It is estimated that the 100 million dollars in wagers that Nevada sports books accepted for the 2014 Super Bowl accounted for just 1% of all Super Bowl betting last year; and the total amount of money wagered on the upcoming Super Bowl, both legally and illegally, is expected to surpass 10 billion dollars. In other words, the action on Sunday’s matchup between the Seattle Seahawks and the New England Patriots is projected to exceed the annual GDP of more than forty countries.

Is my office Super Bowl block pool/fantasy football game legal?  Most likely not.

Many bets on the Super Bowl are made in the form of office “block pools” and fantasy football style wagers. While both forms of Super Bowl betting are often low stakes, they are technically illegal in most states.  The Professional and Amateur Sports Protection Act of 1992 (“PASPA”) limits sports betting to just four states: Oregon, Delaware, Nevada and Montana.  Several other states have carved out “exceptions” to the PASPA for games of chance such as block pools, but the exceptions are often narrow and have limited applicability.  For example, Pennsylvania recently enacted legislation that legalizes certain small “games of chance.” However, the legislation only exempts certain licensed clubs and volunteer organizations and has strict rules regarding stakes and prize money. Moreover, Pennsylvania’s legislation explicitly requires compliance with PASPA; and both the Pennsylvania Department of Revenue and Pennsylvania State Police have taken the position that the new legislation does not legalize block pools for professional and amateur sporting events.

While the PASPA serves to bar gambling on sporting events in a majority of the United States, the 2006 Unlawful Internet Gambling Enforcement Act (“UIGEA”) was enacted to specifically govern online gambling. The UIGEA prohibits nearly all types of online gambling, but exempts most fantasy sports competitions, classifying them as games of skill rather than games of chance.  As a result, the amount of money wagered on fantasy sports, particularly fantasy football, has increased exponentially since 2006. However, the UIGEA has been interpreted to bar fantasy football competitions that are based upon only the Super Bowl.  The basis for this nuance is that a fantasy football competition based upon a single game has a limited number of outcomes as well as a limited number of players/teams from which participants can choose, thereby converting it into a game of chance rather than a game of skill. 

What are the odds of getting caught?  Pretty slim.

Given the billions of dollars wagered on the Super Bowl, enforcement of the PASPA is nearly impossible. Last year, the Commissioner for the Pennsylvania State Police acknowledged that State Troopers would not actively target Super Bowl betting pools, but warned that the State Police would investigate any gambling activities that they come across in the course of their official duties.  Other states have taken a more proactive approach to enforce the PASPA. Over the past two years, Indiana police reportedly seized approximately $300,000 from various establishments running Super Bowl betting pools.  Accordingly, if you choose to gamble on the Super Bowl, it is best to look into how your state enforces the PASPA because you may be gambling with your criminal record. 

It’s all in good fun, right?  Not always.

Notwithstanding that gambling on the Super Bowl is illegal in most states, employers should be wary of potential retaliation and hostile work environment claims that can arise when employees are either excluded from or uncomfortable with office gambling.  For example, in Green v. Port Auth. of N.Y. and N.J., No. 07-3910, 2009 U.S. Dist. LEXIS 100871, 2009 WL 3627962 (D.N.J. Oct. 29, 2009), an employee alleged that he was retaliated against for reporting his co-workers for gambling at the work site. The District Court granted summary judgment in favor of the employer on grounds that reporting co-workers for gambling is not a “protected activity” under Title VII.  Although the employer successfully defended the claim, the Green case demonstrates how quickly litigation can arise when employees feel uncomfortable with workplace gambling. Similarly, employee gambling in the work place may serve as the basis for a discrimination or hostile work environment claim, as an employee may assert that he or she was purposefully excluded from participating in a gambling activity because of his or her membership in a protected class.  If that employee can demonstrate that similarly situated employees outside his or her protected class were allowed or asked to participate in the gambling activity, the employer may be subject to liability.

Play it safe.

The safest bet for employers (and employees) is to refrain from any type of workplace gambling, as it is generally illegal, and may expose employers to civil and/or criminal penalties under the PASPA and relevant state law. Even if gambling on the Super Bowl is legal in the jurisdiction, the employer still remains exposed to retaliation or discrimination claims arising from employees who feel they are either being excluded or mistreated for failing to participate.  If an employer in a jurisdiction that permits gambling elects to sponsor or permit any type gambling on the Super Bowl, it is best to follow a few simple guidelines:

  • Implement a gambling policy that identifies the type of gambling that is permitted, when the gambling is permitted, and the consequences for violations of the gambling policy.
  • Provide all employees with the contest rules for any employer sponsored gambling.
  • Ensure that all employees are given an opportunity to participate.
  • Ensure that all entry fees are accounted for and paid out to the participants.
  • Identify a procedure by which employees can file a complaint or voice their concerns.

Looking forward to March Madness already?  Check out last year’s article on office NCAA bracket pools here.