March 2, 2018

March Brings Madness to the Workplace

by Kara Williams and Ken Robinson, Hahn Loeser & Parks LLP

Every March, employers face a significant challenge: the workplace distraction known as March Madness. Odds are someone in your workplace will organize an NCAA Tournament pool.

According to ESPN and the American Gaming Association, in 2017 40 million people were expected to submit 70 million brackets, at an average of $29 per bracket, bringing the total amount bet on March Madness to $10.4 billion. Only about 3 percent of the wagered money is believed to be done legally.

Speaking of betting, we would be willing to bet that few companies have seriously considered the legality of NCAA Tournament pools in the workplace. While the likelihood of the FBI raiding your workplace over your March Madness pool is extremely small, it can happen. Here are a few pointers companies can consider to make it a safer bet:

First, companies should not sponsor or organize gambling opportunities. Your human resources department should definitely not be collecting entry fees or distributing brackets. Bettors can make bets, but the “house” may be liable for organizing an illegal gambling opportunity.

Second, if your company has offices in multiple states, prohibit interoffice pools. Gaming laws are both federal- and state-based. By avoiding the internet and multi-state participation, the company’s liability is likely limited to state law. In Ohio, we can deduce that NCAA Tournament pools are probably illegal, but there is really no case law interpreting the (il)legality of office pools.

Third, prohibit employees from using the intranet or company-owned equipment to prepare and submit brackets.

Fourth, the smaller the entry fee, the better. By keeping the entry fee to around $5 to $15, the gambling will likely be legally tolerable (all else being legally compliant).

Fifth, companies should ensure all of the money collected is awarded to the winner(s). Neither the company, nor any one individual organizing the pool, should skim anything from the top.

Of course, the safest bet is to prohibit workplace gambling entirely. Whatever stance your company takes on the office bracket pool, it is important to keep these rules of the game in mind. Good luck!