tv Nightly Business Report PBS November 26, 2015 6:30pm-7:01pm PST
this is nightly business report. with tyler mathisen and sue herera. >> good evening, everyone. welcome. happy, thanksgiving and welcome to this special edition of "nightly business report." >> thanksgiving as we all know is a day of gratitude, we spend it traveling to see friends and family, we eat, we watch football and we give back. tonight all of the above is on our menu. we take a look at how disruptive companies have changed the way we travel, how the on demand economy is making it easier to help those in need. even america's most beloved pastime, football is arriving with fantasy sports. >> draft kings and fan dual are the two biggest companies
growing. they have attracted the lawmakers and regulators. >> an employee of draft kings accidentally leaked proprietary information to the public the same week he won a fantasy contest on a rival site. that raised a lot of questions about the integrity as a whole and daily fantasy sports in particular. >> in fantasy sports, fans choose real players to create their fantasy teams. statistics compiled by the real players during games are then totaled to see whose fantasy team is best. daily and weekly payouts instead of waiting for a full season to play out, are attracting customers and how. the fantasy sports trade association says 57 million people will play online this
year. up about 40% from just last year, they'll pay more than 2 $1/2 billion in entry fees. a number expected to top 14 billion in five years. it's no wonder, fan dual raised more than $360 million in its latest round of investments. stakeholders include comcast, the parent of nbr's producer, along with time warner, turner sports and the national basketball association. draft kings pulled in more than $420 million in its most recent round. among the draft kings investors are fox sports, major league baseball and the national hockey league. all that action has pushed the valuation of both companies, north of a billion dollars. the sites gave many media companies. draft kings was a top spender on u.s. tv advertising in september. fanduel was 7th. there are questions and issues surrounding the business of
fantasy sports. the legal foundation is murky at best. they exist because a 2006 federal law which was supposed to shore up security at the nation as port, included a section on internet gambling. the september incident involving a draft kings employee has not made the sites business any easier. the department of justice, the fbi and a number of states attorneys general are looking into the fan tasscy business. participants aren't taking the legal challenges lying down. the fantasy sports trade association rallied to protest the new york attorney general's order to cease operations in the state. the ultimate resolution of that case and others remains to be seen. what does seem clear is that online fantasy sports betting or
not, will face more scrutiny and perhaps regulation. >> daniel joins us now to talk more about the issues and the challenges that lie ahead for daily fantasy sports, he's a sports and gambling attorney and partner at ecker and paulincoff. nice to have you here, welcome. >> let's start with how big a threat you think the new york ag's action is against these companies. this is the state's chief legal officer in probably the most important state in the country. we're talking about a battle for the industries survival, if the ag is successful in persuading a new york supreme court that this is illegal gambling, both fanduel and draft kings will have to cease operations in new york and this could potentially set the stage for criminal charges at the federal level. >> i have two questions for you,
do you think these sites are gambling? >> it depends on the state. it depends on the nature of the contest. unfortunately for draft kings and fanduel, new york has a low this remember hold for what constitutes gambling. it is not necessary for chance as opposed to skill to be the dominant element. in new york, the this remember hold is only weather chance plays a material element of the outcome of the contest. and alternatively it could be gambling under new york law if you're staking or risking money on the outcome of a future contingent event over which you have no control or influence. >> it depends on how the state defines gambling. what could be gambling in new york may not be gambling in mississippi. if federal law exempts these from that, doesn't the federal statute trump the states?
