Are workplace sports-betting pools illegal?

In most cases, yes. Though commonplace during major sporting events, gambling in the workplace—including sports betting and office pools—can actually violate several laws. While law enforcement historically hasn’t taken the time to enforce anti-gambling laws for office pools, an employer should understand the laws and know the risks.

Federal and State Law

Gambling is prohibited by three federal laws—the Professional and Amateur Sports Protection Act of 1992, the Interstate Wire Act of 1961 (often called the Federal Wire Act), and the Unlawful Internet Gambling Enforcement Act of 2006—which outlaw betting on professional or amateur sports as well as using the internet for interstate wagers and unlawful gambling. However, 38 states and the District of Columbia permit some sports betting. Since placing sports wagers remains illegal in many states, allowing your employees to engage in online betting, possibly with out-of-state employees, might violate these laws.

State laws vary. A few states allow small pools that limit entry fees and forbid the “house” (the employer) from keeping any winnings. But be aware that federal laws still apply.

Employee Relations

An employer’s risk tolerance for unlawful activity will guide its decision on allowing gambling at work. An employer also should weigh the inevitable loss of productivity during the event against the benefits of increased employee morale and camaraderie.

Since internet streaming makes it easy to watch an event during the workday, employees can likely find a way to tune in. They might use their personal devices or company computers, quickly changing the screen when the manager walks by.

While employers can block any tournament-related activities during work time—and for some jobs they should—another option is to allow employees to choose how they use their time as long as they get their work done. Some ideas for making that work include the following:

• Set up a company-sanctioned pool with no entry fees (thus, no gambling). The winner could receive a prize from the employer, such as a gift card, movie tickets or an extra vacation day. Or the employer could donate to a charity of the winner’s choice. Even those not interested in sports might join in the fun.
• Designate approved zones for watching the games, perhaps providing a TV. Ensure that employees who aren’t interested in the games have a quiet area to take their breaks.
• Remind employees of the company’s anti-harassment policy. Some workers may object to gambling for religious reasons, and they should not be pressured to participate.
• Encourage employees to keep all bet-related conversations civil. Tempers may flare, especially if team allegiances are at play, but employees should treat each other with respect at all times.