[Updated March 12: The NCAA canceled the men's and women's college basketball tournaments due to the coronavirus outbreak.]
In the run-up to March Madness, office workers will soon fill out their brackets and bet on which combination of teams in this year's NCAA men's basketball tournament will make it to the Final Four in Atlanta and which team will win it all.
For many employees, the office pool is a fun tradition at the start of every spring. But is it smart for employers to allow gambling in the office?
On the one hand, letting employees throw down $10 or $20 to bet on top seeds, an alma mater or "Cinderella" teams can create office camaraderie and boost morale. But there are risks, too. Some worry that employees who are fixated on the basketball games will shirk their work; others are concerned that office pools will open the company up to legal problems.
"Like so many things, there is always a balance," said Michael Schmidt, vice chair of law firm Cozen O'Connor's labor and employment department in New York City. Allowing employees to engage in banter or creating events around March Madness can boost morale, he noted, "but you have to be able to work in the office and don't want it to become like the Wild West." To that end, employers must relay the expectation that employees will keep up with their work amid the revelry, he said.
Betting on March Madness is a common practice. One in 5 adults placed a bet on the 2019 NCAA men's basketball tournament, according to the American Gaming Association (AGA). An estimated $8.5 billion in bets were placed in casinos, through bookies, online and in office pools.
Given the popularity of March Madness pools, most employers are reluctant to put the kibosh on them, even if employees become distracted, sneaking peeks on their smartphones or screaming at the TV in the lunchroom.
"Most employers view lost productivity as a price worth paying because [the tournament is] such a morale booster and they don't want to look like Scrooge," said Peter T. Shapiro, a partner in the New York City office of law firm Lewis Brisbois Bisgaard & Smith.
Shapiro has this advice for employers: "Just make sure that the betting aspect is not done by the company. As long as the entry pools are coming from an individual and not the Acme Company official pool, you'll probably steer clear of any legal problems. It seems unlikely that a police department or prosecutor is going to get involved with something like that. They're more interested in things like organized crime gambling."
There are 14 states where sports gambling is legal, plus another six states and the District of Columbia where laws permitting it have passed but are not yet operational, according to the AGA.
To minimize legal risks in those jurisdictions where sports gambling is permitted, it's important to not let anyone skim anything off the top and to keep the buy-in small so it will be considered social gambling, employment lawyers said.
"The larger the dollar amount, the more it puts the company at risk," said Ann-Marie Ahern, principal and employment lawyer at McCarthy, Lebit, Crystal and Liffman Co. in Cleveland. "What if someone is accused of submitting a bracket late or rigging it in some way or picking their friends? As employers, how do you mediate?"
In lieu of the risk of a winner-take-all cash pot, some companies hand out a gift card prize to the winner, she said.
Companies should also make it clear that the pool is voluntary and open to anyone, employment lawyers said, and should not exclude people of, say, a certain gender, age group or race.
Some employers allow employees to wear shirts with college logos or to set up a TV in the lunchroom to keep basketball distractions out of the work areas. Shapiro cautions against disciplining employees for not being at their desks, as this could open the company up to discrimination claims. "[The disciplined employee] might say, 'Hey there were 40 people in the break room cheering on Michigan State. I like Michigan State, too. You did this because of my religion or race.' This is not the time to single out employees for discipline."
Though a study by WalletHub estimated corporate losses due to March Madness were about $4 billion in 2019, Ahern believes that distractions caused by the basketball tournament are an overstated concern. "Employees are so distracted by their phones and social media [throughout the year] at a tremendous loss of productivity to employers. I don't think March Madness is a significant threat. Anytime you walk by anyone's desk, they have their phone out."
March Madness in the Time of the Coronavirus
Imagine March Madness without face-painted basketball fanatics cheering on their teams.
In a prepared statement, the National College Players Association (NCPA) asked the NCAA to consider holding the famed tournament without the fans present in light of the health risks posed by the coronavirus, also known as COVID-19. The players association also has urged other precautions, such as cancelling press events and meet-and-greets with the public. Collegiate athletic programs should sanitize buses and airplanes used to transport players, it added.
In its own statement released on March 3, the NCAA said it was planning to conduct its championships as planned at this point but would evaluate the situation daily and make decisions accordingly.
"The NCAA is committed to conducting its championships and events in a safe and responsible manner," said Donald Remy, NCAA chief operating officer.
The NCAA has also established an advisory committee of medical, public health and epidemiology experts from NCAA member schools to guide its response to the outbreak of the coronavirus and is in daily contact with the Centers for Disease Control and Prevention to monitor the situation.
Cristina Rouvalis is a freelance writer based in Pittsburgh.