Business

Inside a Crypto Nemesis’ Campaign to Rein In the Industry

by SITKI KOVALI
written by SITKI KOVALI

In March, eight months before his cryptocurrency empire imploded, Sam Bankman-Fried joined a video call with Gary Gensler, a longtime financial regulator who now leads the Securities and Exchange Commission.

The meeting didn’t go well. Mr. Bankman-Fried, the chief executive of the Bahamas-based crypto exchange FTX, wanted approval from the S.E.C. to offer cryptocurrencies in the United States without the threat of a fine for violating securities rules.

Mr. Bankman-Fried was joined on the call by FTX staff as well as business partners at the stock exchange IEX, who began walking Mr. Gensler through a PowerPoint presentation. At about the second slide, Mr. Gensler cut them off and launched into a roughly 45-minute lecture on his vision for crypto regulation, preventing any further discussion, three people familiar with the conversation said.

Now Mr. Gensler, 65, is facing off with Mr. Bankman-Fried again. FTX collapsed in epic fashion this month after a run on deposits left it owing $8 billion. The S.E.C. and the Justice Department have opened investigations, focusing on whether Mr. Bankman-Fried illegally lent billions of dollars of his customers’ funds to a hedge fund he owned, Alameda Research, which traded heavily on the FTX platform.

It’s a familiar position for Mr. Gensler, who has fined a series of crypto companies and promoters for securities violations since he became chairman of the S.E.C. in April 2021, with penalties as high as $100 million. A figure whom crypto insiders love to hate, Mr. Gensler is seeking to establish the S.E.C. as the primary overseer of the loosely regulated and freewheeling industry, creating strict guardrails that would bring it under tighter government scrutiny.

“People love a nemesis,” said Sheila Warren, who runs the Crypto Council for Innovation, an industry lobbying group. “He certainly has drawn some of that, almost seemingly deliberately.”

But the collapse of FTX has raised questions about Mr. Gensler’s effectiveness. Mr. Bankman-Fried gained access to the halls of power in Washington, even as he ran an offshore company that promoted risky trading and dipped into its customers’ accounts to fund other investments. After the March meeting with Mr. Bankman-Fried, Mr. Gensler’s staff stayed in contact with the group that had joined the call, going back and forth on possible structures for a fully regulated exchange, four people familiar with the conversations said.

“Reports to my office allege he was helping SBF and FTX work on legal loopholes,” Representative Tom Emmer, a Minnesota Republican who serves on the House Financial Services Committee, tweeted on Nov. 10 of Mr. Gensler. “We’re looking into this.”

Mr. Gensler declined to answer questions about his handling of FTX.

Under his leadership, though, the S.E.C. has made crypto a priority, nearly doubling its enforcement team to 50 members. In February, the agency levied a $100 million fine on the crypto lending company BlockFi over registration failures; BlockFi suspended operations this month as a result of its ties to FTX. According to public filings, the agency is also investigating the process by which Coinbase, the largest U.S. crypto exchange, chooses which cryptocurrencies to offer.

“There were a lot of entrepreneurs that grew up in this field and chose to be noncompliant,” Mr. Gensler said in an interview last month at the S.E.C. headquarters in Washington. “We will be a cop on the beat.”

The Aftermath of FTX’s Downfall

The sudden collapse of the crypto exchange has left the industry stunned.

  • A Spectacular Rise and Fall: Who is Sam Bankman-Fried and how did he become the face of crypto? The Daily charted the spectacular rise and fall of the man behind FTX.
  • A Symbiotic Relationship: Mr. Bankman-Fried’s built FTX partly to help the trading business of Alameda Research, his first company. The ties between the two entities are now coming under scrutiny.
  • Wall Street Seeks to Profit: Brokers are offering FTX customers pennies on the dollar for the bankruptcy rights to their funds trapped on the platform.
  • A Company in Disarray: The new chief executive of FTX, who helped manage Enron after its collapse, said that he had never seen “such a complete failure of corporate control.”

Mr. Gensler’s central claim is simple: For all their novel attributes, most cryptocurrencies are securities, like stocks or other investment products. That means the developers who issue cryptocurrencies must register with the U.S. government and disclose information about their plans. In Mr. Gensler’s view, exchanges like Coinbase and FTX, where customers buy and sell digital coins, should also have to obtain S.E.C. licenses, which come with increased legal scrutiny and disclosure obligations.

The crypto industry has fought the government’s efforts to classify digital assets as securities, arguing that the legal requirements are overly burdensome. Even before FTX’s collapse, the debate was reaching an inflection point: A federal judge is expected to rule in the coming months in a lawsuit brought by the S.E.C. that charges the cryptocurrency issuer Ripple with offering unregistered securities. A victory for the government would strengthen Mr. Gensler’s hand, establishing a precedent that could pave the way for more lawsuits against crypto companies.

A former Goldman Sachs partner, Mr. Gensler became one of the most aggressive financial regulators in Washington after the 2008 recession. As chairman of the Commodity Futures Trading Commission, an agency that regulates the financial markets, he helped carry out the 2010 Dodd-Frank Act, which aimed to protect consumers and rein in Wall Street.

After he left the C.F.T.C. in 2014, Mr. Gensler became fascinated with crypto, which was exploding into the mainstream. At the Massachusetts Institute of Technology, he taught a lecture course called “Blockchain and Money” and appeared optimistic about crypto’s potential to transform financial markets. He still refers to Satoshi Nakamoto, the mysterious figure who invented Bitcoin, as “Nakamoto-San,” a gesture of respect.

“We will be a cop on the beat,” Mr. Gensler said, referring to the crypto industry.Credit…Shuran Huang for The New York Times

So when Mr. Gensler took over the S.E.C., the crypto industry hailed him as an enthusiast who understood the technology’s potential. Bitcoin “is in good hands,” one venture investor tweeted.

But it soon became clear that Mr. Gensler would take a hard-line approach. In July 2021, he met with a group of industry representatives, including the leader of the Blockchain Association, a prominent crypto trade group. He bluntly informed her that most of the organization’s members were probably violating federal rules, two people familiar with the meeting said.

A few days later, Mr. Gensler called crypto “the Wild West” while speaking at a national security conference in Washington.

Rather than devise new rules for crypto, Mr. Gensler has focused on enforcing the current ones as broadly as possible. In July, the S.E.C. filed an insider-trading lawsuit against a former Coinbase employee, saying seven of the digital currencies listed on the exchange were unregistered securities. The next month, Coinbase revealed in a public filing that the agency had sent the company investigative subpoenas requesting information on its listing process.

Behind closed doors, Mr. Gensler has been equally aggressive. “I’ve heard about other groups going in and getting in arguments,” said Perianne Boring, the founder of the Chamber of Digital Commerce, a crypto advocacy group. “You want to have a fight, you can have one.”

In crypto circles, mentioning Mr. Gensler’s name elicits quivers of fury. A Twitter account for the crypto company LBRY once called him “a demon wearing human flesh.”

“I was hopeful that an M.I.T. professor who had studied cryptocurrency would have some semblance of fairness about him and not be a complete sociopath,” said Jeremy Kauffman, chief executive of LBRY, which the S.E.C. sued last year.

The basis for Mr. Gensler’s claim that cryptocurrencies are securities is a legal analysis known as the Howey Test, which the Supreme Court outlined in 1946. Under the framework, a financial product is deemed a security when it offers the chance to invest in a “common enterprise” with the expectation of profiting from the efforts of others.

Over decades, the courts have ruled that securities law applies to a wide variety of financial products, including contracts for the sale of chinchillas. Mr. Gensler has publicly stated that Bitcoin is not a security, because no central group or individual controls it. But he has hinted that Ether, the second-most-popular digital currency, might be a security and has repeatedly argued that hundreds of smaller tokens should fall under the S.E.C.’s jurisdiction.

“It’s just straightforward,” he said in the interview last month. “The rules are on the books already.”

The crypto industry has countered that the S.E.C. is trying to shoehorn digital currencies into an outdated framework. In July, Coinbase submitted a 32-page petition to the S.E.C., making the case that existing registration rules don’t cleanly apply to crypto exchanges.

Within the agency, Mr. Gensler’s approach has sometimes led to frustration, two people familiar with the S.E.C. said. In meetings, staff members have pointed out the difficulty of extending federal securities law to cover crypto exchanges, one person said. Other S.E.C. employees have complained that Mr. Gensler hasn’t moved aggressively enough, another person said, with exchanges like Coinbase and FTX having avoided significant fines.

FTX’s collapse has unleashed a new level of scrutiny. Screenshots of Mr. Gensler’s public meeting schedule, which show multiple sessions with Mr. Bankman-Fried, have circulated on Twitter, where crypto fans who once said Mr. Gensler was overly aggressive have now accused him of cozying up to a criminal. (Mr. Bankman-Fried has not been charged with any crimes.)

They argue that an S.E.C. deal with FTX would have granted the exchange a “regulatory monopoly,” allowing Mr. Bankman-Fried to dominate the cryptocurrency market while other businesses were shut out. (Some details of Mr. Gensler’s meetings with FTX were previously reported by Fox Business.)

But much of the criticism has been opportunistic, said Lee Reiners, a crypto expert who teaches at Duke University Law School.

“If you don’t like him, you don’t like the current S.E.C., then of course you’re just going to blame him, regardless of the facts,” Mr. Reiners said. “If Sam Bankman-Fried tried to get a meeting with the S.E.C., and Gary Gensler said absolutely not, I’ll never talk to you, the Republicans would’ve gone ballistic prior to the collapse.”

In public remarks shortly after FTX imploded, Mr. Gensler argued that too many crypto companies performed multiple financial roles at the same time — like running an exchange and making trades, an apparent reference to the close relationship between FTX and Alameda.

“Why we often separate these things out is so that the public is better protected about the inherent conflicts,” he said. “It’s really important to make sure that this field comes in, gets registered, gets regulated.”

Much of Mr. Gensler’s agenda may ultimately hinge on the ruling in the Ripple suit, which the S.E.C. filed in December 2020. Before the filing, Ripple’s signature token, XRP, was the third most valuable cryptocurrency; it has dropped down the rankings since the S.E.C. labeled it a security.

The outcome will also draw attention in Congress, where a slate of crypto-related bills was introduced this year. When Mr. Gensler testified in front of the Senate Banking Committee in September, he was grilled by Republican senators, who said the S.E.C. was offering insufficient legal guidance to crypto companies that wanted to comply with federal law.

“Not liking the answer from the S.E.C.,” he shot back, “doesn’t mean there isn’t guidance.”

