Is Your NCAA Tournament Pool Illegal?: Who do you have in the Elite Eight? Which #12 will upset a #5? Do you think Pitt can win it all? If it is March, it must be NCAA Tournament pool time. Along with flowers blooming and spring training, plucking down $5 and agonizing over the 7-10 matchups has become a rite of spring. Some experts predict that more than $1.5 billion in productivity will be lost over the next three weeks as workers schedule out-of-office "meetings" and cheer for the mighty Davids, so long as their alma mater is not the Goliath.



But gambling is illegal in the United States, isn't it? Sure, there are exceptions, like Nevada, Atlantic City and Indian reservations-- but doesn't this country frown on such moral turpitudes? The short answer is yes, but you are probably ok anyway. In most states, gambling, even in a small-stakes pool, violates state anti-gambling laws and could subject you to a misdemeanor. If you take the initiative to organize the pool, you could be subject to a felony in some states, or possibly even liability under federal law. In the research I have done, only Montana has turned up as allowing tournament pools under a de minimis exception to the gambling laws, and Texas law appears to permit the pools so long as the organizer does not take a cut or fee for his/her troubles.



So, should you flee the state for your illicit activities? Most police and government officials say no. In most cases, the government is not interested in cracking down on $100 pools (though your employer may have a different opinion). Usually, the police do not get involved unless (1) you have ignored your employer's request to stop, (2) your pool is so large that substantial sums of money are involved or (3) there are minors implicated. Other than that, you could get fired (remember Rick Neuheisel?) but you will probably not be arrested.



However, some state officials, including those in Charlotte, have warned that offenders could be prosecuted, no matter how small the stakes. In addition, everyone should remember that gambling on the Internet remains illegal under federal law (see below). Thus, before making your presence as the local kingpin too well known, check and see if your local law enforcement is cracking down.



Finally, gambling can cause legal problems in one final, but often forgotten manner: income tax. Gambling winnings must be reported as income on your federal income tax sheet. The chances of an audit turning up that $100 won in a cash pool are not high, but you never know.



So, while many states turn a blind eye to the illegal madness of March, keep in mind that this does not have to be the case. Now, where did I put my bracket?



Note: Please keep in mind that this is intended for amusement or research purposes only. In no way should this be construed as legal advice or counsel. I am not (yet) a lawyer and I am not representing myself as one. If you get arrested, I hope you can read this Blog in prison, but I am not responsible. Thank you.

Posted in: