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The trustees of the Social Security Administration released their annual report on the program’s long-term solvency on Wednesday—but the report is likely already out of date since it doesn’t take into account the sharp economic downturn triggered by the COVID-19 pandemic.

Even without the pandemic factoring into the calculations, Social Security is heading for insolvency by 2035, the report says. That doesn’t mean the program will be bankrupt, but it represents the date when Social Security’s reserves would be used up and mandatory benefit cuts would be instituted across the board. If nothing is done to shore up Social Security, current projections anticipate that beneficiaries will receive only 79 percent of expected benefits, with further cuts needed in future years.

Fifteen years might seem like a long time, but it’s really not. Anyone over age 50 today is likely facing the prospect of benefit cuts happening before they retire.

And, again, that doesn’t account for the current economic crisis.

If the coronavirus results in economic losses of 15 percent for the current year, the program would likely face insolvency by 2034, says Stephen Gross, chief actuary for the Social Security Administration. Another year of losses would move that date even closer.

“We just don’t know if we’re going to be back to normal this year, next year, or when,” Gross said Thursday during an event hosted by the Bipartisan Policy Center, a centrist think tank.

And if the coronavirus response triggers a long-term recession, the urgency of Social Security’s status becomes more apparent. According to a projection from the Bipartisan Policy Institute, another recession of the length and depth of the so-called Great Recession that followed the 2008 market crash would cause Social Security to face insolvency before the end of the current decade.

“This is a concerning report, even before the virus crisis hit,” says Charles Blahous, senior research strategist for the free market Mercatus Center and a former trustee for Social Security.

More important than the projected dates for insolvency, he says, is the question of how severe the shortfall will be and how long Congress has to act before it arrives. The coronavirus will likely to mean a larger fiscal problem and less time to address it.

As I wrote at this same time last year, the problem facing Social Security is really one of time more than money. If changes can be phased in over a longer period of time, they will be less likely to disrupt retirement plans for current workers or beneficiaries. The last time Congress enacted substantial changes to Social Security was in 1983, and those changes won’t be fully adopted until 2027.

It should be obvious that the longer Congress waits to act, the less time will be available for a gradual adjustment.

Any reforms should also consider two systemic problems within the Social Security system. When Social Security launched in 1935, the average life expectancy for Americans was 61. That means the average person died four years before qualifying for benefits. It was imagined as a safety net for the truly needy, not a conveyor belt to transfer wealth from the younger, working population to the older, relatively wealthier retired population.

As a result, the worker-to-beneficiary ratio has shifted dramatically. Last year, there were 64 million Americans getting benefits from Social Security, while 178 million people paid into the system via payroll taxes, according to the trustees’ report. That’s less than three workers for every beneficiary, a near-historic low.

Congress is going to have to consider all available options, says Blahous. That means changing eligibility ages, moderating benefit growth, and probably hiking payroll taxes too.

“We’re not going to have enough from any one of those pots by themselves to be able to close the shortfall,” says Blahous, “and that’s even before taking into account the worsening that is going to occur as a result of this year’s economic slowdown.”

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In Dew-Becker v. Wu, decided last Thursday, Colin Dew-Becker sued Andrew Wu, based on a FanDuel contest; Dew-Becker claimed he had lost $100 to Wu, but was entitled to his money back:

The complaint further alleged that the DFS [Daily Fantasy Sports] contest constituted illegal gambling under Illinois law and, therefore, plaintiff was entitled to recover the lost money under section 28-8(a) of the Criminal Code of 2012, a statutory provision which allows the loser of certain illegal bets [of $50 or more] to seek recovery from the winner.

At a bench trial, plaintiff testified that in a DFS contest each participant creates a virtual roster of players by selecting from among current athletes in a real professional or amateur sports league. Each participant then earns fantasy points based on how well the selected athletes perform individually in their actual professional or college sports games on a given day. After all such games are completed, a total score is calculated for each of the virtual rosters, and the winner of the contest is the participant whose roster has the most points. A head-to-head DFS contest is one that involves only two participants who compete against each other directly.