0 comment
0 FacebookTwitterPinterestEmail
Business

News Corp Investors Raise Concerns About Proposed Merger With Fox

by SITKI KOVALI
written by SITKI KOVALI

An activist investor escalated its pressure on News Corp on Sunday, asking it to reconsider a proposal by Rupert Murdoch to combine the two parts of his media business, News Corp and Fox.

The investor, Irenic Capital Management, said in a letter to News Corp, which was viewed by The New York Times, that it might vote to oppose the merger, arguing that the proposed deal is likely to undervalue News Corp.

“We want to be clear: Walking away from a potential transaction is better than agreeing to a deal that fails to maximize News Corp’s value,” Irenic said in the letter, which was addressed to the special committee of independent board members evaluating the merger proposal.

Irenic owns about 2 percent of News Corp’s class B shares, according to the letter. Those shares confer stronger voting rights than the more numerous Class A shares.

Along with the letter, Irenic sent an email asking to meet with the special committee to share its views and those of other shareholders.

It’s the second time Irenic has requested a meeting. Last month, Irenic did so as it urged News Corp to explore splitting its online real estate listings unit from its other businesses, including The Wall Street Journal, HarperCollins and The New York Post. It said in its letter on Sunday that it also wants News Corp to consider spinning off its Dow Jones media properties. The firm contends that News Corp’s stock, now trading at $18 a share, could be worth $34 a share. It is being advised by executives including Jon Miller, a former chief digital officer of News Corp.

The letter is aimed at putting pressure on the special committees that both Fox and News Corp have appointed to evaluate Mr. Murdoch’s proposal. He has significant say in the matter: The Murdoch Family Trust, which Rupert Murdoch controls with his eldest children, commands roughly 40 percent of the vote at both Fox and News Corp through its more powerful Class B shares. But any deal requires the approval of a majority of investors who are not part of the Murdoch trust.

Irenic isn’t the only News Corp investor raising questions. Will Granger of Airlie Funds Management said in an interview that he wasn’t convinced the two companies would be better together.

“We don’t see much of a commercial rationale for the deal,” Mr. Granger said. “Does The Wall Street Journal gain by having Fox attached to it? That’s not obvious to me.”

Airlie owns a small stake in News Corp’s total share base, Mr. Granger said. His argument was similar to Irenic’s, saying Airlie would not support a merger unless Fox paid a significant premium to News Corp’s stock price or did another deal at the same time, like selling off News Corp’s real estate business.

News Corp’s largest minority shareholders, T. Rowe Price and Vanguard Group, which collectively own about 20 percent of the company’s Class A shares, did not respond to a request for comment.

News Corp declined to comment.

The deal between News Corp and Fox, if it goes through, could put a collection of news and entertainment assets including Fox News, The Wall Street Journal, the Fox broadcasting network and TMZ under the same corporate umbrella. Mr. Murdoch has said he sees cost-saving and moneymaking opportunities in joining the two companies, including ways to use the company’s assets for emerging business lines across the two companies, such as sports betting.

Since the two companies split in 2007, the industry has gone through a wave of consolidation to compete with streaming giants like Netflix and combat the decline of the traditional TV business.

“Scale is important,” Lachlan Murdoch, the chief executive of Fox and Rupert Murdoch’s oldest son, said in November. “Scale lends flexibility in many ways.”

The proposal would split ownership among stockholders based on the market value of each company, though it did not suggest a proposed valuation for the companies.

The move took some in the media industry by surprise, since Rupert Murdoch had once argued that his assets were better off in separate companies.

In a note to investors last month, the analyst firm MoffettNathanson said that it expected Fox might sell someday, “just not like this!” The note said MoffettNathanson was concerned that the collection of assets could confuse investors, affecting the value they place on a combined company.

Shares of News Corp are down about 20 percent over the past year, giving it a market valuation of $10 billion. Shares of Fox are also down about 20 percent, giving it a market valuation of $16 billion.

Benjamin Mullin contributed reporting.

0 comment
0 FacebookTwitterPinterestEmail
Uncategorized

Review: In ‘Sandra,’ a Search for a Friend Leads to Self-Discovery

by SITKI KOVALI
written by SITKI KOVALI

David Cale’s new play, “Sandra,” is packed with classic thriller tropes, as if he had challenged himself to cram as many of the genre’s staples as possible into a 90-minute show — I kept waiting for someone to transfer information from a computer to a USB key as seconds ticked by.

Though this tale of a woman’s search for a missing friend is built using basic potboiler blocks, “Sandra,” which opened Sunday at the Vineyard Theater, is far from generic.

Cale is operating, as he has been for over 35 years, within the parameters of the monologue — a style demanding of writer and actor, and not one usually associated with white-knuckle suspense. He also weaves in the themes that have long permeated his work, including the way people reinvent themselves, often to deal with trauma, and the need for transformation in the face of adversity.

The playwright usually performs his own shows, but here he is lending his voice to another actor, as he did with his 2017 hit, “Harry Clarke,” which starred Billy Crudup and introduced Cale to a wider audience.

Marjan Neshat (“English,” “Wish You Were Here”) plays all the characters, chief among them the narrator, Sandra Jones, a woman in her 40s who owns a cafe in Brooklyn and is vaguely dissatisfied with her life. One day, a close friend, a musician named Ethan, leaves for a trip to Puerto Vallarta, Mexico; he never returns. Ethan’s compositions live on with Sandra (the lovely piano score is by Matthew Dean Marsh, Cale’s collaborator on the 2019 play with music “We’re Only Alive for a Short Amount of Time”), who listens to them often. But physically, it’s as if he has vanished off the face of the earth.

Our heroine decides to look for him, jumping on the first of several flights she will take over the course of the show. Once in Mexico, Sandra — who is separated from her husband and, perhaps, had not realized how emotionally and physically bereft she was — falls for Luca, a younger hunk. He says he’s a student, and glows with a magnetic, insouciant masculinity, with just the right amount of enticing mystery about his background. Luca is a male counterpart to the sultry sirens who have long lured film noir’s male protagonists, and at times it feels as if Cale is having great fun flipping the codes of the 1990s erotic thriller.

Though the show’s plot can seem outlandish, Neshat acts as an anchor, infusing Sandra with a perfectly calibrated balance of effortless warmth.Credit…Sara Krulwich

Leigh Silverman’s sober staging can dull the impact of the show’s suspenseful set pieces, as when Sandra surreptitiously searches a bag while its owner is in the shower, or when she stealthily records an incriminating conversation on her phone. Thom Weaver’s lighting is the great technical asset, romantically moody in the early stages of Sandra and Luca’s relationship, then suggesting the ominous chiaroscuro of film noir when the plot thickens.

Neshat mostly stays rooted to a spot, sometimes standing and sometimes sitting, and the show feels uninterested in the body as a storytelling tool. The actress is literally at the center of it all, and has been handed a thorny gift of a role that requires the protean ability to portray a variety of characters, including the manager of Sandra’s cafe, an Australian surfer dude and an older gentleman straight out of a Tennessee Williams play. She struggles to differentiate them, and even Luca does not register much as Neshat goes in and out of his accented “potpourri of a voice.”

But she shines as Sandra herself, a woman who was confident enough in her identity to name her cafe after herself but feels adrift, and defined mostly in relation to others. As far-fetched as the plot gets, Neshat is a steadying force, infusing Sandra with a perfectly calibrated balance of anxious hope and effortless warmth — her smile alone is a masterpiece of complexity, in turn melancholy, joyous, triumphant, bittersweet. We immediately understand, for instance, why Sandra throws herself into the relationship with Luca (the reverse is not as convincing).

Early on, Sandra informs us that when Ethan was about to depart for Puerto Vallarta, he told her that they were “so simpatico, if I vanish you’d probably disappear from your life too.” Yet Sandra does build herself out of Ethan’s absence, and even, ultimately, her own.

Sandra
Through Dec. 11 at the Vineyard Theater, Manhattan; vineyardtheatre.org. Running time: 1 hour 20 minutes.

0 comment
0 FacebookTwitterPinterestEmail
Uncategorized

Review: In ‘Difficult Grace,’ a Cellist Moves Beyond Classical Confines

by SITKI KOVALI
written by SITKI KOVALI

The cellist Seth Parker Woods presented an evening-long, multimedia program titled “Difficult Grace” Saturday evening at the 92nd Street Y’s Kaufmann Concert Hall. It was the full staging’s world premiere, but, as Woods remarked, he had premiered a “nucleus version” in February 2020 in Seattle; the coronavirus lockdown gave him the opportunity to rework his concept into its current form.

Woods was already a cellist of prodigious technical gifts and sharp intellect. This program has stretched him even further into performing as a spoken word artist and singer as well as instrumentalist.

Aided by the choreographer and dancer Roderick George — a childhood friend from Houston — “Difficult Grace” was a feast for the ears, eyes and mind.

In one portion of Freida Abtan’s “My Heart Is a River,” the audience sees a prerecorded video projection of two dancers as Woods plays live in front of the screen. The dancing figures straddle a cello that they are reimagining as a boat. The performer in front — actually Woods himself, with dancer Tamzin O’Garro behind — is wielding the cello bow as an oar. It’s a marvelously apt metaphor: Woods is an artist rooted in classical music, but whose cello is a vehicle that takes him, and his concertgoers, on wide-ranging journeys.

The program included works by a large roster of composers, many of whom used electronic sound design as well as live acoustic cello: Fredrick Gifford, Monty Adkins, Nathalie Joachim, Abtan, Ted Hearne, Devonté Hynes and Pierre Alexandre Tremblay. (In addition to Coleridge-Taylor Perkinson, who died in 2004.)

Gifford’s piece “Difficult Grace,” which lent its name to the entire program, included projected artwork by Barbara Earl Thomas and was inspired by Dudley Randall’s poetry. Regrettably, it was difficult to discern from the auditorium seats much of what Woods was saying during long spoken-word stretches. (Projected supertitles would be a welcome addition.) The same was true during Hearne’s work with an unprintable title, with texts by the poet Kemi Alabi. Within the most riveting section of Hearne’s piece, Woods sang and played R&B-flavored harmonies atop hip hop-inspired electronic beats.

Woods is an artist rooted in classical music, but his cello is a vehicle that takes him, and his concertgoers, on wide-ranging journeys.Credit…Richard Termine/92nd Street Y

Each composer who used prerecorded cello and electronic sound design, sometimes with on-the-spot manipulations, did so to very different aesthetic ends. Woods performed two movements from Abtan’s piece (“Opening Out” and “Seeping In”), in which the electronics and the live cello swirled around each other in haunting, echoing duets. Adkins’s gentle, cinematographic “Winter Tendrils,’‘ accompanied by an equally warmhearted film by Zoë McLean, used electronics almost like an invisible string orchestra, framing Woods’s cello in lush, glowing harmonies.

