March madness will soon be underway. But are office pools legal? As employment lawyers, is it our responsibility to wipe out another hallowed workplace tradition just like we did with binge drinking and sexual harassment at office holiday parties?
In California, according to Penal Code section 337a, gambling can be a felony or a misdemeanor. But Penal Code section 336.9 creates an exception for betting pools between people who are not acting for profit, other than the same stakes available to every participant. The exception applies as long as the pool isn’t being run online and no more than $2,500 is at stake. This doesn’t make the pools legal. But instead of a potential felony, it’s an infraction and the maximum penalty is a $250 fine.
So are the pools illegal? Technically, yes. But they’re just a little illegal. For most people, the odds of getting in legal trouble for an office pool are very slight. But probably not as slight as the odds of a 16th seed winning the NCAA tournament. The WSJ puts those odds at 384,000,000 to 1.