isn't there a federal issue here? >> not in this particular insta instance. it only exempts fantasy sports from prosecution under uega. that statute does not alter or is a plant other federal laws or even state laws which regulate or prohibit gambling. the states are free to determine the legality of fantasy sports under their own regulations. the federal law does not trump state law. >> if they lose in new york, if this industry loses in new york, are they still viable or not? >> it's the difference between being a major monolith or a fantasy player. you could say good-bye to the
sports leagues. the payment processors, the all important banks and credit card companies, which fund and process the payments will become wary of continuing to participate. the industry's survival will be in doubt. >> a very quick thought for you on the relationship of the sports leagues with these sites. it seems odd to me, they have historically been so against anything that had the slightest whiff of gambling. they don't want to talk about points spreads. >> historically, the professional sports leagues have been opposed to all forms of gambling, the players are not allowed to enter casinos and participate in poker tournaments, the word gambling is an athema to sports leagues. gambling can be entertainment. once the new york court or other
jurisdictions determine this is zbambling, you may see them disassociate themselves or scale back their promotion or support of daily sports. that's an adverse risk of a court decision in new york. >> i will be watching and you will be to. >> daniel wallace. if you doubt the impact of daily fantasy they're taking the cool out of the black jack machines. they're not sitting idle. >> vegas has a millennial problem. young people like to come to sin ci city, but they don't like to gamble. these new games may not be
enough many millennials like spending money to play fantasy sports. jim murren is the alpha dog on the las vegas strip. casinos have not been able to get into fantasy sports, until recently, these types of games haven't been classified as gambling. the skill needed to win overshadowed the element of chance. you. >> think it's gambling, don't you? >> of course it's gambling. it's absolutely, utterly in my opinion, gamtbling. do i think it's wrong? no. >> regulators are starting to agree. no one ask regulate and propagate gambling better than las vegas, any change would be a huge threat as they would face established veteran competition. >> if i want to be in that business, i think they will do very well in that business. making sure what is allowed,
if you have somewhere to go this thanksgiving, one way to get there is uber. perhaps it's no surprise it's impacted the larger economy in ways we haven't figured out yet. as indicate rogers reports, even older americans are feeling the start-ups effect. >> well workers over 65 outnumbering takens for the first time since 1948, some retirees are finding new work in a sharing economy. take 69-year-old judith gordon in phoenix, arizona. she was intrigued by the opportunity driving presented. >> i applied, i love the ad, and i was accepted but i didn't take the application for three months, because i was in limbo, not sure i wanted to be a driver. i had a dream. it said i could make a lot of money, i went down picked up my phone and started driving right away.
>> uber is her pastime. she can make up to $850 a week as a driver partner. >> i do love meeting new people. every rider is a new person with a new personality, and new things to talk about, it's actually exciting. >> about one third of the american workforce is now over 50. uber's driver demographics aren't far off from that stat uber said about 258% of its driving partners are over the age of 50. how many drivers total they have is scant. this as lawsuits play out over whether drivers for both companies are employees or independent contractors. for this 64-year-old retired entrepreneur, employee status doesn't matter. he began driving for uber nearly
nine months ago. he read about the ride hailing start-up and was intrigued. >> i told my wife, i said, i'm going to drive a cab. she laughed, you won't last a week, because you hate to drive. i said, well, i've never been paid for it, let me see what happens. >> now he's hooked. t for someone thad, n take vacations every year. that's the gift of this, me and my wife take vacations. >> lift says it's seeing an increase in drivers over 50, and side car says drivers average ages 35 to 45. for nightly business report, i'm kate rogers. >> on now to another unexpected
pairing on our holiday menu. air bnb and cuba. as michelle cabrera reports, no company has been more aggressive than the online room rental site. >> these in our women are visiting cuba. when they tried to book a hotel. they found there was a problem. >> you can't use your credit cards to book online at hotels. that was the major challenge. >> u.s. credit cards still don't work in cuba. then comes air bnb. this home sleeps four, and costs $100 a night. they paid in advance with their credit card with air bnb.
they had more than 1,000 homes listed in two months. including apartments like this one. cubans like marta have been renting rooms in their homes for decades. when fidel castro seized power in a coupe he quickly took over every business. there was plenty of supply for people who wanted to make extra money legally. marta gets paid no matter what, even if the client doesn't show up. which used to happen a lot in the past. >> the air bnb executive in charge of cuba. >> it's based on the internet, this is a country with hardly any internet. how do you overcome that hurdle? >> cubans for those that don't have internet, they have found ways to represent many. >> there's a gray market for internet access.
those lucky few that have a legal connection to the internet manage the air bnb listings for those who don't. >> cubans who rented out their homes have received $90 for each day. it's a huge amount of money in a country where the average salary is only $20 per month. michelle caruso cabrera in havana. >> how is the sharing economy impaukting the overall economy. a senior fellow with the brookings institute joins us now. >> let's start with the overall theme, really. how is it affecting the u.s. economy? >> there's no doubt it's been a good deal for a lot of consumers who are trying to buy services like car rides from point a to point b. room stays somewhere, often places where hotels don't serve them very well. it's great for the consumers, it's probably pretty good, for the people who want to provide services through this form.