The most overtly narrative work was Nathalie Joachim’s “The Race: 1915,” which used projected images from the artist Jacob Lawrence’s “Migration Series” and texts taken from The Chicago Defender, the Black newspaper that was founded in 1905 and urged Black Americans to move northward in what became the Great Migration. Joachim’s music alternated between busy, cyclical motion and periods of meditative, slow arcs.

The most traditionally “classical” piece during the evening was a technically demanding cello sonata written by Devonté Hynes, whom certain music-loving New Yorkers may recall from his recent stint opening for Harry Styles at Madison Square Garden.

The other fully acoustic work was the third movement from Perkinson’s “Lamentations: Black/Folk Song Suite for Solo Cello,” entitled “Calvary Ostinato.” Perkinson’s music evoked centuries of Black American music, between lavish pizzicato sections which called to mind the connections between the American banjo and West African plucked string instruments and bluesy slides from note to note.

The evening ended with a powerful duet between Woods and George dancing live onstage in Tremblay’s “asinglewordisnotenough 3 [invariant].” It’s a piece that crackles with nervous, coiled energy. Woods often attacked his strings with furious intensity, while George’s dancing combined solid muscularity and sinuous movements. Somehow, all of these emotional currents found a home inside Tremblay’s score.

Difficult Grace

Performed on Saturday at Kaufmann Concert Hall, Manhattan.

0 comment
0 FacebookTwitterPinterestEmail
Uncategorized

Christie’s Pulls T. Rex From Auction, Citing Need for ‘Further Study’

by SITKI KOVALI
written by SITKI KOVALI

Christie’s said Sunday that it was withdrawing a Tyrannosaurus rex skeleton that it had been planning to auction this month in Hong Kong, where it was initially expected to fetch between $15 million and $25 million, after questions were raised about the number of replica bones used in the specimen and the way it was described in marketing materials.

“After consultation with the consignor of the Tyrannosaurus rex scheduled for sale on 30 November in Hong Kong, Christie’s has decided to withdraw the lot,” a spokesman for Christie’s, Edward Lewine, said in a statement. “The consignor has now decided to loan the specimen to a museum for public display.”

Asked about the reason for the withdrawal, Mr. Lewine said the auction house believes the specimen would “benefit from further study.”

The news came 10 days before the scheduled sale.

The T. rex, which the auction house called Shen, had been billed as the first skeleton of its species to appear at auction in Asia. A Christie’s news release touted the specimen as “museum standard” and “a world-class specimen.”

But questions about the fossil were raised in recent weeks, when a lawyer for the Black Hills Institute of Geological Research, a fossil company in South Dakota, reached out to Christie’s about similarities between Shen and another T. rex skeleton, named Stan, which Christie’s had sold in 2020 for a record $31.8 million.

Although Stan was auctioned off, the Black Hills Institute retained intellectual property rights on the specimen, allowing it to continue selling painted polyurethane casts of the skeleton, which are currently priced at $120,000 each.

Peter Larson, the company’s president, said in an interview that when he first saw a photo of Shen, the skeleton Christie’s was preparing to auction in Hong Kong, he noticed that the skull looked similar to Stan’s skull, including holes in the lower left jaw that Mr. Larson said were unique to Stan. Mr. Larson and his colleagues at Black Hills had examined the particularities of Stan’s bones over three decades after excavating the specimen starting in 1992.

Mr. Larson said that it appeared to him that the owner of Shen — who was not identified by Christie’s — had bought a cast of Stan from Black Hills to supplement the original bones.

“They’re using Stan to sell a dinosaur that’s not Stan,” Mr. Larson said in an interview with The New York Times a few days before the sale was called off. “It’s very misleading.”

On Sunday, after the decision was made to withdraw, Mr. Larson said, “Christie’s did the right thing.”

The Fine Arts & Exhibits Special Section

  • Bigger and Better: While the Covid-19 pandemic forced museums to close for months, cut staff and reduce expenses, several of them have nevertheless moved forward on ambitious renovations or new buildings.
  • A Tribute to Black Artists: Four museums across the country are featuring exhibitions this fall that recognize the work of African and African American artists, signaling a change in attitude — and priorities.
  • New and Old: In California, museums are celebrating and embracing Latino and Chicano art and artists. And the La Brea Tar Pits & Museum is working to engage visitors about the realities of climate change.
  • A Cultural Correction: After removing all references to Columbus from its collections the Denver Art Museum has embraced a new exhibition on Latin American art.
  • More From the Special Section: Museums, galleries and auction houses are opening their doors wider than ever to new artists, new concepts and new traditions.

After a lawyer for Mr. Larson’s company, Luke Santangelo, contacted Christie’s this fall with concerns that the online auction materials did not make clear to the public that the specimen included casts of Stan, the auction house added a note to its online auction materials.

“Replica bones that were added to original bones (referred to as STAN™ elements) were created by, and purchased from, Black Hills Institute of Geological Research, Inc.,” read a note added to the bottom of a web page advertising the specimen.

The auction house’s catalog confirmed that none of Shen’s teeth are original. Excavated from Montana in 2020, the bones were described in the catalog as “well-preserved and quite solid,” and with pathologies that included bite marks and osteoarthritis.

Fossil auction sales have been booming in recent years, and earlier this year, Christie’s sold the remains of a raptor for $12.4 million, more than double the auction house’s high estimate. The withdrawal is a significant loss for the auction house, which made Shen the headliner of its weeklong sales in Hong Kong that begin next week.

Nearly all dinosaur skeletons are incomplete, requiring casts of other specimen’s bones or reconstructed additions to appear whole. How much of a skeleton is fake depends on the amount of original bone.

Christie’s said in its marketing materials that Shen was “54 percent represented by bone density,” a measure that some fossil experts questioned.

The auction house’s catalog notes that the Shen specimen has about 79 original bones; the total bone count for a T. rex is not known with certainty and can vary depending on how they are counted, but some scientists have estimated that they contain 300, and others 380.

Stan, a T. rex skeleton, sold in 2020 for $31.8 million. One of the paleontologists who excavated Stan noticed similarities between its skull and that of Shen’s, the skeleton Christie’s had planned to auction this month. Credit…Ali Haider/EPA, via Shutterstock

In comparison, Stan, the specimen sold in 2020, has 190 original bones, according to research on the specimen. And Sue, the famous T. rex that was also excavated by Black Hills and auctioned off to the Field Museum of Natural History, in Chicago, has 250, the museum said, a figure that includes a set of rib-like bones across the belly that are sometimes not included in total bone counts.

Mr. Santangelo, the lawyer, said that he had urged Christie’s to alter any descriptions that were “potentially misleading the public” about Shen, including its claim that the dinosaur was “54 percent represented by bone density.”

Fossil experts had questioned the meaning of that figure, which Christie’s had earlier explained as helping to provide more weight to, for example, a massive femur bone compared to a tiny ear bone.

“Bone density has no scientific meaning whatsoever,” said Margaret Lewis, president of the Society of Vertebrate Paleontology, a professional group that vocally opposed the auction of Stan in 2020.

Auctions like this one have drawn criticism from paleontologists at museums and universities who fear that scientifically important specimens could end up privately owned and out of the reach of researchers.

John R. Nudds, one of the researchers credited with having studied Shen and a central figure in the auction house’s advertisements, acknowledged in an interview before the withdrawal that by bone count, roughly three quarters of the original bones in the specimen were casts of Stan.

Dr. Nudds, who said he retired as a lecturer in paleontology at the University of Manchester two years ago, said he did not think the existence of cast elements in Shen had been obscured.

“I don’t think that’s ever been hidden,” said Dr. Nudds, who added that he consulted on the specimen for the private owner, not Christie’s. “I think it’s pretty obvious that if a skeleton is 54 percent by bone density, then 46 percent by bone density has got to be cast — there’s no other way around it.”

David A. Burnham, a preparator in vertebrate paleontology at a University of Kansas museum, who is also identified as having studied Shen, explained in the report how he calculated the “bone density” figure. The 54 percent figure was calculated by “computing the area of each individual bone represented using measuring software,” he said.

A third author listed on the Shen report, Bruce M. Rothschild, a former research associate with the Carnegie Museum of Natural History, denied involvement in its publication, though he had offered Dr. Burnham his opinion on images of a few different T. rexes.

Dr. Rothschild said in an interview that he had believed that the specimens belonged to the University of Kansas when he offered his opinions. “I wouldn’t want to be associated with anything being auctioned,” he said in an interview.

Stan’s buyer was anonymous, but earlier this year, National Geographic reported that the dinosaur would be featured in a developing natural history museum in the United Arab Emirates.

Mr. Larson’s company has sold about 100 casts of Stan, including to the Smithsonian National Museum of Natural History, providing a significant portion of its income. He said he had been concerned that any buyer of Shen would assume the right to make and sell their own copies.

“It was jeopardizing our copyright and our trademark,” Mr. Larson said.

As the company’s lawyer negotiated with Christie’s over the past several weeks, some information in the auction house’s online materials were modified. A line in the news release about Shen being “auctioned with full rights and all soft assets relating to it” disappeared. And the $15 million to $25 million estimate was altered, reading only, “estimate on request.” Then, on Sunday, the sale was called off.

0 comment
0 FacebookTwitterPinterestEmail
Uncategorized

In Life and Music, Ned Rorem Was Unwaveringly Himself

by SITKI KOVALI
written by SITKI KOVALI

Several years ago, during one in a series of visits I made to Ned Rorem’s apartment, he said with his trademark lightness that it would be “kind of cute” to make it to 100 years old.

This composer, diarist and reluctant pioneer of gay liberation was nearing 95 at the time, and had me convinced that he would live at least another five more. Rorem has always looked young for his age, and longevity runs in his family. Scandinavian genes, he liked to say. His memory had declined, and his wit — perhaps his greatest gift — was more sanded down than sharp.

Still, he was in good health — enough, perhaps, to witness his centennial year in 2023. Which he nearly did; Rorem turned 99 last month, but died on Friday.

Occasionally, when I would mention to someone that I was planning to stop by Rorem’s apartment — a relic of the Upper West Side’s middle-class past, with a generously sprawling layout at 70th Street and Central Park West — I would hear a reply along the lines of, “He’s alive?” If he was talked about at all, it was as distant history: as a fixture of the post-World War II Parisian arts scene; as an unabashed and brazenly open gay man in a time when that could end a career; as a winner of the Pulitzer Prize for music, nearly 50 years ago.

