Office pool madness

Gavel to Gavel

published in The Journal Record | March 16, 2017

By Zach Oubre

For the 50 million Americans who are expected to participate in March Madness office pools this year, hope springs eternal … that is, until the official first round tips off and brackets begin busting. But for now, there’s always the chance.

And if you work at any Berkshire Hathaway company, the prize is especially grand this year, as Warren Buffet has offered $1 million a year for life for any employee who can correctly pick this year’s Sweet 16 teams. That’s no small feat: ESPN reported only 14 perfect Sweet 16 picks from the more than 11.57 million brackets filled out last year on ESPN’s online Tournament Challenge.

While allowing employees to participate in a March Madness office pool seems harmless – in fact, some would say it’s a good way to build esprit de corps – employers should be aware of the risks involved.

While office pools such as these are widespread, they are technically illegal in Oklahoma. And even though the odds are low that laws will be enforced for low-wager office pools, employers should be aware that company-sponsored office pools face significantly higher risk, as the penalties for sponsoring and housing gambling activities can be harsher than engaging in them.

So, as an employer, the liability for your annual office pool may be more than you’d expect. An alternative to a pool for money is to turn each bet into a charitable donation where the winner gets to decide where to donate the winnings by selecting from a preapproved list of charities. Another alternative is to not charge an entrance fee and to award a non-monetary prize.

Undoubtedly, the most significant risk to businesses is the loss of productivity. One executive outplacement firm estimated that last year’s NCAA men’s tournament resulted in a $4 billion loss of productivity, nearly a third of which was in the form of compensation to employees who were watching the games online or on TV rather than working.

And finally, if your business has an anti-gambling policy, then, like any other policy, it should enforce it fairly and consistently. Picking and choosing when to enforce the policy can lead to other issues. For example, a terminated employee may argue that the employer illegally discriminated when the employer applied the policy in his or her case but not to those involved in an office pool.

This article appeared in the March 16, 2017, issue of The Journal Record. It is reproduced with permission from the publisher. © The Journal Record Publishing Co.