Plaintiff testified that on April 1, 2016, he and defendant each paid a $109 entrance fee to participate in a head-to-head DFS contest on the FanDuel website. The contest involved National Basketball Association (NBA) games, and both plaintiff and defendant selected a fantasy roster of nine NBA players. Plaintiff stated that he understood when entering the contest that the winner would keep $200, the loser would get nothing, and FanDuel would keep $18. Plaintiff testified that defendant won the DFS contest by a score of 221.1 to 96.3 and that defendant received the $200 due him….

Section 28-1(a)(1) of the Criminal Code of 2012 states that a person commits gambling if he or she “knowingly plays a game of chance or skill for money or other thing of value, unless excepted in subsection (b) of this Section.” Subsection (b)(2), in turn, provides an exception to gambling for a participant in any contest that offers “prizes, award[s] or compensation to the actual contestants in any bona fide contest for the determination of skill, speed, strength or endurance or to the owners of animals or vehicles entered in such contest.” In this case, there is no question that when plaintiff and defendant entered into the DFS contest, they were “actual contestants” who had before them a possible “prize,” “award,” or “compensation.” The question is whether plaintiff and defendant were engaged in a “bona fide contest for the determination of skill.”

Answering this question can present difficulties because the outcome of every contest depends, at least to some degree, on chance. Even chess, a highly skill-based contest, can be affected by the random factors of who draws white (and thus goes first) or whether one’s opponent is sick or distracted. To address these difficulties and determine whether a contest is one of skill and, hence, exempt from gambling laws, courts have applied three general tests. See Marc Edelman, The first test, and the one adopted by the majority of courts, is typically referred to as the “predominant purpose test” or “predominate factor test.” Under this test, contests in which the outcome is mathematically more likely to be determined by skill than chance are not considered gambling….

A second test used to differentiate between contests of skill and gambling is called the “material element test.” Under this test, a contest is considered a game of chance if the outcome depends in a material degree upon an element of chance, even if skill is otherwise dominant.

The third test is the “any chance test.” As its name suggests, this test finds a contest to be gambling if it involves any chance whatsoever.

This court has not previously adopted any of the three recognized tests for determining whether a contest is one of skill or chance. We find, however, that the predominate factor test is the most appropriate. The any chance test is essentially no test at all, as every contest involves some degree of chance. The material element test depends too greatly on a subjective determination of what constitutes “materiality.” The predominate factor test, in contrast, provides a workable rule that allows for greater consistency and reliability in determining what constitutes a contest of skill. Notably, too, our legislature has used the predominate factor test in other, similar contexts.

At issue then is whether head-to-head DFS contests are predominately determined by the skill of the participants in using their knowledge of statistics and the relevant sport to select a fantasy team that will outperform the opponent. Several recent, peer-reviewed studies have established that they are. Daniel Getty et al., Luck and the Law: Quantifying Chance in Fantasy Sports and Other Contests, 60 SIAM Rev. 869 (2018); Brent A. Evans et al., Evidence of Skill and Strategy in Daily Fantasy Basketball, 34 J. Gambling Stud. 757 (2018); Todd Easton & Sarah Newell, Are Daily Fantasy Sports Gambling? 5 J. of Sports Analytics 35 (2019). In particular, it has been shown that “skill is always the dominant factor” in head-to-head DFS contests involving NBA games. Indeed, the fact that DFS contests are predominately skill-based is not only widely recognized to be true but has created a potential revenue problem for the DFS websites. Because skilled players can predominate the DFS contests, new and unskilled players are often hesitant to participate.

