No timeouts for employers during March basketball and brackets - guidelines to workplace gambling

Revised Version 2/27/20

Basketball in March provides one of the most exciting sports events of the year. During this time, however, the basketball court isn't the only place where fouls can occur. The hysteria around the March tournament often finds its way into the workplace -- creating potential problems for business owners and their human resources teams.

Monthlong, Daytime Tournament Presents Unique Challenges

Because the March basketball tournament is one of the few huge sporting events that takes place during normal 9-5 work hours, it creates some unique challenges for employers. Millions of employees participate in office pools and watch the games, sometimes at work. One study estimates that during the March tournament, each employee spends six work hours per week engaged in related activities. The same study estimated employers suffer a $13.2 billion loss in productivity during the tournament.

The March basketball tournament also raises illegal gambling concerns for employers. Office pools often require a buy-in, with the winner getting a cash payout. Although a few states have legalized gambling, it remains illegal in most and is illegal under at least three federal laws. Participation in unsanctioned gambling can also run afoul of workplace policies and lead employees to the exit doors.

Policies Must Be Clear and Consistent

If a company has a policy against gambling at work, participating in a pool like the March tournament with a cash buy-in violates not only the law but obviously the policy. It is never too late to issue a statement that "gambling is against company policy and won't be tolerated", or simply eliminating the policy if there is not an intention to abide by it (or at least stating that the March basketball pools are ok if certain rules are followed).

Computer use and cybersecurity are also issues of concern to employers. Employees often use their company computers to watch games and monitor their brackets. Additionally, some employees may access gambling websites to place wagers, which may subject the system to malware. IT departments can utilize software which blocks these websites.

Competitive sporting events bring out the best -- and sometimes the worst -- in fans. Although there is nothing wrong with some good natured banter between employees cheering for opposing schools, the triumph (or heartbreak) on brackets can escalate these comments to the level of bullying and harassment, which may subject an employer to potential liability.

Inevitably, some employees may call out sick so they can attend or watch the March tournament. Although a diminished workforce may frustrate the employer, some state laws prevent employers from asking employees for verification for absences of only a few days. In some states, having the "Hoops flu" may be beyond an employer's reach to question.

Key Takeaways for Employers to Consider

Employers Need to Review Their Policies

An employer should review its anti-gambling, attendance, and harassment policies and make sure they are applied consistently to all employees. Selectively enforcing a policy will subject an employer to potential discrimination claims and also create ill will among employees, a real foul.

It is fine to allow betting during the March tournament, but again, the policy should reflect this and should be applied consistently. The company should require that any monetary pool distributes all entry fees to the winners so that there is no "cut" taken by the organizer. Otherwise, a pool with a cut becomes an entirely different legal category and is no longer "social" gambling, which many states allow, where no third party can take a portion of the money.

Employers Need to Remind Employees of Their Computer Use Policies

Employers should specifically tell employees they have no expectation of privacy in their use of company equipment. Employers should also consider installing software that blocks gambling sites.

Employers Need to Ensure Employees Do Not Feel Pressured to Participate

Some employees may not participate on religious or moral grounds and employers need to make sure that choice is respected and that other employees do not ostracize the employee. An employer may consider offering a free, office sponsored event that does not offer cash prizes and can even host watch parties to allow everyone who wants to openly watch and develop comradery.