the Ninth Circuit made a ruling in the precedent setting O'Bannon case, declaring that the National Collegiate Athletic Association (NCAA) may restrict colleges from compensating athletes beyond the cost of attendance. This ruling appears to be a win on its face for the NCAA; however, there are parts of the decision that both sides will dislike.

In short, the Court acknowledged the central argument claimed by O'Bannon, stating that certain NCAA amateurism rules violate federal antitrust law. However, the Court also declared that the NCAA member schools' newly proclaimed requirements to pay Division I football and men's basketball players up to $5,000 a year for name, image and likeness rights (NIL) is void. This requirement was enacted after a 2014 injunction issued by United States District Court Judge Claudia Wilken, which allowed the NCAA to provide money above the cost of attendance to some student athletes in exchange for using their NIL rights.

This most recent decision by the Ninth Circuit threw out a very vital part of the District Court's pro O'Bannon ruling. Conversely, the Ninth Circuit affirmed the core reasoning of the District Court's decision, stating that the NCAA was violating Section 1 of the Sherman Antitrust Act for many years. More specifically, the opinion stated that the NCAA's amateurism rules unlawfully prevent member schools and conferences from competing to compensate Division 1 men's basketball and football players. Additionally, the Ninth Circuit rejected the NCAA's reliance on the 1984 Supreme Court decision in NCAA v. Board of Regents, which claimed that challenges to the NCAA amateurism rules were void as a matter of law, and emphasizing that NCAA rules wee subject to the same antitrust scrutiny as rules adopted in other industries.

In conclusion, the ruling is deemed a win for the NCAA because it limits the scope of member schools' abilities to pay student athletes more than the cost of attendance by giving them up to $5,000 for their NIL rights. Throwing out the District Court's proposal, the core argument made by O'Bannon was upheld and the Court declared that the NCAA violated the Sherman Act.

Although the decision may be viewed as a brief victory for the NCAA, this case is still far from over, as an appeal seems likely by either side, or both.


Global Criminal Court Finally Takes Case on Cultural Crimes

Prosecutors have brought a radical Islamist to the International Criminal Court (ICC) for allegedly destroying ancient religious monuments in 2012, when his extremist group overran Timbuktu in Mali. Last week, Ahmad al-Faqi al-Mahdi was handed over to the ICC for an initial appearance before an international judge.

Prosecutors claim that al-Mahdi is the head of a self-appointed "morality squad," working with a new Islamist Court, and that he is a "zealous member" of Ansar Dine, an Islamic extremist group linked to Al Qaeda. Al-Mahdi is alleged to have played an active role in committing war crimes in Timbuktu by directing attacks against 10 religious buildings. These buildings are said to hold much of Timbuktu's cultural Islamic heritage. In contrast, al-Mahdi stated that he was a 40-year-old teachers' college graduate and civil servant.

The destruction of the buildings and cultural artifacts in Mali relating to this case date back to 2012, when Timbuktu and other northern desert towns were overran by Islamic radicals. One such group, the Ansar Dine, or Defenders of the Faith, of which prosecutors claim al-Mahdi is a member, destroyed many of the town's idols and cultural symbols. More recently, attacks on cultural and religious sites in Iraq and Syria have pushed this issue to attention in the media. However, the ICC does not have jurisdiction in those countries. This might be one reason as to why the ICC finally decided involve itself in al-Madhi's case in Mali, after Mali's government reached out to the ICC asking for help, as it was incapable of conducting widespread criminal investigations.


Toledo Museum of Art Returns Smuggled Indian Works

The Toledo Museum of Art has decided that it would return a nearly 1,000-year-old bronze sculpture of the Hindu god Ganesha, along with three other pieces of rare Indian artwork, to the Government of India. The four ancient objects were purchased by the museum in 2006 from Subhash Kapoor, a former New York art dealer, who is currently awaiting trial in the southern Indian city of Chennai on charges of forgery, conspiracy, theft and smuggling. The United States is also pursuing criminal charges against Kapoor, and has described him as the most ambitious antiquities smugglers in American history.

The Toledo Museum of Art and the Indian Consulate General Ambassador researched this matter, and recently came to the conclusion that the provenance of the pieces were either falsified or could not be verified. A recommendation was then made for the return of the pieces to the Toledo Museum of Art's Art Committee. The Art Committee voted to return the Ganesha piece. The issue with the provenance and the facts surrounding Kapoor were also taken into account, and the Art Committee ultimately decided to return all four pieces to the Indian government for display.


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This page contains a single entry from the blog posted on October 10, 2015 1:55 PM.

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