March Madness in the Corporate Culture

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Last week, Johnny weighed several important factors in order to make a difficult and potentially costly decision. Could Florida pull off the impossible and win back-to-back championships? Would this be the year Kansas avoids choking and actually lives up to their reputation as a top-seeded team? Or better yet, would a freshman lead Ohio State to victory? If at this point in the column, you're uncertain what I'm referring to, don't worry — a few days ago I would have been in the same club. But, I am wising up and learning — welcome to March Madness!

“It's like the Super Bowl every day for four days,” exclaimed one prominent Las Vegas bookmaker, as he described the sheer insanity that takes over every spring during the long awaited NCAA tournament. Professional betting analysts estimate that about $2 billion will change hands during the tournament. But Sin City isn't the only place where fans are cashing out. This week, offices around the country may start to look and act more like recreation rooms than places of business as the corporate culture embraces the basketball frenzy. “While buzzer beaters and upsets grab headlines, what really captivates millions is their vested interest in office pools, rather than the performance of their favorite team or alma mater,” quips Simon Noble, founder of an online sports book service in St. John's.

According to a survey by the Society for Human Resource Management (SHRM), 30 percent of companies that responded admitted operating some sort of March Madness gambling pool — and the true number is sure to be far greater than that. I hate to point out the obvious and ruin the party, but these NCAA office pools are — how shall I put this gently — illegal.

I understand that law enforcement isn't going to send in a team of undercover cops to infiltrate office-betting pools, but the practice is still illegal. Agents wouldn't have to look far since the practice is so widespread, but if you are a law-abiding citizen (and even if you turn a blind eye for this) and you're wondering exactly what the problems are (and how to avoid them), keep reading.

I'll start with the bad news first. Although betting on tournaments becomes as common as checking your e-mails, some workers and managers say the pools hurt productivity. Filling out brackets takes time and can distract you for the duration of the games. Additionally, money can be lost, stolen or skimmed off the top by the pool's organizers. Then, there's the legal or not so legal side of office gambling. The Federal Wire Act prohibits the operation of certain types of betting businesses in the United States. The Act, written decades before the explosion of the Internet, prohibits gambling over telephone lines. However, it's unclear whether it accounts for the emergence of new technology. The Department of Justice interprets the Act to mean that all online gambling is illegal. However, U.S. Courts have ruled to the contrary. Also, many believe the phrase "in the business of" means only businesses are affected. Some argue that the law only covers sports betting, and not other forms of gambling, such as poker.

The U.S. Fifth Circuit Court of Appeals has ruled that the Federal Wire Act applies only to sports betting and not other types of online gambling. The Supreme Court has yet to weigh in on the debate pertaining to online gambling.

CEOs working in offices that may feel more like a casino for the week are faced with the question of “ whether or not an employer should have a policy prohibiting such pools,” says Marc Terry, an attorney a Massachusetts firm that represents hundreds of businesses in labor and employment law. “If an employer does have a policy, it should be enforced consistently.” A company can't pick to punish Jenny and not Jerry. But really, who wants to be the buzz kill? After all, supervisors are likely to enjoy the office pool as much as their employees, and participating in the action isn't all bad.

Many of these office pools actually foster camaraderie. One way to minimize headaches is to legitimize the action. Twenty-three percent of businesses turn what could be an annual workplace negative — the massive headache caused by loss of productivity and the sanctioning of an illegal practice — into a positive event. Some companies use the games, many of which are played during work hours, to strengthen the workplace team and morale. Serentac, a pharmaceutical company in the basketball-loving town of Raleigh, N.C., appoints a recreation committee to run its March Madness pool. In order to legalize the office pool, employees pay nothing to enter and the company puts up a prize at the end. Since there's no chance of a financial loss, it's not technically gambling and therefore perfectly legal.

Other sports-loving offices wheel in big screen TVs, buy pizza and encourage staff to wear their favorite college sweatshirts and jerseys. OtterBase, a staffing firm in Michigan, says, their March Madness traditions have ballooned into a “company wide, bracket-filling, cubical decorating, buzzer-beating basketball watching party.” The winner of the pool gets lunch and drinks paid for on the company by the losing entrants. I certainly wouldn't mind working at a place like that! Experts say bringing the game watching and winner picking out into the open encourages co-workers to socialize and reduces underground gambling and extended office breaks.

Since I gave you the quick 411 on the pros and cons of office gambling, let me at least give you a few tips that I've learned the past few days (kindly provided by an ESPN expert Dick Vitale). I am sure, if you're like most entrepreneurs, you're never content finishing in the middle of the pack — so why even bother to enter a March Madness pool if you're not going to win?!

Here's my tips:

(1) Be skeptical of big names. Don't always bet on the powerhouses.

(2) Don't waste your time on a No. 16. None has ever upset a No. 1 seed in the current format of the tournament.

(3) See how teams end the season. Look for teams that play really well in their last 10 games.

(4) Disregard tips 1-3. Vitale confesses that picking winners is really just a guessing game.

Bottom line, most companies, at least those without dictators for bosses, won't care if an office pool is run by their employees — as long as it doesn't interfere with work and doesn't get too out of control. I'd be willing to bet most bosses would probably feel excluded if they're not asked to participate.


Are office pools illegal?
The Web: Wagering on 'March Madness'
Corporate Culture: A-Betting March Madness
You can still bet on it: Gambling and March Madness
Score at work with March Madness
Fun at Work
Beating the March Madness Odds
Federal Wire Act

• E-mail Lis With Your Legal Questions!

Lis Wiehl joined FOX News Channel as a legal analyst in October 2001. She is currently a professor of law at the New York Law School. Wiehl received her undergraduate degree from Barnard College in 1983 and received her Master of Arts in Literature from the University of Queensland in 1985. In addition, she earned her Juris Doctor from Harvard Law School in 1987. Lis is also the author of The 51% Minority — How Women Still Are Not Equal and What You Can Do About It. To read the rest of Lis's bio, click here.