this new form of doing business. >> uber has been controversial in many large cities, they have existed wlalargely outside of t regulatory framework that governs taxicabs and livery drivers and limousines and so forth. is it inevitable that these companies, whether it's the ride sharing or the apartment sharing are going to come -- become subject to more regulation? >> i'm sure they will, first of all, a lot of communities have taxes on very similar services, like hotel rooms or motel rooms. and they're going to want to collect similar kinds of fees from air bnb renters, yes, there is going to be -- and there's going to be suspicion, are the drivers well qualified and so on? but the fact of the matter is, a lot of these services are new or are providing services that were
previously unobtainable for people who wanted to go a particular place or who wanted to rent a room. so it's also a new kind of a service. whether it's a big part of the economy is another question entirely. i think that capital valuations of some of these countries suggest it may be huge or profitable. it's not a big slice of the service economy yet. >> is there a down side to this? >> i get the upside certainly, what about the down side, is there one? >> i think the down side might be that it is easier to regulate employers of wage and salary workers to ensure that those workers have some protections on employment compensation protection. independent contractors who work through lift and uber are probably not going to receive that kind of protection. up until now, there are plenty of people who want to provide
that service, even without those protections, nonetheless, if this becomes a big way to deliver these kinds of services, we have to worry about the worker welfare. >> on that note, gary, thank you so much for joining us tonight, gary. coming up, how one start-up is hoping to fix a $175 billion problem, food waste. ♪ ♪
maybe you noticed thanksgiving did cost a little more this year. the average cost is a little over $50. that's a 70 cent increase from last year, the priciest it's ever been. to me, $50 for 10 is low. >> the economy has touched every industry, including food. one d.c. based start-up is hoping to give the industry a makeover. >> forget greasy pizza or thai food. start-up galley is out to prove, takeout doesn't have to be bad for you. >> we have a team of chefs you ask see around me today. they're making options from
scratch. choose what you like, and then in a 30 minute window or on demand we'll deliver it out to you, ready for you to do one quick finishing step. and then it feels -- >> it is now serving d.c. as well as baltimore and bethesda, maryland. >> in less than a year, they've gone from two co-founders cooking and delivering every meal, to a staff of more than 70, preparing hundreds of healthy meals like this every day. >> when you think of a restaurant, you're having physical property and because you're in a physical space that geographic area that you conserve is limited. galley can serve the entire city every day, without having that physical space. you win on both sides.
>> in the future, they're looking to expand locations and offerings, the duos say they're seeing double-digit growth each month, and their new lunch option is growing more quickly fan dinner did. >> whenever people think about food, we want them to think about galley. you can get a galley meal. >> besides making it easier to order in or get around. technology is also being used to help people in need. we'll introduce you to two entrepreneurs who have thought up a business solution to an all too common problem, food waste. their start-up helps redirect discarded food to aide the fight against hunger. roughly 40% of all the food in the united states goes uneaten. most of the extras end up in a dumpster or a landfill.
roger gordon, barbara tucker. >> he would have a shipment rejected by the receiver, because the eggplants weren't dark enough or the carrots weren't separate enough. >> he's been driving big rigs for 30 years, he spoke to us from his truck in virginia via skype. >> it doesn't last long. >> there isn't much time. restaurants close up late at night, when most nonprofits are closed. >> we start to think, if we could -- if you could build an app to get people to food, maybe you should build an app to help food fight people. >> it gives for profit food distributors a way to communicate with the needy and vice versa.
>> we're doing something that hasn't been done. >> they help the gordons craft a big business style app that is palletable. >> food cowboy is, an air traffic control system for food that is coming in from a donor and going out to a recipient charity. >> business community holds the food. creating a system the charities can use replicates the way businesses think. creates a better match. >> can we get an 18 wheeler into the parking lot. >> smaller businesses like family farmers and local restaurants have fewer guaranteed incentives. to grow, food cowboy is depending on changes to the tax code. >> try do explain to a farmer,
congress may grandfather you in, that's not enough to create a permanent change in behavior, which is what we need to do. changing behavior takes time. recycling turned out to be more than a fad. almost 1,000 truckers have downloaded the app and richard gordon says, drivers like it. >> no going out the pay phone, no -- we can drive into another state or another city. >> newer nonprofits in maryland's montgomery county are bringing change to the system. killing fresh food with its own refrigeration unit, but warming up to a more businesslike approach about. >> you get that text, phone call, mobil application alert, you go ahead and rescue the food. the food's going to go bad, you have to get it soon enough, give it to people in need.
>> if food cow boy is successful, it could grow. >> food cowboy hopes to make it easier for everyone to donate. they rolled out a program that will send an uber suv to pick up unserved leftovers from a catered event. thanks so much for watching this special edition of nightly business report. >> enjoy the rest of your holiday, and we will see you tomorrow. ♪
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