This Week In Sports Law: Federal Fantasy Hearing, NFL Concussion Cash, Miami's Soccer Struggle

This Week In Sports Law: Federal Fantasy Hearing, NFL Concussion Cash, Miami's Soccer Struggle

The following article can be found in its original form at this link from Forbes:

Forbes: Darren Heitner, May 15, 2016

Congress Makes It Clear That It Does Not Understand Fantasy Sports

On May 11, the U.S. House of Representatives Committee on Energy and Commerce met with individuals representing a broad spectrum of the fantasy sports industry as well as those on behalf of companies seeking to provide services to improve on the integrity of games.

The Committee’s justification for the hearing was that it sought to better understand whether fantasy sports should be regulated by the federal government (as opposed to leaving it up to the states), and if so, what regulations should look like.

A little bit of the discussion actually focused on the stated objective, with reference to Massachusetts’ daily fantasy sports regulations as a potential template to work off of should the federal government become involved in regulating the industry. However, a lot of time was focused on educating members of Congress on fantasy sports (and, in particular, daily fantasy sports) as well as pushing an agenda planned in advance by U.S. Rep. Frank Pallone, D-N.J.

There’s still a horrifying lack of knowledge out there among legislators who are debating whether DFS is gambling, should be regulated, etc.

The hearing seemed to be a pity party for Pallone to explain why it is unfair for his State of New Jersey to be prevented from allowing bets on the outcomes of professional sports. If you expected much to be accomplished on the fantasy sports front, then you were grossly disappointed.

FanDuel and DraftKings decided not to attend the hearing. Neither did any representatives from the major professional sports leagues. In case you did not know, the NBA has an equity interest in FanDuel. MLB is a part owner of DraftKings. Multiple NFL team owners have a piece of daily fantasy companies as well.

Meanwhile, Missouri Decides To Legalize Daily Fantasy Games

Missouri has become the sixth state to pass legislation legalizing and regulating daily fantasy sports. Indiana, Virginia and Tennessee have all passed similar legislation and saw their respective governors sign it into law.

Missouri joins Mississippi and Colorado as states in the queue for having their governors put pen to paper. The new Missouri law will exempt daily fantasy sports from Missouri’s existing gambling law. Daily fantasy sports operators will be required to pay an annual licensing fee that is the lesser of $10,000 or 10% of the operator’s net revenue derived from those within Missouri. There also appears to be an annual operation fee of 11.5% on those net revenues.

“We appreciate that the legislature wants to address this issue but this bill will kill us,” said small business owner and co-founder of the Small Businesses of Fantasy Sports Trade Association(SBFSTA) Alex Kaganovsky. “Indiana and Virgina have already given FanDuel and DraftKings carte blanche to operate without competition. Currently, small businesses cannot operate in those states.”

“We’re talking about several hundred mom and pop businesses that serve several thousand players each, not millions of players like the gigantic companies,” said SBFSTA co-founder Dave Gerczak. “Season-long fantasy sports is a hobby. The taxes and fees proposed in Missouri are unbearable.”

Tweet Repeat

This Tweet delivered by lawyer Alan Milstein was worth repeating.

Congressional hearing on DFS a waste of time. They have to reach conclusion PASPA should be repealed.

Milstein represented former Ohio State running back Maurice Clarett against the NFL in an effort to be declared eligible before he was three years out of high school. Clarett ultimately did not prevail in his fight.

Lucky Number 224,000,000

This week’s lucky number is 224 million, which is the approximate number of views of Taco Bell’s Snapchat filter used on Cinco de Mayo. Taco Bell bested Gatorade's  previous record of 165 million brand views curated during its Super Bowl sponsorship.

Transactions will no longer focus on Facebook FB -0.81%Twitter TWTR +0.35% and Instagram in social media deliverables. Snapchat is quickly gaining importance in the battle of the brands.

A Nasty Consequence Of NFL Concussion Payouts

We have finally reached the day where former NFL players complaining of pain and suffering emanating from taking multiple nasty hits in the NFL will be paid off as part of a settlement between them and the NFL. Former players able to prove damages will receive upwards of $5 million as part of the settlement that ends years of litigation stemming from a claim that the NFL was negligent when it came to educating and diagnosing concussions.

Many NFL players desperately need the money that they are now entitled to and a group of lenders appear to find this as an opportunity to provide what many states would label as usurious loans. Some lenders are offering money up front to those players with interest rates as high as 40%, per the New York Times NYT -2.15%.

Unfortunately, players who take out such loans may later find themselves in further nasty litigation if they default on any of their obligations.

The Struggle To Bring Pro Soccer To Miami Continues

David Beckham would like to build a soccer stadium in Miami, Florida and bring the city a Major League Soccer franchise. Despite his desire to pay the bulk of the bill, Beckham and his team have been shut down after many attempts to persuade local law makers on a suitable location for the stadium.

After it seemed as though Beckham and the city had determined where the stadium will be built (in Overtown), the sides have once again become embroiled in a dispute. Miami demands hiring goals, employee benefits and local-business perks. Beckham and his group have not taken comfort with the requests.

Miami-Dade County voters clearly want the deal to be done. It would be a shame for the proposed benefits package to serve as a barrier to bringing soccer to Miami.

You Probably Didn’t Know That

The highest hourly rate corporate clients are paying their attorneys $2,000 per hour, per BTI Consulting Group. Yes, a lawyer may be bringing in more money in an hour than many make in an entire month.

Jason Pierre-Paul Pushes Back Against ESPN's  Motion To Dismiss

Jason Pierre-Paul filed a lawsuit against ESPN and Adam Schefter for Schefter’s Tweet containing Pierre-Paul’s medical records related to when the NFL player had a July 4 fireworks “incident.” I previously discussed the issues with Pierre-Paul’s case, which is based on a violation of a Florida statute as well as a claim of invasion of privacy.

ESPN and Schefter have since filed a motion to dismiss Pierre-Paul’s case and Pierre-Paul has fought back in a response to same. The defendants are claiming that they should be protected by the First Amendment, which acts as a shield for individuals and entities reporting about matters of public concern. Pierre-Paul says that the actual medical records were not newsworthy, which should keep the case in play past a motion to dismiss. The court has yet to rule on the pending motion to dismiss the case.

It’s ‘Lights Out’ For Teddy Bear Company

In April, former NFL linebacker Shawne Merriman sued The Vermont Teddy Bear Company for using Merriman’s ‘Lights Out’ trademark on some of its products, including adult and kids’ sleepwear. The parties have come to a quick settlement as the judge assigned to the case executed a joint motion to dismiss the lawsuit. Merriman can move on and the teddy bear company shall survive. Terms of the settlement agreement have not been disclosed.

Under Armour UA +0.79% And Adidas Make Pact

After over two years of litigation, adidas has settled patent infringement litigation against Under Armour. The lawsuit was based on Under Armour’s use of fitness-related technology in its subsidiary MapMyFitness. Under Armour will pay adidas a licensing fee going forward.

Potent Quotables

“No, we’re not for sale, but let me tell you what. If somebody shows up with $4 billion, we can talk. We can definitely talk.” – UFC President Dana White.

Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.

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