You are here

OpenMarket: Risk and Consumer Freedom

  • 3 Political Food Developments to Be Thankful For

    November 24, 2015 9:44 AM

    For most of us in the U.S., we don’t have to worry about getting enough food. Quite the opposite actually; holidays like Thanksgiving can be anxiety-inducing for anyone trying to lose or keep off excess weight. But so long as you take care to have a healthy diet for most of the year, there’s no harm in a little indulgence to celebrate hard work and blessings well-deserved. So, in addition to great food, family, and friends, here are a few food-related things I am thankful for.

    BPA-lined canned goods: As my colleague Angela Logomasini noted, “BPA—which is short for bisphenol A—is a chemical manufactures have used for 60 or so years to make hard plastics and resins used in food packaging without ever being traced back to any actual health problems.” That, of course, hasn’t stopped the peddlers of fear from sounding the alarm and making claims that BPA is responsible for cancer, fetal development issues, and infertility, among other ills and trying to have the substance banned. The good news is, despite the fact that BPA is banned in France (and banned for use in baby products throughout the EU) the European Food Safety Authority re-evaluated bisphenol A earlier this year and declared that it poses no health risk for consumers of any age.

    And in all the hullabaloo of the possible risks, people are forgetting why we started lining cans with BPA in the first place. As Angela said, “This Thanksgiving, I am going to be happy that the cans my cranberry sauce came in were lined with a resin made with bisphenol-A because it greatly reduces the chance that those cranberries will have been contaminated with botulism or some other dangerous organisms. It also keeps my food free from rust, which would otherwise detract from the fruit flavors.”

  • House Commerce Committee Approves "Pizza" Bill to Ease Onerous Calorie Labeling Rule

    November 23, 2015 7:02 AM

    While most consumers are blissfully unaware, a provision tucked into the Affordable Care Act could cause food vendors a lot of headaches. Starting on December 1, 2016, the Food and Drug Administration (FDA) is supposed to require all chain food restaurants with 20 or more locations will have to list calorie information for “standard menu items” on all signs and printed menus. This includes pizza shops and grocery store salad or hot food bars which offer dizzying arrays of options and some that change daily. But businesses are fighting back and this week the House Energy and Commerce Committee passed a bill backed by many in the industry.

    The rule, which is intended to help Americans watch their waistlines, would cost shops—many of which are franchises owned by small business people—thousands of dollars to re-design signs and menus and millions of hours in compliance. In fact, the provision was named “third-most-onerous regulation of 2013” by President Obama’s own Office of Management and Budget. As I wrote earlier this month, the costs associated with calorie testing might also force craft beers off the menus of chain restaurants.

    If approved by Congress, the Common Sense Nutrition Disclosure Act of 2015 (H.R. 2017) would amend the FDA’s rules, adding flexibility in how chains comply with the nutritional disclosure requirement. Pizza shops, for example, would be allowed to disclose the nutritional content of their menu items online—a good thing since almost none of their customers ever enter their shops. It also removes criminal penalties for restaurants that accidentally serve customers a larger order than they expected. Seems reasonable enough, right?

  • Should a Billionaire Decide Where Pennsylvanians Can Gamble?

    November 16, 2015 5:39 PM

    The casino industry has been good for my home state of Pennsylvania. For whatever ills one might claim goes along with gambling, the gaming industry has brought Pennsylvania $1.7 billion in total labor income, supports almost 34,000 jobs, and generates more than $2.4 billion in total tax revenues. Tomorrow, Pennsylvania state representatives will likely have a chance to vote on whether or not to take that industry online by allowing the state to license Internet gambling. Of course, wherever there is big money there is politics. While the move would make Pennsylvania more competitive with neighboring states like New Jersey and Delaware and generate even more tax revenue, special interests are rearing their ugly heads and opening their very large wallets… for the children, of course.

    According to the American Gaming Association, around 10 million Americans gamble online each year and we spent approximately $30 billion between 2003 and 2010. That was before New Jersey, Delaware, and Nevada passed legislation making the activity legal.

    There is no doubt that Pennsylvania is losing potential tax revenue to black market Internet gambling. Even worse is the fact that Pennsylvanians have to gamble on black market websites based overseas instead of placing their wagers on sites operated from and licensed by the state as neighboring Delawareans and New Jerseyans can.

    One lawmaker, Rep John D. Payne (R-Dauphin), chairman of the House Gaming Oversight Committee, has introduced legislation to legalize and regulate online gambling within the state. His House Bill 649 would allow existing Pennsylvania casinos within the state apply for “operator licenses,” requiring sites to verify age and location and giving the state the power to crack down on unauthorized sites.

  • Daily Fantasy Sports Betting: Gambling or Game of Skill?

    November 11, 2015 12:40 PM

    That is the big question in New York today after that state’s attorney general issued a cease and desist order to DraftKings and FanDuel—the two most popular websites in the daily fantasy sports wagering. In the order, Attorney General Eric Schneiderman contends that that the websites constitute illegal gambling under state law, according to which gambling is when a person “engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome.” The question for courts, assuming this case goes to court, is whether or not online fantasy sports bettors have any control or influence over the outcome of their wagers.