“Yes, he’s very much alive,” I would say. That might have been an overstatement. Rorem’s twilight, like that of his peers, was a modest and quiet one. His niece Mary Marshall was his soft-spoken yet proud caregiver. Together, they would go for brief walks in Central Park and do the New York Times crossword puzzle; she would refill his cups of ginger ale and, especially on his birthdays, repeatedly remind him of his age and name.

Sometimes, he would play the piano, mostly his own compositions. The instrument was covered in stacks of scores, which also accumulated nearby with a collection of boxes bound for the Library of Congress, where his archive is held. The informal price of admission to this space was cookies, Rorem’s favorite snack; when feeling extravagant, I would stop at Magnolia or Levain bakeries on the way. It never seemed like enough, because to enter his salon was to take an invaluable leap back in time. Here, you could hear dishy stories about legends like Bernstein and Poulenc, or get feedback from a living composer on music written in the 1940s. The walls were a museum of portraits of him by the likes of Dora Maar and Jean Cocteau, alongside works by Degas and Klimt.

The art collection came from Rorem’s time in Paris, where he lived throughout most of the 1950s, taken care of by the Vicomtesse Marie-Laure de Noailles. He hobnobbed with Alice B. Toklas, Picasso, Dalí and more luminaries of the day. He wrote music with an American heart but a French sensibility; it belonged to no particular school of thought or trend, but was simply what Rorem wanted to say. On his way out of Paris, he once told me, he took a score from the vicomtesse: a copy of Kurt Weill and Bertolt Brecht’s “Der Jasager,” with an inscription by Weill. Rorem would later write his own English translation under Brecht’s text, casually creating a performance edition for his students that I read in his living room; it’s begging to be published today.

He had charmed the vicomtesse just as he had charmed everyone else — with gleeful self-awareness. Youthful and disarmingly handsome, he ingratiated himself with the leading American composers of mid-20th century, particularly the gay ones: Bernstein, Copland, Barber, Virgil Thomson. It’s this confidence that makes his diaries such a pleasure to read; first came the Paris and New York volumes, which cover 1951-61, and they continued over several more installments, up to 2005.

These books are unusually candid, whether about his prolific sex life (later replaced by routine masturbation) and recurring anxieties. In “Lies: A Diary,” from 1986 to ’99, the AIDS crisis is peripheral then personal; the death of his partner, the organist James Holmes, from the disease is documented in almost unbearably incremental detail.

As a body of work, the diaries are spiritual cousins of and precursors to novels by Edmund White, with their undisguised sexuality, and Andrew Holleran, with their uniquely gay wit. They came not long after books like Gore Vidal’s “The City and the Pillar,” Truman Capote’s “Other Voices, Other Rooms” and James Baldwin’s “Giovanni’s Room” — literature catered to a straight audience, and teeming with shame.

Rorem refused to connect himself to that lineage, over the years and in conversations with me. “I’m not a propagandist,” he once said. “I just wrote about it because, so what? I didn’t understand why anybody, including my parents, was particularly impressed.” It was here, not for the first time, that I found myself disagreeing with him. The diaries don’t have the political fervor to be a keystone of gay liberation, but they provided crucial support for it nevertheless.

I also often found myself furrowing my brow whenever Rorem would talk about his own music. Artists, like the clarinetist Thomas Piercy and the pianist Carolyn Enger, would stop by his apartment — with a treat, of course — to play his works. Mostly, Rorem would encourage them to play the score as directly as possible, to not interpret it. But that’s the core of performance, and of revelation.

Then again, Rorem didn’t seem to care about having the right opinion, or the “right” style. His music has never been in fashion, and may never be — he was open about not aspiring to be a Beethoven — but it rewards those who seek it out. “Air Music,” for which he won the Pulitzer, is a work of impressive craft and allure, though I am partial to the piano pieces: the sparking Toccata from his First Sonata, and the sweet miniatures he wrote for loved ones, collected in the Piano Albums.

His legacy will almost certainly be in his art songs, which are unmatched in the American canon in their appreciation and understanding of the contours of the English language. (Rorem also wrote two operas, the second of which, a 2006 adaptation of Thornton Wilder’s “Our Town,” is a tastefully restrained echo of the play’s text that has found a home on smaller stages but deserves bigger ones.) After I wrote a profile of Rorem for his 95th birthday, a young composer said on Twitter that there wasn’t a better song than “The Lordly Hudson.” Schubert’s lieder will always reign supreme, but it’s hard to disagree.

Especially in conservatories, Rorem’s songs thrived, even as his profile waned. His friends and peers were gone; “I wish everyone would stop dying,” he told me. He stopped writing, both scores and prose. In conversation, he would repeat some of the more comically extreme opinions that course through his books, like the belief that everything in the world is either French or German. Music is French or German; women are French and men are German; blue is French and red is German.

But in his 90s, Rorem said, he didn’t feel the urge to add to his already enormous output. After all, he told me, “I’ve kind of said everything I have to say, better than anyone else.”

I held out hope that this wasn’t true. But one afternoon, as I was visiting him and running late for a black-tie event at Lincoln Center, he let me change in his bedroom to save time. While there, I noticed a notebook on his night stand. Curiosity — the question of whether this could be a new volume of diaries in the making — got the best of me, and I opened it up.

Inside were only doodles and fragments, with no discernible order. So it was true. All we were, and are, left with is what came before: nearly a century’s worth of memories and music.

0 comment
0 FacebookTwitterPinterestEmail
Business

The Week in Business: FTX’s Collapse

by SITKI KOVALI
written by SITKI KOVALI

Credit…Giacomo Bagnara

What’s Up? (Nov. 13-19)

Crypto Chaos

In the course of days, the collapse of one of the largest cryptocurrency exchanges, FTX, has led to a series of revelations — about the corporate dysfunction inside FTX, the entangled personal lives of the people who ran it and what the exchange’s new leader said appeared to be efforts to “conceal the misuse of customer funds.” The company has filed for bankruptcy, and federal prosecutors are now investigating what happened to the lost funds of possibly more than one million creditors. The downfall of Sam Bankman-Fried, the founder and former chief executive of FTX, has called into question the future of the crypto industry as well as that of a closely affiliated movement in which he heavily invested. That movement was centered on a moral philosophy known as effective altruism, and it financed itself in large part with donations from FTX’s philanthropic arm.

11 Years for Elizabeth Holmes

Elizabeth Holmes was sentenced to more than 11 years in prison on Friday, after being convicted on four counts of defrauding investors about the technology and business practices of Theranos, her failed blood-testing start-up. It was a lighter sentence than the maximum 20 years in prison she faced but still far tougher than the 18 months of house arrest her lawyers had sought. The decision was delivered by the same judge who oversaw Ms. Holmes’s trial last year, and in making it, he considered a cache of letters and documents filed by lawyers and prosecutors for the case. Included among them were family photos of Ms. Holmes, her partner, Billy Evans, and their son, as well as comments from figures like Senator Cory Booker, who praised Ms. Holmes’s “determination to make a difference.” Her critics viewed the case as an opportunity to send a message to other tech founders who may distort the truth in their quest for success in an industry where few executives are ever found guilty of fraud.

Twitter Turmoil, Continued

Given the ultimatum to leave Elon Musk’s Twitter or to stay at the company and “build a breakthrough Twitter 2.0,” some 1,200 employees appeared to choose to go on Thursday. They tendered their resignations hours before the 5 p.m. Eastern deadline that Mr. Musk set the day before in an email with the subject line, “A Fork in the Road.” The remaining staff, Mr. Musk wrote, would have to be “extremely hard core” and work long hours at a high intensity. Because the departures came on the heels of mass layoffs of about half of the company’s employees, there are growing questions about how the site will hold up. Vast swaths of Twitter’s work force have been eliminated, like the communications department, which no longer exists, and the platform’s infrastructure teams, which are virtually nonexistent. On Friday, Mr. Musk asked “anyone who actually writes software” to report to the 10th floor of Twitter’s headquarters.

Credit…Giacomo Bagnara

What’s Next? (Nov. 20-26)

Let the Shopping Begin

There is much to suggest that despite the crushing inflation consumers experienced this year, many intend to shop enthusiastically this holiday season. Retail sales rose 1.3 percent last month, beating expectations, as retailers like Amazon, Target and Kohl’s offered earlier-than-usual holiday deals. The rise in sales coincided with the first signs of moderating inflation: In October, prices climbed 7.7 percent from a year earlier, still a quick pace but down from 8.2 percent in September. But shoppers’ zeal for holiday sales indicated that they were looking for discounts, adding to the pressure on retailers — who not that long ago wielded more power to price products as they pleased — to lower prices. At Target, for example, demand tapered off when those sales ended. What has changed from last season? Consumers had more money saved in 2021, and were spending on clothes and electronics as they emerged from pandemic lockdowns. This year, customers have been much more worried about rising prices and have cut down on discretionary spending.

A Look at the Fed’s Thinking

The Federal Reserve will release the minutes from its November meeting this week, providing potential clues about whether policymakers intend to slow the pace of interest rate increases. Earlier this month, the Fed raised rates by three-quarters of a percentage point, the fourth consecutive increase of that size, and sent some mixed messages about the path ahead as it explained the decision. While the central bank said in a policy statement that officials would soon slow down the rate increases, Jerome H. Powell, the Fed chair, later said at a news conference it was “very premature” to consider a pause, keeping the Fed’s options open for its next move.

Rail Unions Vote

Two large rail unions are expected to vote this week on the tentative agreement that was struck in September to avert a strike that would have thrown already mangled supply chains into chaos, worsened inflation and disrupted travel. The possibility of that strike still looms: Rail workers and their employers have been at odds over unrelenting and unpredictable schedules, and strict attendance policies that make it difficult to attend to personal matters, like doctor appointments, or risk penalties. And some workers don’t see many gains on those fronts in the proposed agreement, which added only a single day of paid personal leave. A few unions have already rejected it. The votes this week will not decide whether a strike is likely in December, but they will offer a sense of whether opposition to the contract is beginning to crystallize.

What Else?

Amazon plans to lay off about 10,000 people in corporate and technology jobs, adding to the string of layoffs in the tech industry. Inflation in Britain reached 11.1 percent in October from a year earlier. Workers at dozens of Starbucks locations went on a one-day strike on Thursday, protesting what they said are anti-union tactics from the company.

0 comment
0 FacebookTwitterPinterestEmail
Business

Cigars, Booze, Money: How a Lobbying Blitz Made Sports Betting Ubiquitous

by SITKI KOVALI
written by SITKI KOVALI

A RISKY WAGER

Cigars, Booze, Money: How a Lobbying Blitz Made Sports Betting Ubiquitous

Lobbyists kept tabs on sports betting legislation in Kansas in April.Credit…Amir Hamja for The New York Times

The gambling industry and its allies got their way with lawmakers after showering them with donations, gifts and dubious arguments.

