Who Has the Golden Ticket? Office Pools, Lotteries, & Gambling in Wisconsin
Fantasy football tournaments and March Madness brackets are common in many Wisconsin workplaces. Typically, employees pay a small fee to participate, and the winner receives the aggregate of the entry fees. Often, third-party apps like Yahoo! Sports or CBS Sports provide the platforms used to run such competitions, making office pools virtually effortless to organize and participate in. But do office pools constitute illegal gambling?
What is Gambling?
Under Wisconsin statutes, any individual who makes a bet is guilty of a Class B misdemeanor. A “bet” is a bargain in which the parties agree that someone will win or lose something of value, when the bargain is dependent on chance.
Individuals who run lotteries are also guilty of a Class B misdemeanor. Lotteries are defined as an enterprise in which participants pay some form of consideration (i.e., money) in exchange for the opportunity to win a prize, which is dependent on chance.
In addition to state statutes prohibiting gambling, many municipalities around the state have enacted or-dinances that adopt the Wisconsin statute prohibiting gambling. Violations of those ordinances subject individuals to a fine dependent on the fee schedule in each municipality.
Individuals who make bets or conduct a lottery can, at most, be found guilty of a Class B misdemeanor under Wisconsin statutes. Class B misdemeanors are punishable by a fine not exceeding $1,000, jail time not exceeding 90 days, or both.
So, the $64,000 question is, how often are people charged with illegal gambling? A quick search of Wisconsin Circuit Court Access using the gambling case codes reveals that not a single person was charged with a gambling-related crime from January 1 through November 30, 2018. It’s unclear how many municipal citations, if any, were issued during that time.
What Types of Activities Fall Within ‘Gambling’?
Any office pool in which an individual pays an entry fee of some value that allows him the opportunity to win some valuable prize dependent on chance rather than skill would be prohibited under Wisconsin law. The key element of “gambling” is the emphasis on chance.
The definitions of both “bet” and “lotteries” require that the results be “dependent on chance even though accompanied by some skill.” Wisconsin courts have interpreted that phrase to mean “chance, rather than award.” Therefore, under Wisconsin law, only “games of chance” are prohibited. What does that mean in a practical sense? Let’s look at an example.
Employees at Company A each pay $10 and receive a number between 1 and 100. At the end of the day, one employee draws a number from a hat. The employee who is closest to the number that is picked, without going over, wins the pool of money. The employees exerted no skill whatsoever when they participated in the office pool. Rather, they paid money for the opportunity to win a prize, and winning was entirely dependent on chance. There was no strategy in picking the numbers; it was a random act of chance. This is a classic example of a lottery prohibited under Wisconsin law.
What About Games of ‘Skill’?
Now let’s look at something that might be considered a game of skill. Employees at Company B pay $10 to participate in a fantasy football league. Each employee selects different players—running backs, quarterbacks, kickers—from various football teams in the NFL to form their fantasy team. Each week, an employee selects her “starting lineup” from her fantasy team and plays a game against another employee in the league. The football players on each employee’s team win points based on their actual performance in that week’s football game.
For example, if Employee 1’s starting quarterback throws a touchdown in his real-life game, he wins a certain number of points for Employee 1’s fantasy team in the matchup against Employee 2. At the end of the week, if Employee 1’s fantasy team scores more points than Employee 2’s team, Employee 1 wins that week. At the end of the season, the employee whose team has the most wins receives the aggregate of the entry fees.
Although some people might argue that employees at Company B are engaged in a game of chance—selecting players at random, leaving their ability to win at the whims of the NFL gods—there’s an argument that they are engaged in a game of skill. Selecting which running back to play against a strong defensive line or knowing which receiver is favored by a hot quarterback requires an element of skill. Arguably, if an employee is unlucky enough to be prosecuted for participating in the fantasy league, she has an argument that her chances of winning the office pool are dependent on skill rather than chance, and therefore she isn’t betting.
What About Weight-Loss Competitions?
Here’s a final example: Employees at Company C each pay $10 to enter a weight-loss pool. The money is aggregated, and at the end of a certain period—let’s say 10 weeks—whoever loses the most weight (total pounds or percentage of body weight) wins the combined entry fees.
Now, I know there’s no way to luck into losing 20 pounds, so I would argue that a weight-loss contest isn’t a game of chance at all, but rather is entirely dependent on skill. Employees who participate in the contest are required to diet, exercise, and exert self-control to lose the most weight and win the competition.
Games of chance are prohibited by Wisconsin law, but prosecuting such crimes doesn’t appear to be a high priority for municipal or state authorities. Many office pools may fall just outside the statutory definition of gambling as long as employees can make an argument that the contest is dependent on skill rather than luck. While pools may be a source of comaraderie and good cheer around the office, employees who participate in them should be wary of Wisconsin law and—perhaps more important—company policies.
This article, slightly modified to note recent updates, was featured in the January 2019 issue of the Wisconsin Employment Law Letter, which is co-edited by Axley Brynelson Attorneys Saul Glazer and Michael Modl and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.