{A recent decision from the intermediate court of New York has recognized the role of skill in determining the outcome of DFS contests, noting that research has “demonstrated that lineups chosen by actual contestants beat those chosen at random and contestants improve their performance over time.” White v. Cuomo (N.Y. App. Div. 2020). The decision concluded, however, that such contests are games of chance under the material element test.}

Arguing for a different result, plaintiff points to an Illinois Attorney General opinion letter that concluded DFS contests are illegal gambling under Illinois law. See 2015 Ill. Att’y Gen. Op. No. 15-006. However, that opinion did not have the benefit of the more recent research that has established the predominance of skill in DFS contests. Moreover, the opinion relied heavily on a decision from the Texas Attorney General’s Office, Tex. Att’y Gen. Letter Op. LO-94-051 (June 9, 1994). Texas employs the any chance test, not the predominate factor test.

Justice Karmeier dissented, arguing:

[The majority] properly asserts the fundamental inquiry of the predominate factor test that “‘[t]he test of the character of the game is, not whether it contains an element of chance or an element of skill, but which is the dominating element that determines the result of the game, or, alternatively, whether or not the element of chance is present in such a manner as to thwart the exercise of skill or judgment.'”To this extent, I agree. In applying the predominate factor test to a DFS contest, however, the majority oddly ignores its own statement of the test and finds DFS is a contest of skill based on the results of statistical studies.

From the outset, I must highlight the impropriety of the majority’s reliance on scientific studies—that are not found in the record or in either party’s briefs—to make the factual determination that skill is the predominate factor in a contest. While defendant’s brief presents a bare assertion that DFS was a game of skill, he fails to support this contention with any authority. Because the studies were not presented at any stage of this litigation, reliance on these studies raises “concerns about witness credibility and hearsay normally associated with citations to empirical or scientific studies whose authors cannot be observed or cross-examined.” The majority should not take the position of an advocate and defend against plaintiff’s suit by hastily accepting the validity of studies that it searched for outside the record, especially considering the majority failed to engage in its own analysis of the studies’ validity or credibility. The injustice resulting from this mistake is exceedingly apparent considering that, under a proper predominate factor analysis, the evidence presented at trial proved that the contest here is clearly a game of chance….

[T]he vast majority of predominate factor jurisdictions have adopted a qualitative approach. A review of these jurisdictions clarifies that, to be a contest of skill, the participant’s efforts or skill must control the final result, not just one part of the larger scheme. If chance can thwart the participant’s efforts or skill, it is a game of chance. “It is the character of the game, and not the skill or want of skill of the player, which determines whether the game is one of chance or skill.”

Although scientific studies may aid in this determination, under the qualitative approach, games or contests whose outcome depends on the results of a contingent event out of the participant’s control, like DFS, are games of chance as a matter of law. This is so because predictions, regardless of the likelihood of being true, are mere guesses innate with chance. The knowledge of past records, statistics, contest rules, and other information can increase a participant’s chances of correctly predicting the result of the event, but it cannot control the outcome, as no amount of research or judgment can assure a certain result will occur. No one knows what may happen once the event commences. “What a man does not know and cannot find out is chance to him, and is recognized as chance by the law.” Thus, skill can improve or maximize the potential for winning in such contests, but it cannot determine the outcome….

It is true that every game, to some extent, involves chance or an unknown. Nevertheless, no court would doubt that a person participating in a simple human footrace is a game of skill. The critical distinction between a game of chance and a game of skill is the participant’s ability to overcome chance with superior skill. Runners can train for severe weather, divert their routes to avoid competitors, or increase their speed to make up for lost time. But a person who places a wager on the race lacks any ability to control the outcome of the race. It is this type of chance inherent in a game, which a person cannot influence, that contributes to the undeniable evils at which antigambling statutes are aimed. Thus, the exemption under section 28-1(b)(2) may apply only to contests in which the participant’s own skill has the opportunity to overcome chance….

