HR Management & Compliance

Best Defense Is Good Offense: Preparing Your Office for Legal Sports Betting

Football season has kicked off, and baseball playoffs and basketball season are just around the corner—make no mistake about it, your employees will be gambling. From interoffice fantasy sports, to seasonal bracket challenges, to weekly pick ’ems, workplace gambling is more commonplace than you might think. And you can expect an increase in workplace gambling after the U.S. Supreme Court recently struck down a federal law that prohibited sports betting, thereby paving the way for states to legalize the practice.

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Proponents argue that workplace gambling increases interoffice camaraderie and boosts morale. However, opponents point out that workplace gambling may violate company policies and the law, decrease productivity, and harm employees struggling with gambling addictions. Maine doesn’t currently authorize sports betting, and it doesn’t look like we can expect our lawmakers to consider such a bill anytime soon. Nevertheless, you should get ahead of the curve and update your workplace policies to prepare for the impending sports-betting blitz.

Challenge Flag

In the Supreme Court case, four major sports leagues (the NFL, NBA, MLB, and NHL) and the NCAA—which I’ll collectively refer to in this article as the “leagues”—united to challenge a New Jersey law that purported to clear the way for legalized sports betting in that state. The leagues argued that the New Jersey law violated the Professional and Amateur Sports Protection Act (PAPSA), which generally makes it illegal for states to authorize sports betting. Ruling in favor New Jersey, the Court struck down the PAPSA, finding it unconstitutionally infringes on state sovereignty by requiring states to enforce a federal policy.

The Court’s ruling opened the door for states to pass laws permitting sports betting throughout the nation. The American Gaming Association estimates that Americans illegally wager $150 billion on sports each year, a sum that represents lost taxable revenue an estimated 32 states hope to cash in on by legalizing sports betting over the next five years.

The Court’s decision will likely have an impact on workplace gambling. Even though the ruling merely permits states to legalize gambling and doesn’t change the legal landscape overnight, it’s widely viewed as a major step toward normalizing what has traditionally been viewed as a vice, and it may give your employees the impression that office gambling is no big deal. Employees already participate in a variety of interoffice gambling schemes. In 2013, a Vault survey estimated that 70% of employees have participated in office betting of some kind. With legalized sports betting on the horizon, we can anticipate an increase in workplace gambling.

Refereeing Gambling in Maine

Several states are poised to legalize sports betting in the coming weeks and months, but Maine is behind the eight ball. State lawmakers don’t expect bills addressing sports betting to be introduced until the 2019 legislative session. As it currently stands, sports betting in Maine is illegal.

Under Maine law, gambling is defined as risking something of value on the outcome of a contest of chance or a future event outside a person’s control in exchange for something of value. Examples of gambling include wagering tomorrow’s lunch that the Red Sox will beat the Yankees or betting $12 that Tom Brady will retire before the start of the 2019 football season. Some people argue that sports betting doesn’t qualify as “gambling” because it involves an element of skill, but that argument is legally ambiguous at best, especially because only a small percentage of gamblers routinely win more than half of their bets.

Unlawful gambling is punishable by up to three years in prison, but Maine carves out an exception for “social gambling,” a category in which workplace gambling arguably could be placed. Social gambling is essentially gambling that nobody profits from (not including the winnings) and can include bracket-type office pools or bets between coworkers. Further, employees may take advantage of several other gambling options. In 2017, Maine legalized cash-entry daily fantasy sports, and nothing in Maine’s gambling laws expressly prohibits online gambling.

There are also federal laws that apply to some types of sports betting and gambling, although they focus on professional “bookies” and criminal organizations that accept bets across state lines. The confusing maze of sports betting and gambling laws can be difficult to navigate, especially for businesses with locations in more than one state. Businesses that take a laissez-faire approach to workplace gambling may expose themselves to liability by allowing gambling to get out of hand. Further, businesses that actively facilitate workplace gambling may be charged with “bookmaking,” which is illegal under Maine law and entails accepting bets and turning a profit. Legal issues aside, you should weigh the various pros and cons before permitting gambling in your workplace.

