The 2014 NCAA Men’s Division I Basketball Tournament, affectionately referred to as “March Madness,” begins today. The NCAA Tournament garners millions of viewers and advertising dollars. Along with March Madness comes office betting pools related to the NCAA Tournament. Estimates project that more than $2.5 billion will be wagered on the NCAA Tournament. Some estimates place this amount at more than twice as much money as bet on the Super Bowl. Indeed, office betting pools related to the NCAA Tournament are commonly accepted by many employers as a way to build employee morale and camaraderie. However, before allowing office pools, Texas employers should be careful to evaluate potential legal implications.
Employers Must Comply With Federal And State Law
In addition to potentially creating workplace distractions and lowering productivity, strictly speaking, office betting pools also violate federal law. For the vast majority of states, including Texas, the Professional and Amateur Sports Protection Act of 1992 (“PASPA”) specifically prohibits a private individual from operating a betting scheme based on a professional or amateur sporting event. In other words, PASPA effectively outlaws sports gambling unless the gambling takes place in one of the few states exempted from the statute (namely Nevada, Oregon, Delaware and Montana). While sports betting pools are illegal, the federal government does not devote resources to prosecuting minor office pools. The statute is aimed at catching bigger fish (think organized crime). Therefore, employers who permit an office pool related to the NCAA Tournament run very little to no risk of being prosecuted by federal authorities for violating PASPA.
Nonetheless, in addition to federal law, employers must also make sure they comply with specific state statutes related to gambling. For example, in Texas, the current state of the law appears to support that an office pool is permissible so long as employees are not required to pay an entry fee or something of value in order to participate. Put differently, pursuant to Texas case law and several opinions issued by the Attorney General, in order to place a “bet” in Texas, one must pay something of value, i.e., an entry fee. Therefore, without an entry fee, there can be no unauthorized “bet.” Consequently, so long as an office pool does not require employees to pay an entry fee or something else of value, it does not appear that such a pool would violate Texas law—this is true even if the winner of the pool receives a monetary prize.
Other Issues To Consider
Employers would be wise to make an office pool an employee initiated event rather than an event run by management. Employers do not want employees to feel pressured to participate in the office pool because their employer started the pool. Therefore, it is best if a pool grows organically among co-workers rather than being an organization-wide event.
If you have an office anti-gambling policy, make sure that any office pool is consistent with the policy. Employers do not want to turn a blind eye to a seemingly innocent event such as an office pool related to the NCAA Tournament only to have it used against them in reference to a more serious gambling event at a later date. If you have an anti-gambling policy, make sure to document that an office pool related to the NCAA Tournament or other similar events (e.g., a company sponsored casino night) will not be deemed to violate this policy so long as it meets the above-referenced criteria.
Most importantly, do not forget to catch the Final Four and surrounding events at AT&T Stadium taking place April 5-7, 2014!