As a result, the majority opinion risks legalizing traditional concepts of gambling anytime a study concludes that it involves skill more than chance. One example is poker. Our courts, like many other courts, have determined poker and other card games [such as blackjack] to be games of chance despite statistical evidence that skill dominates. Under the majority’s opinion, however, because studies show skill dominates in poker, these cases are effectively overruled, and poker is now legal. This absurd result could not have been intended by the legislature….

Applying the proper standard here, a DFS contest is a game of chance. Once a lineup is set and the athletic games commence, the DFS participant cannot influence the athlete’s performance or how points are accumulated. At this point in the game, the outcome of the contest relies entirely on a contingent event that the participant lacks all control over, and there is no subsequent opportunity for the participant to overcome the chance involved. Accordingly, a DFS contest is a game of chance.

It should be noted, however, that the legislature has since authorized sports wagering, through its enactment of the Sports Wagering Act. Although the Act does not explicitly reference daily fantasy sports, it defines “sports wagering” as “accepting wagers on sports events or portions of sports events, or on the individual performance statistics of athletes in a sports event or combination of sports events, by any system or method of wagering, including, but not limited to, in person or over the Internet through websites and on mobile devices.” Therefore, … because daily fantasy sports requires a wager in an attempt to accumulate the most points based on the individual performance statistics of athletes in a combination of sport events over the Internet, the Act clearly governs daily fantasy sports. While the Act has no bearing on this case, the ability to recover losses from DFS contests, when played in accordance with the Act, has now come to an end.

 

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It was October 29, 2019, when John’s life took a frightening turn: The Indiana Wesleyan University (IWU) student suffered a seizure that knocked him unconscious for more than 15 minutes.

Additional seizures in the subsequent weeks necessitated several emergency trips to the hospital. He was prescribed medication that made him feel very tired and forced to refrain from physical activity, jeopardizing his likelihood of returning to the baseball team. John missed a significant amount of class time, but by the end of the semester he was still on track to graduate in the spring.

The coronavirus pandemic has prevented IWU from holding a formal graduation ceremony, so the school plans to mail the diplomas next week, but John won’t be getting his. On December 12, the administration expelled him for sexual misconduct, just three weeks after receiving a complaint from a female student, Amy. (I am using pseudonyms for both.)

Now John is suing IWU officials for breach of contract and infliction of emotional distress. His case is similar to the hundreds of other lawsuits filed against universities for violating principles of basic fairness in Title IX sexual misconduct adjudication. But it’s unusual in one notable way: Unlike many other accused men, John is also suing his accuser.

That’s because Amy didn’t just accuse John of sexual misconduct. She also allegedly told one of her professors that he had given her HIV, according to documents obtained by Reason and cited in the lawsuit. What’s more, IWU never told John about this: The information didn’t come to his attention until months later, after his attorneys uncovered it. The discovery necessitated that John—an immunocompromised person—take a trip to a medical facility to be tested for HIV in the midst of the COVID-19 pandemic. His test came back negative.

“We did not have to bring a claim against [Amy], but once we dug into the documents and saw what was there, it was shocking,” Kristina Supler, an attorney for John, tells Reason. “We knew IWU’s process was markedly unfair, but what has already been learned through expedited discovery, it’s far worse than we could have imagined.”

—

John and Amy met during the fall semester. They engaged in amorous activity throughout the month of October, having sexual intercourse on one occasion. They were technically violating school policy: IWU is a private, Christian school that has banned sexual activity outside of marriage. IWU also prohibits students of the opposite sex from congregating in each other’s dorm rooms without official permission. Amy had repeatedly been reprimanded for breaking curfew and was told she could face repercussions for any further violations. On the evening of Saturday, November 16, after John texted her to come over, Amy opted to climb a rope ladder and sneak through John’s second-floor window to visit him.

Amy and John made dinner and watched a movie on his couch with John’s roommate, according to his lawsuit. Then John’s roommate went to bed, and the couple had sex. Amy would later tell IWU officials that she told John “no” and “stop,” but John denies that she ever said anything of the sort. On the contrary, she was enthusiastic and fully consented, according to John’s account.

