The NFL season is kicking off on the first Sunday (Sept. 13), and for those participating in fantasy football pools at the office, there is more at stake than just a small financial loss. Engaging in these bets could potentially lead to criminal charges and even jail time.
Marc Edelman, a law professor at the Zicklin School of Business, Baruch College, discussed the complexities of fantasy sports law and its implications for office pools with Casino.org.
Office NFL fantasy pools have been a point of discussion for years, especially with the increase in remote work allowing employees to join from different states and countries. When bank transfers are involved, what appears to be a harmless office pool can turn into a legal dilemma for both employers and staff.
If these office pools involve participants from multiple states, then they clearly fall under the Federal Wire Act. As a technical matter, although almost never prosecuted, they do violate federal law,” said Edelman.
“By contrast, if the office pools take place in one state and have no nexus to interstate commerce, their legal status would be determined entirely by the law of that state, and theoretically may vary depending upon the laws in place in individual states,” Edelman explained.
Fantasy Sports Prosecution Odds
While there have been very few instances of legal action against office pool organizers or participants, Edelman stated, “The odds of legal challenge are incredibly low.”
While legal consequences are rare, documented cases have shown more severe outcomes such as job terminations. In 2009, Fidelity Investments made headlines when they fired four employees for discussing NFL fantasy sports in the workplace.
So why aren’t authorities taking more action against the widespread NFL workplace pools? Edelman explained that it’s primarily due to the strain it would put on local government resources to investigate, charge, and prosecute such claims.
“There are plenty of laws on the books, both in the individual states and passed by Congress, that are not rigorously enforced unless a concern comes to light,” Edelman mentioned.
“In the very rare cases where office pools have led to criminal lawsuits, the original investigation typically began with either a participant themselves coming forward and complaining to authorities, or a reasonably sized payment into one’s account, where the recipient failed to pay tax, and it’s picked up in an IRS audit,” Edelman stated.
Who Is at the Greatest Risk?
According to Edelman, league organizers and commissioners who handle the buy-ins and payouts face the highest legal and employment consequences.
As a practical reality, short of the pool becoming exceedingly large in terms of members, a participant in the pool affirmatively complaining to authorities, or a winner of a big sum not paying taxes and that getting detected in an audit, the risk of legal challenge is low, even though there may be an underlying offense,” he detailed.
Edelman advises dealing in cash to avoid further legal concerns, as transitioning to digital payments can raise issues. He also suggests that commissioners warning participants not to label their entries as “payment for NFL office pool” or similar phrases when using digital transactions.
“While it is very unlikely that any state or the federal government would end up investigating a particular pool for illegal gambling, if that were to happen, the language that you put in your payment on PayPal theoretically would be discoverable. That could be used as a smoking gun to prove that an underlying illegal activity occurred,” Edelman added.