Legal Eagle - Game of Zones: March Madness and Sports Betting

Every March, around 60 to 100 million Americans fill out tournament brackets. This turns the NCAA’s basketball tournament into a huge national guessing game. Whether you’re in a corner office, chatting with friends, or just joining in for fun, March Madness draws in all kinds of people. This year, U.S. sportsbooks are expected to handle about $4 billion in bets. This shows just how much betting has become part of the season. Before you put money into an office pool or use a betting app, it’s important to know what’s actually legal.

The legal landscape for sports betting in the United States changed dramatically in 2018, when the U.S. Supreme Court ruled in Murphy v. NCAA. At the heart of that case was a 1992 federal law called the Professional and Amateur Sports Protection Act, or PASPA, which had effectively banned states from authorizing sports gambling. In a 6-3 opinion authored by Justice Alito, the Court struck down PASPA, holding that it violated the Constitution's "anticommandeering" principle, a legal concept that, in plain terms, means Congress cannot order state legislatures to keep particular laws on the books or prevent them from passing new ones. The ruling did not legalize sports betting nationwide. Instead, it removed the federal barrier and handed each state the power to decide for itself whether to allow, regulate, or prohibit sports wagering.

Since then, sports betting has become legal in more than 30 states, and Washington, D.C. States like New York, New Jersey, and Illinois have strong online and mobile betting markets. However, the rules aren’t the same everywhere. Some states limit bets on local college teams or ban some types of bets on college athletes. For example, New York doesn’t allow betting on games with in-state college teams. On the other hand, states like California and Texas still haven’t legalized sports betting.

Because the rules vary so much, it’s important to know the difference between betting with a legal, state-licensed sportsbook and using an illegal offshore site. Licensed sportsbooks follow state rules, offer consumer protections, and have responsible gambling policies. Offshore sites aren’t regulated in the U.S. They don’t offer much help if you have a problem or don’t get paid. Experts and regulators strongly recommend avoiding these offshore sites.

There’s also the classic office bracket pool. In these, coworkers put in $10 or $20 and compete for bragging rights and a small prize. These pools are very popular. However, their legal status isn’t always clear. In many states, paid bracket pools can count as gambling. This is because there’s an entry fee, a chance element, and a prize. Some states make exceptions for social gambling among friends if no one is making a profit from running the pool. Others don’t. While it’s rare for small office pools to face legal trouble, the risk goes up if the pool is large or the prize money is high.

In short, before you make any bets this March, take some time to learn the rules.

This column is provided for general informational purposes only and does not constitute legal advice. Reading this column does not create an attorney–client relationship. Laws vary by jurisdiction and are subject to change. You should consult a qualified attorney for advice regarding your specific situation. 

If you have any questions, Lippes Mathias LLP attorney Mina Mirzaie-Frodey may be contacted regarding matters related to this topic and more at mmirzaie@lippes.com