By Eric Lipton and Kenneth P. Vogel

Nov. 20, 2022

TOPEKA, Kan. — Representative John Barker, a cattle breeder, retired judge and chairman of one of the most powerful committees in the Kansas legislature, had a glass of 30-year Redbreast Irish whiskey in his hand and a Don Tomas cigar from Honduras in his mouth.

Both had been passed to him as he entered a party a few blocks from the State Capitol. It was co-sponsored by lobbyists who had recently turned to Mr. Barker for help legalizing sports betting in Kansas.

“They keep a special bottle for me up there — they know I like it,” he said of the lobbyists as he surveyed the crowded room. “I’m in my element when I have a whiskey and a cigar.”

It was the eve of the vote on Mr. Barker’s long-debated gambling bill, a muggy spring night in April. This was the latest stop in a relentless nationwide campaign to bring sports betting to tens of millions of mobile phones, in what has been the fastest expansion of legalized gambling in American history.

Less than five years ago, betting on sports in the United States was prohibited under federal law except in Nevada casinos and a smattering of venues in other states. Sports leagues argued that the ban safeguarded the integrity of American sports, while consumer watchdogs warned that legal gambling could turn fans into addicts. In countries like Britain, sports gambling free-for-alls had left trails of addiction.

But in 2018, the Supreme Court ruled that the federal prohibition was unconstitutional.

DraftKings and FanDuel, giants in the fast-growing field of fantasy sports, had already mobilized an army of former regulators and politicians to press for sports betting in state capitals. Soon, in a crucial reversal, sports leagues overcame their antipathy toward gambling, which they came to see as a way to keep increasingly distracted audiences tuned in. Casino companies also hopped on board.

It was a market, the industry hoped, that could be worth billions a year. And so they set out to seize it.

Representative John Barker enjoys a cigar and whiskey at a lobbyist-sponsored event.
Credit…Photographs by Amir Hamja for The New York Times

Gambling companies and their allies deployed a bare-knuckled lobbying campaign, showering state lawmakers with money, gifts and visits from sports luminaries and at times using deceptive arguments to extract generous tax breaks and other concessions, according to a New York Times investigation. It was based on thousands of pages of documents and communications obtained in part through open-records requests and interviews with dozens of industry and state officials.

Industry lobbyists, for example, dazzled lawmakers with projections about the billions of dollars that states could expect to collect in taxes from sports betting — projections that, at least so far, have often turned out to be wildly inflated, according to a Times analysis of state tax data.

The gambling industry managed to scare state lawmakers into keeping tax rates low, in part by trotting out data about a sprawling underworld of illegal gambling. The Times found that those figures, which suggested that Americans were placing as much as $400 billion of illicit bets each year, were unreliable.

In state after state, while lobbyists for sports-betting firms, casino companies and professional leagues cultivated friendly relationships with lawmakers and regulators, the interests of taxpayers and people at risk of gambling problems were often on the back burner, if they were represented at all.

“We don’t have the manpower that the industry does,” said Brianne Doura-Schawohl, a lobbyist for the National Council on Problem Gambling who has been in more than two dozen state capitals as lawmakers voted on sports-betting packages. “They have gaggles of lobbyists in every state.”

The results of the lobbying campaign have been stunning: 31 states and Washington, D.C., permit sports gambling either online or in person, and five more have passed laws that will allow such betting in the future.

Many of those states did so on terms that were remarkably favorable to the gambling industry.

Few imposed restrictions on companies using promotional offers — such as “risk-free” wagers, in which customers are reimbursed for losing bets — to lure neophyte gamblers. Those tactics have been banned in some countries because of their potential to hook people predisposed to compulsive gambling.

In 18 states, however, the promotions are not only permitted. They are also tax deductible, allowing gambling companies to exclude at least some of the cost of the freebies from their taxable income. In other words, state governments are subsidizing the promotions.

In various states, the gambling industry helped defeat a measure to ban betting ads during sports broadcasts, pushed through legislation that included minimal funding to fight gambling addiction and derailed a bill to stop two companies run by the same woman from offering both sports bets and payday loans.

Even some of the industry’s onetime backers now say that they paid insufficient attention to the risk that gambling would cause waves of addiction.

The vast and largely unopposed influence of the gambling lobby has been on especially stark display in Topeka this year.

Lawmakers in Kansas rewarded major political donors, some of whom used networks of shell companies and political action committees to skirt campaign finance laws, with legislative handouts and lucrative licenses.

The same month that Mr. Barker was enjoying lobbyists’ cigars and whiskey, he was also inserting provisions into the gambling legislation that would transform an already generous bill into what some supporters acknowledged was an outrageous giveaway.

And at the industry’s behest, Kansas lawmakers halved the tax rate on gambling companies’ revenue. Even as Kansans placed $350 million of bets this fall, the state collected less than $271,000 in taxes.

“These states have leverage — they are just getting outmaneuvered,” said Joe Weinert, executive vice president at Spectrum Gaming Group, which analyzes the gambling industry. “The legislators have a fiduciary responsibility to the taxpayers to get the maximum amount possible. But these companies are just laughing all the way to the bank.”

The rapid rise of online sports betting has radically changed how millions of people consume sports and enabled them to legally engage in potentially addictive behavior from the comfort of their living rooms.

In the first half of this year, Americans placed an average of nearly $8 billion per month in legal sports bets, compared with less than $1 billion a month three years earlier, according to SportsHandle, a trade publication. By 2026, some analysts predict, the average could hit $20 billion a month.

Ads for sports-betting apps blanket the airwaves and emblazon the walls of stadiums and arenas, some of which let fans place bets at in-person kiosks.

Ads for DraftKings adorn Fenway Park in Boston. Credit…Amir Hamja for The New York Times

During game broadcasts, betting odds scroll across screens and ads cajole viewers to wager on the outcomes.

One sports network is now named for a gambling company, while another is operated by one. Some hosts and reporters spend as much time covering betting on sports as they do covering the sports themselves.

Top NASCAR drivers and their teams are paid to promote sports betting; professional baseball and hockey players recently won their leagues’ blessings to sign their own endorsement deals.

Gambling companies and their partners say this shift is providing states much-needed revenue and sports leagues with more-engaged fans at a time of dwindling viewership.

But the gambling industry views sports betting as a steppingstone to an even loftier ambition: the legalization of online casino gambling, in which Americans would be able to wager on poker and other games anywhere with an internet connection. Six states already permit some so-called iGaming, and lobbyists are pressing more states to follow suit.

“It is time for your state to add iGaming,” Jason Robins, the chief executive of DraftKings, told lawmakers at a recent conference that his company sponsored. “Not in the future, but now.”

A Risky Wager

How online sports betting took America by storm.

  • Bare-Knuckled Lobbying: The gambling industry and its allies showered lawmakers with donations, gifts and dubious arguments. The results have been stunning.
  • A ‘Degenerate Gambler’: The influencer David Portnoy is known for his misogynistic and racist behavior. A deal with a casino company turned him into the industry’s newest spokesman.
  • Promoting Gambling on Campus: Universities are negotiating lucrative deals with betting companies, agreeing to introduce their students and sports fans to online gambling.
  • A Patchwork of Regulations: Government oversight of sports betting offers scant consumer protections and relies on the industry to police itself. That poses risks for public health.

A Fateful Radio Ad

FanDuel offices in New York City.Credit…Michael Nagle for The New York Times

If you had to pick a moment when the campaign to convince states to legalize sports betting started taking shape, you might choose the day in 2014 when a lobbyist named Jeremy Kudon heard a radio ad about how people could win a “boatload of money” through fantasy sports.

A sports fanatic, Mr. Kudon worked at the international law firm Orrick. His specialty was helping young industries navigate regulatory and legislative challenges in state capitals. He had battled the cable industry on behalf of the satellite television companies Dish Network and DirecTV. Now he was looking for his next fight.

Fantasy sports — in which people select real professional athletes for imaginary teams that compete based on the statistical performances of players in actual games — had been around for years. But companies like FanDuel and DraftKings were turning it into a big business by allowing people to stake money on their fantasy teams.

The trouble was that by introducing money into the equation, fantasy sports appeared to be crossing the line into sports gambling, which was illegal in most states.

Mr. Kudon pitched FanDuel, whose radio ad he had recently heard, on a strategy to pre-emptively affirm the legality of its service. FanDuel, founded in 2009 after a group of acquaintances hatched the idea at the South by Southwest festival in Texas, hired him. Next, Mr. Kudon signed up DraftKings, which three friends had started in a Massachusetts apartment in 2012.

“We needed a national strategy,” Mr. Kudon said in an interview, recalling his thought process at the time. “We need to go out there and pass 10, 15 bills and get ahead of this.”

An early step was to recruit — and pay — experts to argue to state officials that fantasy sports was not gambling.

One expert paid by DraftKings, Abraham J. Wyner, a University of Pennsylvania statistics professor, testified that in fantasy sports, “players with the most skill will usually and consistently defeat players with less skill.” By that logic, fantasy sports didn’t constitute gambling, which many states defined as a “game of chance.”

The DraftKings chief executive, Jason Robins, center, and the lobbyist Jeremy Kudon, seated next to him, attended a conference with state lawmakers in July.Credit…Amir Hamja for The New York Times

Mr. Kudon and his clients assembled an all-star team of lawyers and former government officials, including Martha Coakley, who had been the attorney general of Massachusetts. In testimony to and conversations with state officials, Ms. Coakley and other lobbyists cited arguments made by the industry-bankrolled studies and legal memos.

“We firmly believe that this is a game of skill that is legal in Massachusetts,” Ms. Coakley told the state Gaming Commission, which proceeded to permit fantasy-sports contests with money riding on the result.

And they began doling out millions in campaign contributions. Since 2016, FanDuel and DraftKings alone have donated more than $2.6 million to state politicians and political parties, according to data maintained by OpenSecrets, a campaign finance watchdog. The companies have spent another $114 million to try to influence state ballot measures to legalize sports betting.

By the end of 2017, 19 states had passed bills legalizing fantasy sports. Almost all were written with help from Mr. Kudon’s team. Most other states continued to allow fantasy sports, without explicitly authorizing it.

In Open Defiance

Chris Christie, the former New Jersey governor, outside the Supreme Court in 2017.Credit…Alex Wong/Getty Images

As Mr. Kudon pushed to permit fantasy sports, a legal battle was underway in New Jersey that would determine whether his clients and others would be able to offer full-fledged sports betting.

In 2012, the state’s governor, Chris Christie, signed a bill to legalize sports betting. The goal was to revitalize Atlantic City, whose once-bustling boardwalk casinos were struggling.