    The sudden legal and congressional interest in fantasy sports comes as the industry is becoming big business. Since beginning in the 2000s, online daily fantasy has bloomed into a multi-billion dollar industry. In North America alone, players spend around $27 billion a year! To make matters even stickier, the professional sports leagues have gone all-in with the online fantasy industry, with Fox Sports, MLB, NHL, MLS, and individual teams investing in the industry. While it might seem strange that pro-sports leagues, who are known for vehemently opposing legalizing sports gambling, would throw in their lot with fantasy sports, there’s a very simple reason why they’ve done so: money. According to reports, fans consume 40 percent more sports content after they started playing on FanDuel. So, is it game over for online daily fantasy sports?

    Operators of DFS sites have contended that their operations are not in violation of any law because they are not gambling, but rather games of skill which are considered legal under federal law and the laws of 45 of the 50 states. Another fact that bolsters the case for legal DFS is that there are no federal laws criminalizing DFS and a few that specifically exempt DFS from being considered gambling.

    However, the ultimate determining factor is state law. A handful of states, such as Washington, consider a game “gambling” if there’s even a “material degree” of chance involved in the outcome. Other states, like Arizona, have laws that explicitly make fantasy sports gambling for money illegal. To their credit, DFS sites like DraftKings voluntarily restrict access for players in these states where fantasy sports betting is most likely illegal. However, for most states, including New York, the laws are vaguer and consider games “skill” if the player has some degree of control over the outcome.

    According to gaming expert Mark Hichar, “In true skill contests, the outcome of the contest depends on the participant’s  relative knowledge, judgment, decision-making ability, experience, skill, dexterity, quickness, athletic ability and/or understanding of the contest and its rules (collectively, “skill”). Gambling laws do not apply to true skill contests because the outcome is within the control of the participant.”

  • Federal Menu Laws Need Some Common Sense

    November 2, 2015 4:36 PM

    This week, the House Energy and Commerce committee will hold a mark-up hearing on the Common Sense Nutrition Disclosure Act (H.R. 2017), a bipartisan bill intended to deal with a little-known provision of the Affordable Care Act that could increase the burden on small businesses and unintentionally increase the price families pay when they eat at restaurants.  

    Provision 4205 of the ACA requires that retail food establishments with 20 or more locations to list calories for regular menu items it serves on all signs and printed menus. The rule, which was named “third-most-onerous regulation of 2013” by Obama’s own Office of Management and Budget, is set to go into effect December 1, 2016, and covers restaurants, grocery stores, pizza shops, convenience stores, and vending machines. While the one-size-fits-all rule is intended to downsize America’s obesity problem, research shows that it’s unlikely to work. Brian Elbel, a population-health expert at the New York University School of Medicine looked at the effects of New York City and Philadelphia’s calorie menu labeling requirement and found no significant change in the customers’ orders after the calorie-rules went into effect.

    What the rule will do is supersize restaurants’ expenses, requiring an estimated 14.5 million hours to comply with the rule—costs which restaurants will almost certainly pass along to their customers. Franchises will be hit particularly hard. As Jason Stverak at Forbes noted, “Although the law is designed to target corporate fast-food giants, in practice it will largely affect individual franchises that effectively operate as independent small businesses…Each of these franchisees will now be tasked with complying with the mandate–paying for new signage, removing profit-generating advertisements to make room for the calorie data, updating menus every time recipies (sic) change, and accommodating inspectors.”

  • Halloween Not So Scary for Parents

    October 30, 2015 1:21 PM

    When it comes to Halloween these days, it seems that parents scare more easily than their children. For the past 15 years, I have checked the news as Halloween approaches. It is always full of warnings from health and safety officialdom that parents should check their children’s collected candy for signs of tampering with nefarious intent. Here are just three examples I found with a 30 second Google search today. It’s just as much hogwash as it was when I started.

    The best data we have on such Halloween sadism is compiled each year by University of Delaware professor Joel Best. His conclusion is simple:

    In my own research, I have been unable to find a substantiated report of a child being killed or seriously injured by a contaminated treat picked up in the course of trick-or-treating.

  • The Real Question about Fantasy Sports Gambling the GOP Debate Missed

    October 29, 2015 2:27 PM

    In this clown-car of a GOP primary, it’s inevitable that the discussion will sometimes veer onto more superficial avenues of questioning. After all, news is entertainment and a little light-hearted banter can be the spice that makes the meal more palatable. But, by most accounts, the CNBC moderators in last night’s debate were all fluff and no substance. At one point, in what was one of the strongest moments of the debate, Chris Christie mocked the moderators for their superficial questions. “Are we really talking about getting government involved in fantasy football,” he asked to wild audience applause.

    While Christie was correct that the question of whether the government should treat online daily fantasy sports betting as “gambling” wasn’t very substantive, but there was a question they could have asked or followed up with that would have been not only entertaining, but also would have enlightened viewers about the fitness of the candidates to lead the GOP. That question would have been: do you think the federal government should regulate or ban state-based online gambling or should the states be able to make that decision?