“Afterwards, Amy continued to hang out in John’s dorm room talking with John and then spent time in his roommate’s bedroom talking, laughing, and texting John in the other room,” the lawsuit reads. “Later that night and the next day, Amy communicated multiple times with John and his roommate by text and snapchat, without any suggestion that something was wrong.”

By Monday, Amy apparently felt differently. A friend of hers told this friend’s mother—an employee at IWU—that Amy said she had been raped. The mother then informed IWU’s Title IX official, who is responsible for handling sexual misconduct matters involving students. The official reached out to Amy, who filed a formal complaint. Dean Andrew Parker immediately imposed a no-contact order between Amy and John, and interviewed the latter on November 21.

John met with the administration again on December 9, in the middle of finals week. By December 12, Parker had already decided to find John responsible for sexual assault and dismiss him from the school for at least a year. John received a letter from the university explaining that Parker had determined it was “more likely than not” that Amy had not consented to sex with John. Parker told John he could reapply to be a student in the spring of 2021. He also barred John’s coaches—with whom John was quite close—from speaking to him.

John immediately sought an appeal, raising a number of issues concerning both the finding against him and the manner in which the decision was made. IWU used a single-investigator model to handle the accusation, and thus John was never provided a hearing at which he could cross-examine Amy or address the evidence against him. In fact, he never received even a written statement detailing Amy’s account, nor was he invited to submit one himself. He accused Parker of mischaracterizing his roommate’s statements: His roommate, in fact, had offered to submit a statement bolstering John’s case, according to the lawsuit.

“Dean Parker ignored [Amy’s] entry into John’s room via rope ladder, ignored her texts to him after the encounter, and ignored evidence suggesting that a bruise she alleges he caused actually came from slipping on the ladder,” wrote John in the lawsuit.

John also took issue with Parker’s contention that John’s medical condition had made him “angry or aggressive,” assertions that John was never afforded an opportunity rebut.

In any case, his request for an appeal was denied.

—

John’s lawsuit raises a number of credibility issues regarding Amy.

For one thing, IWU offers amnesty to people who file sexual misconduct complaints in the event that the investigation of the complaint turns up evidence that the accuser committed a policy violation. Amy was on thin ice with the administration following her repeated curfew violations. Filing a sexual misconduct report might have been one way to protect herself from getting into any further trouble.

Then there was the HIV claim. On December 11, an IWU professor, Anneke Stasson, filed a report indicating that a student—Amy—had previously said she had been raped. Amy was now requesting a grade of “incomplete” for the class, despite the deadline having passed. Stasson asked Amy how she was doing and if her rapist was still on campus. Amy said that he was, and according to Stasson’s report, “She then told me that she had been tested for STDs and she tested positive for HIV. It makes me really worried to think the guy who gave her HIV is still on this campus.”

Parker received Stasson’s report on the same day that he ruled against John. This creates just two possibilities: One is that he didn’t believe Amy’s claim to be HIV positive, but nevertheless still ruled that Amy’s account of what happened to her was more credible than John’s. The other is that he did believe Amy, but nevertheless failed to warn John that he was at risk of having contracted HIV. At no point did any IWU official inform John about the HIV possibility, according to the lawsuit.

It was not until months later, after John had decided to move forward with a lawsuit against IWU, that his attorneys discovered Stasson’s report. The attorneys then asked IWU to verify Amy’s HIV status, but school officials said they were under no obligation to do so, according to the lawsuit. Left with no other choice, John—who was sheltering in place with his family in California—had to break quarantine on April 6 and travel to a medical facility to take an HIV test, despite the general need for immunocompromised individuals to avoid exposure to potential COVID-19 vectors.

Amy explained to Inside Higher Ed that Stasson had misunderstood her: She never told the professor she had tested positive for HIV, Amy claimed. She also said she did not find out about Stasson’s report until March, and would have set the record straight if she had known. She even faulted the university for not telling John about the report.

