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Is your March Madness office pool legal?

Daniel Roberts
Senior Writer

"Everybody else does it" has never been a valid legal excuse. But in the realm of NCAA men's basketball tournament pools, it's almost true. If you're operating a modest-sized March Madness pool at your office, for a modest payout, it's unlikely you're going to get carted off to prison.

That doesn't mean your pool is legal, technically.

The law regarding what constitutes illegal gambling varies by state, and typically depends on a state's requirement for the balance of skill vs. chance in any given game or contest—which one is the predominant factor?

You've likely heard the "game of skill, game of chance" debate raging lately in the world of daily fantasy sports, where DraftKings, FanDuel, and other platforms are being pursued by some states that want to ban them, while other states seek to pass new laws to protect them.

In some states, the requirement is pretty easy to meet: Kansas, for one, only requires that a contest have more skill than chance. That's a plausible argument—that it takes skill, knowledge, and maybe even research to predict which favorites will fall, and which underdogs will prevail. In other states, the bar is almost insurmountable: Tennessee and Arkansas, among others, have laws that allow no chance whatsoever in a game. It's hard to argue that correctly predicting the NCAA tournament does not involve any chance.

Then there's the Professional and Amateur Sports Protection Act of 1992 (PASPA), which made any sports betting illegal, except for sports lotteries in Delaware, Montana, and Oregon, and all betting in Nevada. PASPA is pretty straightforward, and would appear to make a March Madness pool in any other state illegal.

But for most pools, none of this will matter. Nearly one-fifth of all American workers have participated in an office March Madness pool, according to a 2014 Career Builder survey; and the NCAA says that some $2.5 billion is illegally wagered on the tournament each year. You aren't going to be pursued by the law unless: the pool is so big that there are strangers in it; there are people in your pool in a different state; you take a cut for operating the pool. (Known in the betting world as a "vig," this last rule has proven key in the legal battle over daily fantasy sports; in Texas, Attorney General Ken Paxton has said he believes daily fantasy contests are illegal gambling under state law, but not because of the "skill vs. chance" issue, rather because it's prohibited in Texas to bet on a sporting event when the house takes a cut. The house, in the daily fantasy realm, would be DraftKings, FanDuel, or other operators.)

Even if one of the above is true, you still probably have nothing to worry about-- unless you are the victim of a very unlikely "if." Marc Edelman, a law professor at the Zicklin School of Business at Baruch College, offers up this list of the unlikely scenarios that could put you at risk: "If someone from your contest is investigated for money laundering or organized crime, or if someone that wins your contests discloses too much detail about big winnings on their tax returns and is audited by someone highly aggressive, or if an NCAA athlete is in your pool, or if an enemy of yours goes to the police and reports you."

In other words, if you participate in an office pool, the smartest approach is to stay quiet about it. Don't trumpet your winnings on the Internet, especially if they're more than a couple hundred bucks. And if you're the office commissioner: Keep it in-state; keep it to your coworkers and people you know; aim for a jackpot in the hundreds, not the tens of thousands. And don't take a fee for running the pool, you jerk.

[Yahoo Tourney Pick’em: Fill out your bracket for a shot at $50K]


Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.

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