    Recently, daily fantasy sports (or DFS) has received unwanted attention from lawmakers and state attorneys. While the proprietors of sites like DraftKings and FanDuel insist that their activities violate no federal laws, some observers have become increasingly skeptical about that claim and believe that the line between fantasy sports betting and just plain old sports betting has been blurred. During the debate Quintanilla asked Jeb Bush if daily fantasy sports, which “will award billions in prize money this year,” qualifies as gambling and if the federal government should “treat it as such?”

    Bush responded first with humorous comments about how well his fantasy team is performing, but then touched on the current scandal within the industry. It was revealed that an employee of DraftKings recently made $350,000 on their rival site, FanDuel. Bush said that DFS was effectively “day trading without any regulation at all. And when you have insider information, which apparently has been the case, where people use that information and use big data to try to take advantage of it, there has to be some regulation.” Bush questioned whether the federal government would be the appropriate entity to impose such regulations and came to the conclusion that “my instinct is to say, hell no, just about everything about the federal government.”

  • Glyphosate in Tampons, Oh My!

    October 26, 2015 3:35 PM

    You may have seen the hilarious headlines about putting Monsanto in your vagina (if not, you’re welcome/I’m sorry). This hyperbole comes on the heels of a new study showing that the majority of cotton products tested by Argentinian researchers were found to contain glyphosate—the herbicide made by Monsanto and commercially known as Roundup. Even if you’re comfortable with farmers spraying crops with chemicals that keep away insects or competing plants, like weeds, the idea of putting that into your hooha is probably less comfortable of a thought.

    The good news is that, as with most headlines, these findings have been taken out of context and probably aren’t anything to freak out about. The team of researchers from the National University of La Plata purchased personal care and feminine hygiene products from drugstores and supermarkets in Argentina. Eighty-five percent of the products they tested, including tampons, sanitary pads, sterile gauze, and cotton swabs contained glyphosate—which the World Health Organization classifies as a probable carcinogen. But, as with most things, it’s the dose that makes the poison.

    According to Doctor Damián Marino, the lead on this study, the amount of glyphosate found in the cotton products is relatively small (some might say bordering on infinitesimal). “In terms of concentrations, what we saw is that in raw cotton AMPA dominates (39 parts per billion, or PPB, and 13 PPB of glyphosate), while the gauze is absent of AMPA, but contained glyphosate at 17 PPB,” said Marino.

  • Drinking in the Dark

    October 26, 2015 9:50 AM

    Bellion Vodka has one strange website. Bellion claims to be “the next step in the evolution of spirits” and “a smarter way to drink.” Its secret is NTX—“a technology developed to evolve spirits by making them functional and smarter.”

    But if you’re hoping for more information, forget about it. There’s a warning that NTX will “not prevent alcohol intoxication, will not ameliorate the overall harmful effects that occur from drinking in excess, and will not render alcohol safe for those who suffer from alcoholism, liver disease, diabetes, or any other disease for which alcohol is contraindicated.” And there’s the factoid that NTX is trademarked by a company called Chigurupati Technologies.

    Now websites announcing new breakthroughs are sometimes deliberately designed with an air of mystery, keeping the details secret in order to raise public interest. But in this case the air of mystery comes not from some marketing guru, but from federal regulation. Google “Chigurupati Technologies” and you’ll be led to some additional information on how NTX somehow makes “drinking smarter,” but nothing that explains just what’s going on. And then you find this statement: “Federal regulations prohibit us from making any health related statements regarding NTX.”

  • What Will a Chaffetz Speakership Mean for Internet Freedom? Part 2

    October 8, 2015 12:23 PM

    Utah Republican Congressman Jason Chaffetz recently threw his hat in the ring in a bid to replace Speaker John Boehner, after House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation made the race far more open. As my colleague Jessica Melugin notes, Chaffetz considers himself one of the more tech-savvy members of Congress and a strong defender of the Tenth Amendment.

    Yet, Chaffetz has twice introduced the Restoration of America’ Wire Act (RAWA, H.R. 707), which would allow the federal government to overturn state laws that govern a wholly intrastate activity. Internet gambling has been around since the day the Internet made it into American homes. And Republican lawmakers have been trying to ban it—without much luck. So much for state sovereignty.

    There is no federal law directly governing Internet gambling, so the task has been left to the Department of Justice to interpret existing federal gaming laws. During the Clinton administration, DOJ defined online sports betting as unlawful. Then during George W. Bush’s administration, DOJ determined that all online gambling was illegal under U.S. law—an interpretation that held until 2011 when, pressed by state lotteries, the Obama DOJ returned to the previously held understanding: As long as the gambling is intrastate and not related sports betting, it is not illegal under federal law.

    This opened the door for states to legalize intrastate online gambling. Three states—New Jersey, Delaware, and Nevada—have done so. In addition, more than a dozen states have some form of lottery games available online.

    Unsurprisingly, casino magnate and GOP mega-donor Sheldon Adelson has poured millions of dollars into promoting legislation meant to crush the burgeoning online competition to his business. What is surprising is who in Congress is now pushing his federalism-trampling bill.


Subscribe to OpenMarket: Risk and Consumer Freedom