Is March Madness a Concern for Employers? You Can Bet On It!

The shrieks of rubber-soled sneakers, blasts of air horns, whooshes of nets, and screams of fans are permeating arenas all over the country. It can only mean one thing — March Madness is once again upon us. March Madness and the annual National Collegiate Athletic Association (NCAA) Men’s and Women’s Division I Basketball Tournaments routinely trigger countless office bracket contests and big distractions for workers. While March Madness can be an opportunity to boost employee engagement and workplace morale, it can also be a point of frustration for employers with the potential for lost productivity.

The spread of legalized sports wagering has only added fuel to the potential flame of distraction, and created additional concerns for employers. The American Gaming Association (AGA) estimates that a quarter of all adults in the United States, or 68 million, plan to wager on the men’s basketball tournament and 56.3 million individuals will participate in bracket contests. As the tournament games tip off, here are some issues employers may want to consider.

Betting Concerns

Since the Murphy v. National Collegiate Athletic Association decision, in which the Supreme Court of the United States ruled that the Professional and Amateur Sports Protection Act’s ban on state legalization of sports betting was unconstitutional, sports betting at retail or online sportsbooks is now legal in more than half the states across the country and the District of Columbia. However, while many commentators have erroneously characterized the Murphy holding as legalizing sports betting, the decision merely opened the door for states to control whether and how wagering is regulated in the state.

Sports betting is still not legal in several states, notably California, Florida, and Texas. Further, federal law still poses restrictions on the placing of bets or the transmission of betting information across state lines. Even in states where sports betting is legal, it remains highly regulated and states differ on what betting activity is permitted. For instance, New York is one of a handful of states that prohibits placing bets on games involving in-state college teams out of integrity concerns with amateur college athletes.

As such, sports betting in workplaces continues to present some legal concerns for employers. While many employers likely will have at least some workers who place bets or participate in bracket pools, employers may want to be careful to avoid actively sanctioning such activity, particularly on company-owned devices.

Lack of Productivity

Over the next few weeks, workers may be glued to phones, computers, and television screens rooting for their alma maters or favorite teams or hoping to win big on sports bets. Studies suggest that the average worker will spend six hours watching March Madness games and that corporate losses due to unproductivity during March Madness could exceed $16 billion. Further, while sports betting either among colleagues or through unregulated means has long been popular, the Murphy decision spawned a proliferation of easily accessible and above-board betting options that may only further affect productivity. According to the AGA, a whopping 31 million Americans plan to place a wager online, at a retail sportsbook, or through a “bookie.” Employers may want to take note of the tournaments’ potential to distract workers and consider ways in which they can engage workers while keeping them on task.

Network Activity

The use of company devices and networks to monitor March Madness-related activity may result in a significant degradation in performance of company computer networks. Most office pools likely are managed through online platforms and online and mobile apps. These apps make it possible to stream live games on mobile phones and computers, watch highlights, and follow the game statistics in real time. Further, several gaming companies have launched apps that enable users to place bets on their mobile phones anywhere in a state where such activity is legal. Employers may further want to review and update device and computer network usage policies to restrict activity that could be illegal or harm network performance and may want to consider reminding employees of these policies during March Madness.

Ogletree Deakins will continue to monitor and report on developments with respect to concerns for employers with sports betting and will post updates on the firm’s Sports and Entertainment blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.