But the New Jersey act was in open defiance of a federal law that banned sports betting outside Nevada and a few other locations.

The major U.S. sports leagues, as well as the National Collegiate Athletic Association, sued to strike down New Jersey’s law. They argued that sports betting could cast suspicions on the integrity of athletic competitions.

The Justice Department sided with the leagues in defense of the federal ban.

At the time, the casino industry was divided over whether to support online gambling. The success of DraftKings and FanDuel persuaded more traditionalists that the days of brick-and-mortar dominance were all but over.

“Fantasy sports had shown us just what the potential was,” said Geoff Freeman, who ran the American Gaming Association, a trade group largely composed of casinos, from 2013 to 2018. “We knew we needed to get smarter.”

Mr. Freeman assigned staff to study the potential for traditional casinos to get into online sports betting. The group soon released a study claiming that widely available sports betting could lead to more than 200,000 jobs in the United States.

The gambling association joined New Jersey in defending its law. The state had already lost six times in various federal courts. Then, in June 2017, the U.S. Supreme Court agreed to hear the case.

Betting on Pitch Speeds

Fenway Park in Boston. Major League Baseball had long opposed sports betting but reversed its stance.Credit…Amir Hamja for The New York Times

If the high court ruled in New Jersey’s favor, the battle would shift to state capitals — familiar turf for Mr. Kudon, thanks to his years of lobbying for fantasy sports.

The biggest potential hurdle were the sports leagues, Mr. Kudon believed. For a century, the leagues had regarded gambling as radioactive, arguing that the federal ban safeguarded the integrity of American sports. For Major League Baseball in particular, there was a history of scandals involving people like Pete Rose, who was caught betting on his team’s games.

In 2017, Mr. Kudon visited Major League Baseball’s headquarters in Manhattan with Mr. Robins, the chief executive of DraftKings, according to people familiar with the meeting. The league, Mr. Robins argued, should join forces with DraftKings and FanDuel. Sports betting was coming, so baseball executives might as well push to legalize it in a manner that granted them some control — and cash.

Some of the executives were receptive. The league’s chief legal officer, Dan Halem, noted that one of the sport’s weaknesses — the slow pace of its games — could become a strength. The longer games lasted, the more opportunities there would be for in-game betting on things like the speed of an upcoming pitch.

The meeting ended with promises to stay in touch.

On Dec. 4, 2017, the Supreme Court held oral arguments in the New Jersey case.

Comments from the justices — including Chief Justice John G. Roberts, who in private practice had represented the American Gaming Association — suggested they were likely to overturn the federal ban.

Mr. Kudon was in the audience, sitting on a wooden bench alongside Mr. Robins. Outside the court afterward, he bumped into Mr. Halem of Major League Baseball.

“We owe you a call,” Mr. Halem told Mr. Kudon.

That follow-up soon came.

Four weeks later, on New Year’s Day, Mr. Kudon signed a deal to represent the M.L.B. and N.B.A. It was a coup: At the same time that the leagues were publicly fighting against sports betting at the Supreme Court, they had found common cause with gambling companies that were pushing state lawmakers to allow exactly that. (The Professional Golfers Association Tour would soon hire Mr. Kudon, too.)

In May 2018, the Supreme Court struck down the federal ban on sports gambling, ruling it infringed on states’ rights. It was the moment Mr. Kudon and his clients had been preparing for.

Crowds gathered at Monmouth Park racetrack on June 14, 2018, the first day New Jersey permitted sports betting.Credit…Rick Loomis for The New York Times

They had already been working with lawmakers in numerous states who were eager to hobnob with current and former sports officials who had been star players.

Lawmakers in states like West Virginia passed “trigger laws” to authorize sports betting as soon as the court’s ruling came down. Lawmakers in other states also introduced sports-betting legislation.

Baseball and basketball leagues, sensing an opportunity to make money, had their own set of demands.

One was that they wanted betting companies to be required to use data from the sports leagues. The leagues could then charge for that data.

In Michigan, the leading champion of sports betting in the legislature was Representative Brandt Iden. He was among a group of lawmakers whom the P.G.A. Tour hosted at its headquarters in Ponte Vedra Beach, Fla., for golf, dinner and drinks.

Mr. Iden and his colleagues met there with officials from the tour, the N.B.A. and M.L.B., as well as lobbyists from Mr. Kudon’s team, who urged them to require betting companies to use the leagues’ data. Months later, Mr. Iden included that mandate in the bill he introduced. (He did not respond to requests for comment.)

The bill passed and would become a model in other states. Online sports betting got underway in Michigan in January 2021. Mr. Iden left the legislature and became the top lobbyist for Sportradar, which provides data from the leaguesto gambling companies.

Flimsy Figures

Adam Silver, the N.B.A. commissioner, called for the legalization of sports betting in 2014.Credit…Damon Winter/The New York Times

To persuade on-the-fence state lawmakers to board the sports-betting bandwagon, the gambling industry disseminated data about how much tax revenue states could expect to receive and how much gambling was already taking place outside of state supervision in illegal markets.

But the statistics, published in opinion pieces, consultants’ reports, testimony and legislative filings, do not hold up under scrutiny, The Times found.

An estimate that gained especially widespread traction was that Americans illegally wagered up to $400 billion on sports each year.

Adam Silver, the N.B.A. commissioner, mentioned it in a Times opinion piece. A Pennsylvania lawmaker cited it to argue that the legalization of sports betting “will simply enable Pennsylvania to regulate a multimillion-dollar industry that already exists.” In West Virginia, lawmakers included a variation of the estimate in a bill to legalize sports betting.

Where did the eye-popping figure come from? The N.B.A. and the American Gaming Association identified the source as a 1999 report by the National Gambling Impact Study Commission, which Congress created to assess the harms of gambling.

“Estimates of the scope of illegal sports betting in the United States range anywhere from $80 billion to $380 billion annually,” the report said.

In a footnote, the report attributed the range not to an academic study or even an industry analysis, but to an Associated Press article from the month before the report was released. That article, in turn, reported that “commissioners were told” the estimate, though it did not indicate by whom.

A transcript from a commission hearing in 1998 points to the likely source. One of the panel’s commissioners, citing unidentified testimony and staff briefings, said that “there’s somewhere, depending on whose guesstimate you take, within $80 to $380 billion worth of illegal sports gambling.”

“The number is pretty much pulled from the air,” said Koleman S. Strumpf, an economics professor at Wake Forest University who has studied illegal gambling. He said he regretted having cited the figure in a 2003 paper. He added that he stood by one of the paper’s conclusions: that illegal sports betting would continue even if sports gambling were legalized.

The American Gaming Association also issued projections of how much tax revenue each state could expect to collect if it legalized sports betting. The estimates were regularly cited during debates in state capitals.

At least so far, many of the projections have turned out to be overly optimistic, according to a Times analysis of state tax revenue through this summer.

The association’s consultants predicted, for example, that Virginia could expect to collect an extra $57 million a year in tax revenue if it legalized mobile sports betting and applied a 15 percent tax rate. That is what Virginia did, but in the most recent 12 months of betting, the state collected only $38 million.

Other states with large shortfalls included Connecticut, Michigan, West Virginia and Wyoming. Overall, in the 14 jurisdictions that allow mobile sports betting and that have tax rates in the range anticipated by the gambling association, tax revenues over the last 12 months have been nearly $150 million below the $560 million the group predicted, The Times found.

The association defended its estimates. It noted that it had at times cited lower estimates for the size of the illegal gambling market. And the group argued that it was too soon to tell how much would be bet or how much states would collect in taxes in the future and that as the market matured, tax revenues would rise. The association also said that some states’ restrictions on betting on college sports resulted in lower-than-expected revenue.

But one other reason for the shortfall, the group conceded, was that some states granted the gambling industry’s request for a generous tax exemption.

To lure customers into gambling, companies routinely dangle “free bets” and other promotions sometimes totaling thousands of dollars. Bettors can use those credits to make wagers without putting their own money on the line.

At least seven states, as well as Washington, D.C., agreed to let the companies fully deduct this promotional spending from their taxable income. Several other states allowed partial deductions.

In Colorado, Michigan and Pennsylvania this year, the free-bet giveaways were so generous during February — the month of the Super Bowl — that the promotional spending exceeded many platforms’ revenues, resulting in them facing, at most, minuscule tax bills that month, according to SportsHandle.

The sports-betting industry has doled out nearly $1 billion in promotional bets over the last year — costing states more than $120 million in potential taxes, according to an analysis of the data by The Times and Vixio, a gambling industry compliance company. Frustrated at the scale of tax losses, several states, including Virginia and Colorado, either capped or began phasing out the exemptions this year.

The analysis by The Times shows that a few states — including New York, which in the first 10 months of the year raked in $545 million in tax revenue from online sports betting — collected far more than the industry anticipated. The common thread: All of those states rejected the industry’s advice to tax gambling companies’ revenue at 10 percent. Instead, they applied rates as high as 51 percent.

The Location of the Servers

New York’s Penn Station featured ads for Caesars Sportsbook in October.Credit…Amir Hamja for The New York Times

With its huge population and more than a dozen pro sports teams, New York had been a top priority for sports-betting companies. But in 2013, voters had approved an amendment to the state constitution that authorized gambling only at seven casinos, mostly in economically struggling areas upstate.

Mr. Kudon and his team got creative. They argued to state officials that, as long as the computer servers processing bets were physically located at the state-authorized casinos, the bets should be considered to have taken place at the casinos, rather than wherever people initiated the wagers on their phones or computers.

If that argument was accepted, online sports betting could be approved without being considered an expansion of gambling — and without requiring another constitutional amendment.

Critics said that was a willful misinterpretation of the 2013 referendum.

“The whole point originally was to establish destination casinos in economically depressed areas upstate, and they were supposed to be places where the economy would stimulate because people would come and patronize casinos,” said Cornelius D. Murray, a lawyer who has fought the gambling expansions in New York.

At least initially, Andrew Cuomo, the governor at the time, seemed to agree. His staff told sports-betting proponents that it would be unconstitutional to permit online sports gambling statewide, according to Senator Joseph P. Addabbo Jr., a Democrat from Queens.

Mr. Addabbo had sponsored a bill to legalize mobile sports betting, and he decided he “needed ammunition” to counter the arguments from the governor’s office, he said.

Mr. Kudon had that ammunition.

Following his playbook from his fantasy sports days, he and his allies marshaled legal briefs from former state officials arguing that it was the location of the computers, not the bettors, that mattered. Among those who were paid for briefs by gambling companies were two former high-ranking state judges, James M. McGuire and Robert S. Smith, and Mylan L. Denerstein, who had previously been the governor’s lawyer.

