With the NFL season in full swing, employers may find that office betting pools are popping up. But are they legal? And how should employers respond?
Whether an office betting pool is legal depends on the jurisdiction in which the employer is located. Both federal and state laws apply.
Federal Law. While gambling of any sort is strictly prohibited in federal workplaces, federal law does not specifically prohibit office pools among co-workers in the private sector. However, social office betting on sports events is not expressly exempted, either.
Several federal statutes could technically apply. The Unlawful Internet Gambling Enforcement Act prohibits persons engaged in the business of betting from accepting payments for internet gambling transactions. The Illegal Gambling Business Act makes operating a gambling business involving five or more persons a federal crime if it either violates state law or earns $2,000 or more in a single day. Finally, the Wire Act prohibits using wire communications, including the internet or phone, to place bets on sporting events across state lines. Therefore, if an office pool includes employees from different states who use an electronic means of transferring money, such as Venmo, to participate in the pool, this could violate federal law.
As a practical matter, small office betting pools are rarely prosecuted federally. However, federal law is most likely to apply if employees are participating in the pool by internet across state lines or if the office pool is already illegal under state law. Therefore, it is important for employers to understand whether social office betting is permitted under their state’s gambling laws.
State Law. The legality of social office betting pools in each of the states in Employers Council’s six-state region is outlined below.
Office Pools Permitted. Arizona, Colorado, and Wyoming generally permit social gambling, including office betting pools, as long as the following conditions are met:
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Participants are natural persons (not corporations or LLCs, etc.) who share a bona fide social relationship and are not organized strictly for gambling purposes;
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The organizer of the pool is not profiting from or operating the pool for personal gain; and
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It does not involve professional gambling.
In Arizona, players must be competing on equal terms, and all players must be 21 or older.
Office Pools Not Permitted. Idaho and New Mexico strictly regulate gambling and do not permit office betting pools. Utah prohibits all forms of gambling, including social gambling, so office betting pools are prohibited.
Assuming social betting and office betting pools are legal in your jurisdiction, what additional considerations should you take into effect when deciding whether to permit them within your organization? Well, to avoid a potential federal violation, if you have employees in more than one jurisdiction, participation should be limited to employees in the same state. You should also weigh the potential loss of productivity resulting from employee participation against the benefits to be gained in the form of increased camaraderie and morale. It is also important that workers’ participation be strictly voluntary as some workers may object to gambling on religious grounds. Therefore, no one should feel pressured to participate. Finally, employers should recognize that team loyalty and team rivalries will undoubtedly arise. Therefore, employees should be encouraged to keep all conversations civil and to treat each other with respect. Above all, participation in an office betting pool should be fun.
If you have questions about whether to permit your employees to participate in sports betting pools at work, Employers Council attorneys and HR Consultants are available to assist.
Barbara Bagdon is an attorney with Employers Council
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