March Madness Office Pools are Fun, But Are They Legal?

The annual NCAA men’s and women’s basketball tournaments will soon get underway, a time of excitement for college sports fans and an occasion for massive sports gambling in the U.S. Most of this wagering takes place in licensed casinos and sports books, but a lot of it takes place in break rooms and office cafeterias in the form of the traditional office pool.

Over a Third of Americans Plan to Take Part in a March Madness Brackets Pool

Four in 10 Americans polled in 2022 said they planned to participate in an NCAA brackets pool with friends or colleagues, with the average respondent entering three of them.

And WalletHub estimates that $10 billion was bet on the 2023 NCAA Men’s Basketball Tournament, with 60% of it wagered legally and the remaining wagered illegally through unlicensed venues such as office pools.

“For most college basketball fans, playing in NCAA tournament pools is a fun pastime that generally does not lead to much legal scrutiny,” writes Marc Edelman, Forbes columnist and law professor. “However, for a select few, operating March Madness pools may open the door to substantial scrutiny under federal and state gaming laws.”

For example, California Penal Code Section 337a makes it illegal for individuals or employers to participate in gambling in the workplace, while Penal Code Section 336.9 provides for a maximum fine of $250 for participating in betting pools.

“So are (office) pools illegal? Technically, yes,” writes employment lawyer Jeffrey Polska. “But if you don’t run it online, the person running it doesn’t take a cut, and you keep the amount under $2,500, your odds of getting in trouble are pretty small.”

However slight the risk is that your office pool may land on the radar of law enforcement agencies, March Madness wagering is an interesting lens through which to view the fundamental shift in the U.S. with respect to sports gambling.

The U.S. Supreme Court in 2018 struck down legislation preventing gambling on professional and amateur sports, opening up the floodgates to sports gambling across the U.S. Since that time, a number of individual states have rushed to create their own regulatory infrastructure to accommodate the sports gaming business.

In total, 38 states and Washington, D.C. have legalized sports gambling in one form or another, according to Legal Sports Report, and “nearly every U.S. state legislature has at least introduced a sports betting bill at some point since 2018, with more expected to revisit or introduce new legislation in 2024.” While the rules vary by state, the unmistakable conclusion is that legalized sports gambling has become a massive industry.

The LexisNexis State Net® Capitol Journal™ reported on this emerging trend back in 2022, with a feature article that chronicled the rapid expansion of sports gambling in the U.S.

“These days, the logos for gambling brands are plastered all over sporting arenas, betting lines are frequently incorporated into pre-game shows, and gambling advertisements are as common on sports talk radio and television broadcasts as promotions for beer,” reported Capitol Journal. “But in actuality, sports gambling in the United States is still in its infancy. The sports gambling landscape isn’t nearly as uniform as it appears to be in popular culture.”

Law360® Employment Authority addressed the issue of workplace gambling, even for something as benign as the annual office brackets pool, and Vin Gurrieri’s column surfaced a few issues that employers may want to contemplate again this year:

• Can employers promote a pool?

Legal experts agree that sports gambling pools are generally illegal and probably not something that employers should endorse, but law enforcement hasn’t traditionally cracked down on small office contests that don’t involve big cash payouts.

• Will more telework mean more slacking off?

A more practical concern for employers is addressing work slowdowns caused by distracted employees. The challenge of balancing employee morale and worker productivity is probably the bigger consideration than gaming laws enforcement.

• Will sports loyalties result in workplace bullying?

March Madness can be a fun time for fostering office camaraderie, but it can also be a vehicle for workplace harassment if someone gets too rambunctious in their support of a team they have picked to advance in the tournament. Employers who get out in front of things by reminding everyone of the company’s anti-harassment policies can head off a potential problem.

Of course, there are far more menacing compliance threats on the horizon for companies than the ubiquitous March Madness office pool. When those threats strike, general counsel need fast access to the information and tools required to help them mitigate external risks to the enterprise, shape legal strategy and adapt to changing circumstances.

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