Former New York Gov. Andrew M. Cuomo with State Senator Joseph Addabbo, who sponsored legislation to legalize mobile sports betting.Credit…Michael Appleton for The New York Times
Mylan L. Denerstein, who was once legal counsel for Mr. Cuomo.Credit…Associated Press

Gambling proponents saw Ms. Denerstein’s endorsement as especially powerful, because of her previous work for Mr. Cuomo. “This is like his chief attorney telling him that he’s wrong,” said J. Gary Pretlow, a Democrat from Westchester County who sponsored a House version of Mr. Addabbo’s bill.

By January 2021, Mr. Cuomo had changed his mind. His annual budget proposal included a provision legalizing mobile sports betting.

A spokesman for Mr. Cuomo said he reversed course because the state, its revenue depleted in part by the pandemic, needed the cash. While Mr. Cuomo’s office initially questioned the constitutionality of mobile sports betting, his legal team ultimately agreed with the industry’s argument.

The Industry’s Fingerprints

The Kansas State Capitol in Topeka was the epicenter of a fight over sports betting.Credit…Amir Hamja for The New York Times

In Kansas, lawmakers had been debating sports gambling since 2018, but betting companies held out for sweeter deals, and the bills stalled.

By early this year, 30 other states had approved sports betting. Lawmakers in Topeka decided to try one more time.

In the House, the 50-page bill, sponsored by Mr. Barker, had the gambling industry’s fingerprints on virtually every page.

One provision ensured that casino companies would get a cut of sports-betting business.

Another expanded the list of venues where sports betting would be allowed. Among the new sites were a NASCAR racetrack and the stadium of the Sporting Kansas City soccer team.

The racetrack was next to the Hollywood Casino, which in recent years had donated a total of $60,000 to more than a dozen Kansas politicians and state party committees. The casino’s parent company, Penn Entertainment, had hired a fleet of lobbyists to advance the sports-betting bill. Another $150,000 came to lawmakers from other casinos, lawyers and lobbyists tied to the legalization effort, records show.

The bill had originally included a 20 percent tax on the gambling companies’ net revenues from sports betting. That was substantially lower than several other states had imposed.

But lobbyists for Penn and other casino companies claimed that the 20 percent rate would mean less money available to pay out to bettors. That, they warned, would drive more Kansans to illegal gambling websites.

The warning has not been borne out. Since sports betting was legalized, residents of high-tax states like New York have on average spent as much per capita on gambling as in states with low tax rates, according to the tax data The Times analyzed.

Mr. Barker and other legislative leaders, however, agreed to chop the tax rate in half. Mr. Barker concluded he had no choice. “They’ve got 26 lobbyists, and they had lobbied all my members,” he said.

Powerful Landowners

Representative John Barker, the sponsor of the Kansas bill, speaks during the debate on his bill in April.Credit…Amir Hamja for The New York Times

Mr. Barker, his bifocals sliding down on his nose, stood at the dais at the front of the House chamber. It was just before midnight on April 1, 2022. Reading off notes, he ticked off a few last-minute changes that he and other House leaders had inserted into the sports-betting package.

The changes sounded technical, but they represented lucrative concessions to the gambling industry and key campaign donors.

One new provision would set aside most of the already reduced gambling tax revenue for a special purpose: the construction or renovation of a sports facility for one or more unidentified professional teams.

On the House floor that night, a lawmaker asked Mr. Barker to explain the rationale. “I was asked to carry it by leadership,” he replied.

It was a reference to the House speaker, Ron Ryckman Jr. At a subsequent meeting with his colleagues, Mr. Ryckman would say only that the change had come at the request of unspecified “real estate developers,” according to lawmakers who heard his remarks. (Mr. Ryckman did not respond to requests for comment.)

Those developers, The Times found, had much to gain.

The most likely site for the new stadium — envisioned as a possible future home for the Kansas City Chiefs football team, currently located across the Missouri border — was an area west of Kansas City.

The location was already a sports and entertainment hub. Sporting Kansas City’s stadium was there. So were the NASCAR racetrack and the Hollywood Casino.

Another 400 acres of land there were controlled by a company called Homefield LLC, whose owners included executives with Sporting Kansas City, according to property and corporate records. Those executives were drawing up plans to use the 400 acres for a sports and hotel complex.

Just before the 2020 election, Homefield and a network of related companies routed tens of thousands of dollars in contributions to Mr. Ryckman and other legislative leaders, according to campaign disclosures and corporate records. The sums were especially impressive in a state where House lawmakers can take no more than $500 in the general election from any one donor.

The creation of a major new stadium in the area had the potential to make Homefield’s property more valuable. Homefield executives including Robb Heineman pushed state officials to include the stadium fund, according to lawmakers and Mr. Heineman.

None of this information was disclosed during the legislative debate. The provision was the product of “a background deal that wasn’t even talked about with other Republicans,” said Representative Paul Waggoner, a Republican from Hutchinson. “It is pretty disillusioning, frankly.”

Mr. Heineman denied that the campaign contributions were intended to influence legislation. He said that Homefield didn’t plan to tap into the stadium fund. But he said his partners at Sporting Kansas City will “think of ways that they could utilize this tool.”

Minuscule Taxes

Children’s Mercy Park, home to the soccer team Sporting Kansas City. Credit…Kyle Rivas/Getty Images

One other important provision had sneaked into the House bill: a tax break, like those in 18 other states, to let gambling companies deduct at least some “free bets” and other promotions from their taxable income.

The break didn’t just relinquish tax dollars; it also financially encouraged a type of marketing that some industry executives now acknowledge fuels addiction.

On the House floor, Pat Proctor, a Republican from Fort Leavenworth, warned that the legalization of online sports betting would ruin lives. Tens of thousands of Kansans already suffered from gambling addictions, he said, including a member of his own family.

“Right now, the only limiting factor on my family member’s addiction is that they have to get up and go to a casino to gamble,” Mr. Proctor said. “What you’re about to do here is make it convenient for gambling addicts to gamble 24 hours a day.”

But the House speaker, the majority leader and the governor, Laura Kelly, a Democrat, had all endorsed the package.

“It is hard to oppose the avalanche,” said Representative Francis Awerkamp, a Republican critic of the legislation.

“I feel like somebody was pulling a fast one on me,” added Representative John Carmichael, a Democrat. “And it stinks.” Yet an hour later, he voted for the bill, saying he felt like his constituents supported sports betting.

The House passed the bill by one vote. Now it was headed to the Senate.

‘Cigars, Cars & Bars’

Legislators partied with gambling lobbyists at the Cigars, Cars & Bars event in Topeka in April.Credit…Amir Hamja for The New York Times

The final days of Kansas’s legislative session in late April are marked by a flurry of receptions for lawmakers, many sponsored by lobbyists looking to get bills squeezed through.

One of the events that week was the Cigars, Cars & Bars party that Mr. Barker attended. An invitation sent to lawmakers and their aides promised there would be “something for everyone.”

On his way in, Mr. Barker was greeted by John J. Federico and Whitney B. Damron, who had co-sponsored the event and played central roles in the sports-betting deal.

Mr. Federico worked for Sporting Kansas City, one of whose owners had pushed the stadium fund. Mr. Barker wasn’t shy about having added language to the bill that provided an additional benefit to the team owners. Sporting’s soccer stadium would be one of the few places permitted to have kiosks at which fans could place bets.

“John’s a good guy,” Mr. Barker said between sips of the Irish whiskey that had been set aside at his request. “I made sure they had something in our bill.” (Mr. Federico said the party was a social event, not a lobbying opportunity.)

For his part, Mr. Damron had helped lawmakers negotiate a unique provision in the gambling bill, according to several of the lawmakers involved. It would legalize a new form of sports betting: slot-machine-like devices that featured video footage of past horse races. The catch was that the machines would only be permitted at one place: a defunct greyhound racetrack outside of Wichita.

The lobbyist Whitney B. Damron, center, at Cigars, Cars & Bars.
With lobbyists watching, Mr. Barker, left, and Senator Rob Olson resolve differences between the House and Senate betting bills.Credit…Photographs by Amir Hamja for The New York Times

That venue was about to be redeveloped by Phil Ruffin, a prominent Las Vegas casino executive. Mr. Ruffin had personally donated more than $100,000 to Kansas lawmakers since 2018. And he routed more money through political action committees that helped the campaigns of certain lawmakers who championed the sports-betting bill.

Mr. Damron didn’t work for Mr. Ruffin; his client was Penn Entertainment, which owned the Hollywood Casino. But Mr. Damron reckoned that adding the favor to Mr. Ruffin, given his years of campaign contributions, would yield extra votes for the bill, according to lobbyists and lawmakers involved in the deal.

Even skeptics of the legislation were enjoying themselves at the party.

“The fact is, we’re not making that much money,” Senator Jeff Pittman, Democrat of Leavenworth, said, referring to the fact that most of the tax revenue was going to the stadium. “It looks terrible.”

Moments earlier, Mr. Pittman had dispatched an aide to the entrance of the party to fetch more cigars; they were so expensive that each guest was being given only three. His aide laughed nervously, then fetched the cigars.

“I have a little scam going on here,” Mr. Pittman joked to a Times reporter.

A Deserted Capitol

A gambling lobbyist watched lawmakers debate sports-betting legislation in Topeka.Credit…Amir Hamja for The New York Times

The Senate vote took place two days later. More than a dozen industry lobbyists paced the marble floors of the capitol rotunda, huddling to compare notes on how lawmakers planned to vote.

It was after midnight, and aside from the lobbyists, the senators and their aides, the Capitol felt deserted. The visiting school groups that regularly toured the building to learn about how democracy works, the crowds of citizens trying to get a moment with their elected representatives — they were gone.

The vote was shaping up to be a nail-biter. Critics took to the Senate floor to warn their colleagues about what legalized sports gambling might do to the state’s most vulnerable residents.

The package, warned Senator Mark Steffen, a Republican from Hutchinson, was going to “destroy people’s lives. We don’t know their names right now. We don’t know what they look like. But we do know it will happen.”

Around 1:30 a.m., it was time to vote.

Sitting in the gallery that overlooks the Senate floor, lobbyists pulled out ballpoint pens to track the yeas and nays.

Six Republicans simply voted “present.” Several lobbyists said this was part of their strategy. A number of the “present” senators had secretly agreed to vote “yes” if the bill was falling short of the 21 votes needed for passage. A text message would be sent, and in an instant, their votes would change.

That wouldn’t be necessary. The vote was 21 to 13.

One of the “yes” votes belonged to Mr. Pittman, who had snagged an extra bag of cigars barely 48 hours earlier and had called the package “terrible.”