Scouting Report

Many HR experts advocate for some form of workplace gambling. In fact, industry data estimates that about 60% of U.S. businesses don’t have antigambling policies. Experts promote interoffice pools and tournament challenges to foster interoffice camaraderie and increase morale as different offices or departments compete for bragging rights. Further, competing against each other may give employees who don’t usually interact outside their day-to-day duties an opportunity to bond and explore shared interests.

And what’s the harm in losing a few bucks in a small-time interoffice gambling contest? Most people lose, the loss is inconsequential, and people go on their merry way. No harm, no foul. With the recent Supreme Court decision, you can imagine the thrill and excitement pulsating throughout the office as employees join forces to bet on the Patriots’ Monday Night Football game.

However, workplace gambling can also get out of hand, breeding disharmony and tension in the office. If the stakes are high, competition can create bad blood or even sever cordial relationships between coworkers. Further, if some employees feel excluded from the fun, they may believe they’re being discriminated against because of their race, gender, disability, religion, or some other protected characteristic. Employees who don’t partake in workplace gambling may grow resentful, especially if the boss participates and they perceive that an “elite group” of coworkers is scoring brownie points.

Additionally, workplace gambling hinders productivity. Studies estimate that $2.1 billion in lost wages (money paid for work not performed) and lost workplace productivity are linked to the NCAA’s March Madness college basketball tournament alone. Lost productivity translates to missed deadlines, delayed decisions, and damaged client relations.

Finally, about 1% to 3% of the adult population suffers from compulsive gambling. In reality, that number might be much higher because fewer than 15% of compulsive gamblers seek help. Compulsive gambling affects an employee’s well-being and may manifest in other forms of impairment, such as drug abuse, depression, or anxiety. Permitting gambling in the workplace may exacerbate those problems.

Game Planning

Whether or not your business chooses to allow workplace gambling, there are several ways to protect your blind side from legal liability and interoffice turmoil. First, if you allow workplace gambling, familiarize yourself with the applicable state and federal laws to ensure that you aren’t permitting illegal activity. Additionally, communicate your company policies and expectations for workplace conduct and acceptable uses of company resources. That may entail training your supervisors to monitor workplace behavior for gambling activity.

Crucially, you should look out for employees who may feel excluded from or pressured into participating in office gambling schemes and for employees who exhibit signs of compulsive gambling, such as absenteeism, decreased productivity, and repeated requests for pay advances. Increased awareness of those issues may help you avoid a future discrimination or harassment lawsuit. Finally, as a best practice, you shouldn’t formally sponsor workplace gambling events. Although the Supreme Court opened the door to nationwide sports betting, Maine’s door remains shut.

Even if certain workplace gambling activities are legal in Maine, businesses have the right to circumscribe employees’ conduct in the workplace. If your business prohibits gambling at work, communicate your rules and expectations, and make employees aware of the potential disciplinary action for violations. You can use Internet firewalls to block fantasy sports or gambling sites or otherwise prohibit the use of company resources for workplace gambling. Be sure to consistently apply your policies across all departments and at all levels of employment.

Because the Americans with Disabilities Act (ADA) doesn’t recognize compulsive gambling as a disability, you don’t have to provide reasonable accommodations for employees who are compulsive gamblers. However, as mentioned above, compulsive gambling is typically accompanied by a host of other problems, which you may need to reasonably accommodate.

Final Score

The play clock is ticking. The Internet facilitated the rapid expansion of fantasy sports and online gambling, and workers around the United States, sheltered in their cubicles or offices, have used company resources to fuel their gambling hobbies. Now that the Supreme Court has greenlit legalized sports betting, it’s a safe bet that wagering workers will increasingly indulge in their pastime. If you choose to permit gambling in your workplace, you should double down on the many ways to keep gambling in check and ensure that it doesn’t disrupt your business’s team chemistry.

Matthew Farnum was a summer associate with Brann & Isaacson and a contributor to Maine Employment Law Letter. For questions about this article, contact Connor Beatty at CBeatty@brannlaw.com.