“I have no respect for him whatsoever but the decency would be to inform him regardless,” she said, according to Inside Higher Ed.

Indiana Wesleyan University did not immediately respond to a request for comment, but a spokesperson told Inside Higher Ed: “Indiana Wesleyan University is committed to creating the safest campus community possible for our students. We closely follow federal regulations for the investigation of sexual assault and have personnel who have been thoroughly trained in process and procedure.”

In any case, the HIV claim motivated John to add Amy and Parker as defendants in the lawsuit.

“We want this student to be able to resume classes and get his degree,” Susan Stone, an attorney for John, told Reason. “And we want the university to make reputational repair.”

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How many Americans have already been infected with the novel coronavirus that causes COVID-19? Answering that question would give public health officials and the rest of us a much better idea of how dangerous the illness is. That information would enable accurate calculations of what percentage of infected people die of the disease, that is, the infection fatality rate.

Right now there are nearly 900,000 confirmed cases in the U.S., but researchers know that potentially a very high percentage of people who have been infected have experienced mild or even symptomless versions of the disease are undetected by the health care system. The best way to figure out the actual percentage of Americans who have already encountered the disease is to do random population screening using antibody blood tests. Three months into the pandemic, the Centers for Disease Control and Prevention (CDC) has yet to fully implement this sort of population screening.

In the absence of widespread testing by the CDC, privately funded researchers associated with Stanford and the University of Southern California earlier this month released the results of two controversial studies in which they tested the blood of residents of Los Angeles and Santa Clara (Silicon Valley) counties for antibodies to the virus. Applying various statistical and demographic adjustments, the California researchers estimated in Santa Clara County that the actual number of residents already infected by early April ranged between 48,000 and 81,000, which would be 50 to 85 times more than the number of confirmed cases. For Los Angeles County they calculated that approximately 221,000 to 442,000 residents have had the infection, which is 28 to 55 times higher than the tally of confirmed cases at the time of the study. If their calculations are right, that would mean that the disease has spread undetected widely throughout the population and would thus be much less deadly than many other researchers had feared.

Applying the lowest (28) and the highest (85) undetected case ratios from the California studies to the 260,000 confirmed cases in New York state would imply that between 7.3 and 22.1 million of the Empire State’s 19.5 million residents have already been infected. Applying those ratios to New York City’s 146,000 confirmed cases would imply that between 4.1 and 12.4 million of the Big Apple’s 8.4 million residents have been exposed to the disease (which, for the upper-end estimate, is obviously impossible).

Yesterday, New York Governor Andrew Cuomo revealed the results of antibody tests of randomly accosted 3,000 New Yorkers tested as they bought groceries and shopped at various locations across 19 counties in 40 localities. The tests suggested that 13.9 percent of New York state and 21.2 percent of New York City residents had been exposed to the virus. That would mean that 2.7 million and 1.8 million state and city residents respectively have been infected with the virus. Stephen Hawes, chair of the University of Washington’s department of epidemiology, told the New York Times that he believed it was likely that New York’s survey was overestimating the infection rate somewhat by targeting people moving around in society. Folks who are more circumspect about social distancing weren’t tested.

Calculations using these New York state and city blood test data suggest that the rate of mild and symptomless coronavirus infections is only about ten to elevenfold greater than the number of confirmed cases in those jurisdictions. Assuming the New York blood test data are reasonably accurate would suggest that the California studies are overestimating undetected infection rates three to eightfold. If Hawes is correct that would mean that the California studies’ undetected infection estimates are even less likely to be in the ballpark.

One upshot is that the California studies’ relatively low estimates of the percent of infected people who eventually die of the disease—between 0.1 and 0.3 percent—are unfortunately too optimistic.

For more detail, see Jacob Sullum’s excellent discussion of why California and New York fatality rates might differ.

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