“It’s not like a majority of people in my district bet on sports, but the people who do are very, very vocal,” he explained afterward. “Even when I am just posting on Facebook, I get replies: When is sports betting coming?”

Senator Rob Olson, the Republican sponsor of the Senate bill, strode off the chamber’s floor and went straight to the rotunda. He and the lobbyists exchanged hugs and high fives.

“Can you believe it?” Mr. Olson exclaimed to the lobbyists. “We did it!”

Barely four months later, on Sept. 1, Ms. Kelly, the state’s governor, arrived at the Hollywood Casino, whose parent company had been a pivotal supporter of the legislation. She was there to place the first legal sports bet in Kansas’s history. She wagered $15 on the Chiefs to win the next Super Bowl.

In September, Kansas Gov. Laura Kelly placed the state’s first sports bet.Credit…Evert Nelson/The Capital-Journal, via USA Today Network

“I’m glad we were able to move quickly to get this bipartisan effort done in time for football season,” Ms. Kelly said, standing alongside a line of smiling casino executives.

In September and October, Kansans placed $350 million of bets. Because gambling companies spent tens of millions of dollars on tax-deductible promotions, the state collected less than $271,000 in taxes. Not a penny has gone to combat problem gambling.

“I didn’t think of the consequences,” Mr. Barker said when told of the meager tax revenue. “Maybe we need to fix that.”

He will not be around to do that. Mr. Barker lost in this year’s Republican primary to a candidate who criticized him for going too far to please the gambling industry.

0 comment
0 FacebookTwitterPinterestEmail
Business

Key Findings From The Times’ Investigation of Sports Betting

by SITKI KOVALI
written by SITKI KOVALI

Four years ago, it was illegal to gamble on sports in most of the United States. Today, anyone who turns on the television or visits a sports website or shows up at a stadium is likely to be inundated with ads to bet, bet, bet.

The New York Times has spent nearly a year investigating how the sports-betting industry got so big, so fast — and what the consequences are likely to be for public health, taxpayers, the sports world and more.

Here are some of the key findings from our reporting.

Gambling companies and sports leagues had a field day with state lawmakers.

After the Supreme Court opened the door to sports betting in 2018, lobbyists pushing for the legalization of online betting lavished state officials with gifts, parties and millions of dollars in donations, at times skirting campaign finance rules. Many lawmakers proved pliant.

Gambling lobbyists in April wait for lawmakers in Kansas to approve a sports-betting law.Credit…Amir Hamja for The New York Times

The gambling industry used dubious data to push to legalize sports betting, in part by predicting states would be greeted by gushers of new tax revenue. A Times analysis of the industry’s claims found that many of the projections, at least so far, have been wildly optimistic.

That is in part because lawmakers handed gambling companies lucrative tax exemptions. These exemptions essentially subsidized their efforts to lure customers with supposedly risk-free bets and other promotions.

To lure customers, gambling companies have struck envelope-pushing partnerships.

For example, The Times found that companies have paid at least eight universities to let them promote gambling on campus. In a deal between the betting company PointsBet and the University of Colorado Boulder, for example, each time someone downloads the PointsBet app and uses a special promotional code, the university pockets a $30 fee.

The University of Colorado Boulder struck a lucrative partnership with the betting company PointsBet.Credit…Stephen Speranza for The New York Times

The casino company Penn Entertainment took another approach.

It agreed to buy Barstool Sports, a controversy-courting suite of websites, podcasts and more. Barstool’s founder and ringleader, David Portnoy, has a history of misogynistic and racist behavior — and now has become one of the sports-betting industry’s most prominent spokesmen.

Mr. Portnoy is the type of person who traditionally would have encountered scrutiny from state regulators. In addition to his record of offensive behavior, The Times learned that he previously filed for bankruptcy, citing, among other things, $30,000 in gambling losses in one year — a typical red flag for gambling authorities. But in 12 of the 13 states in which Penn runs Barstool-branded sports betting, regulators didn’t require Mr. Portnoy to undergo a licensing review.

David Portnoy, the founder of Barstool Sports, is one of the sports-betting industry’s loudest cheerleaders.Credit…Amir Hamja for The New York Times

State regulators have often found themselves outmatched and overwhelmed.

The federal government doesn’t regulate sports betting. A Times survey of states that have legalized such betting found that the enforcement of rules has been haphazard, that punishments have tended to be light or nonexistent and that regulators are counting on the industry to police itself.

The more people bet, the more states collect in taxes. While also seeking to protect consumers, regulators have an incentive to help gambling companies get up and running quickly. Some states let them begin operating before regulators complete comprehensive licensing reviews.

The sports-betting industry has been creative in devising ways to persuade people to keep betting even after they lose money, but tools to make it easier to quit — some run by gambling companies, others by states — do not always work. In Indiana, for example, people who sought the government’s help to prevent them from gambling found that they were still able to place bets. Dozens did so.

0 comment
0 FacebookTwitterPinterestEmail
Uncategorized

Sheriff’s Report on ‘Rust’ Shooting Doesn’t Find Source of Live Rounds

by SITKI KOVALI
written by SITKI KOVALI

A 551-page report detailing the investigation by the Santa Fe County Sheriff’s Office into the fatal shooting of a cinematographer on the set of the film “Rust” last year painted a picture of a chaotic movie shoot but did not answer one of the fundamental questions of the case: How did live ammunition make its way onto the set, against the rules, and into the gun Alec Baldwin was practicing with that day?

“It was not determined where the live rounds on the set came from,” Juan R. Rios, a spokesman with the Sheriff’s Office, said on Friday after the report was publicly released as a response to records requests by news organizations.

The Sheriff’s Office, which investigated the shooting in New Mexico for more than a year, did not make a judgment in its report on whether criminal charges should be filed. It delivered the report to the district attorney’s office last month; prosecutors previously indicated that up to four people could be charged in connection with the death of the cinematographer, Halyna Hutchins, 42.

Using an F.B.I. laboratory report, the Sheriff’s Office determined that five additional live rounds had been found in various places on the “Rust” set, including in the belt Mr. Baldwin was wearing as part of his costume.

Mr. Rios said the Sheriff’s Office would not revisit the mystery of where the live rounds originated unless it received new information on the case.

A spokeswoman for the district attorney’s office, Heather Brewer, said in an email that the question would be part of its investigation.

On Oct. 21, 2021, the old-fashioned revolver Mr. Baldwin was holding went off while members of the production team were positioning a camera for close-up framing. Mr. Baldwin denied culpability, saying that he had been told the gun was safe to handle, and that Ms. Hutchins had been directing him where to point the gun.

Others who were interviewed by investigators include Hannah Gutierrez-Reed, the film’s armorer; Dave Halls, the first assistant director; and Seth Kenney, who supplied many of the set’s guns and ammunition. They have all denied responsibility in the shooting.

The gun Alec Baldwin was holding when it went off on the set of “Rust.”Credit…Santa Fe County Sheriff’s Office

The report published details of conversations that investigators extracted from Mr. Baldwin’s cellphone but did not include any from the day of the shooting. His lawyer, Luke Nikas, said those had been withheld from the Santa Fe investigators because of an agreement with law enforcement officials in New York State to hold back privileged conversations with his wife and his lawyer, or communications irrelevant to the “Rust” movie.

“Mr. Baldwin fully cooperated with the investigation and turned over his phone with all records, including all records from the day of the incident,” Mr. Nikas said.

According to the investigative records, live ammunition was also found on top of a cart used by the prop department, in a bandoleer on the cart, and in an ammunition box. All of it was listed as having been manufactured by Starline Brass, a company that does not make live ammunition but that sells brass cases that can be made live by adding a bullet and powder.

Those details and others were part of the case file that the Sheriff’s Office sent to local prosecutors. The material provides insight into how “Rust” crew members have explained what happened in the days and moments before the deadly shooting.

In a newly released November 2021 interview, Sarah Zachry, the crew member in charge of props on set, said the film had sourced its dummy rounds — inert cartridges that cannot be fired and are used to resemble live bullets on film — from Mr. Kenney and another individual referred to as “Billy Ray.” She said Ms. Gutierrez-Reed had also brought with her gun belts with dummy rounds already loaded in them, as well as a green bin, from a prior production.

Witnesses have presented the Sheriff’s Office with several possibilities for how live rounds may have ended up on the set.

One came in a note to investigators from Thell Reed, Ms. Gutierrez-Reed’s father, a prominent Hollywood armorer who had trained her. Mr. Reed wrote them that a month or two before the “Rust” shooting, he and Mr. Kenney trained actors on a different set at a gun range with live ammunition. After the training, Mr. Reed wrote, Mr. Kenney kept the live rounds and took them back home with him — later telling Mr. Reed that he wanted to keep the rounds.

In statements and legal papers, Ms. Gutierrez-Reed has laid blame on Mr. Kenney. In a lawsuit she filed against him, lawyers for Ms. Gutierrez-Reed said the ammunition that Mr. Kenney’s company supplied contained a “mix of dummy and live ammunition,” a claim he denies. In a statement to the news media and in an interview with an investigator, Mr. Kenney has pinned blame on Ms. Gutierrez-Reed, saying that the handling of firearms and ammunition on set was her responsibility.

A detective also questioned Ms. Gutierrez-Reed about dummy rounds that she had brought from a recent film on which she was an armorer — a western called “The Old Way,” starring Nicolas Cage.

Ms. Gutierrez-Reed told investigators that at one point during her work on “Rust” she noticed a shortage of .45 Long Colt dummy rounds. After asking Mr. Kenney where she might find more, she said, he asked her to check the supply of dummy rounds from “The Old Way.” In doing so, she found a bag filled with a “bunch of loose dummies” in her car, Ms. Gutierrez-Reed said. She noted that she had checked to make sure all of those rounds were dummies before bringing them to the set of “Rust.”

The filming of “Rust,” about a grizzled outlaw trying to help his teenage grandson escape a death sentence, is scheduled to resume in January as part of a settlement reached by the producers and Matthew Hutchins, Ms. Hutchins’s husband. The production is not planning to return to New Mexico and is considering other filming locations, including California.

In the aftermath of the fatal shooting, some involved with the film publicly criticized the safety standards on set, including in lawsuits that are still pending. Ms. Gutierrez-Reed and Ms. Zachry acknowledged in interviews with investigators that there had been two accidental discharges of blanks on set before the shooting that killed Ms. Hutchins. Ms. Zachry accidentally discharged a gun while pointing it at the ground near her feet, she told a detective, and that same day, a stuntman accidentally discharged a rifle.

0 comment
0 FacebookTwitterPinterestEmail
Newer Posts
Older Posts