With the Super Bowl taking place this weekend and March Madness just around the corner, many offices are abuzz with discussions of squares, brackets, and other sports-betting pools. The benefits of company-wide contests are evident, with numerous workplace satisfaction surveys indicating that employees who participate report that it increases their level of engagement at work. While these seemingly innocuous office pools can boost morale and foster camaraderie (particularly for employees who work remotely or in a hybrid structure), they may pose potential risks for employers, particularly those in jurisdictions where laws regarding sports betting are murky.
Since the US Supreme Court struck down the federal prohibition on sports betting in 2018, 38 states and Washington D.C. have legalized the practice. The regulations on sports betting run the gamut, and some include narrow exceptions permitting office box pools if certain conditions are satisfied; for example, so long as no one running the pool profits. Even the states that have legalized sports betting are still hammering out the fine details, with New York having introduced a bill just last year to specifically legalize Super Bowl squares.
Office pools will likely persist. The seemingly constant stream of new laws attempting to regulate the industry can create legal risk for employers, particularly where new, sometimes conflicting interstate laws continue to be introduced, including variations on the legal betting age. Employers should consider ways to mitigate their risk, including by first determining if they are operating in a state where these types of pools are banned, and if they are permitted, how to ensure they fit within an applicable "social" gaming exception. Employers should look to limit pools to local offices where they are permitted, limit the buy-in fee, have all proceeds go to a charity of the winner's choosing or ensure that all money gets paid out to the winners, confirm that the organizer does not receive a share of the proceeds, and most importantly, they should ensure employees are not pressured into participating.
The Mintz Employment practice is ready to answer any questions about the particular legal risks your organization may face.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
