Scenario: College basketball teams are playing in their respective league championship tournaments and soon the “NCAA March Madness” brackets will be announced. Many sports fans are accustomed to placing a friendly wager on a favorite team. Your office colleagues decide to set up a little game. It does not harm anyone, and participation is totally voluntary. Is it permissible?

Answer: While betting a few dollars on sports is often viewed as a harmless social pastime, if done at work it violates the Federal regulations that prohibit gambling for money or property in the Federal workplace. Predicting teams that will advance in a college basketball bracket purely for fun or picking winners to claim bragging rights in the office are not the types of conduct that generally raise concerns.

Federal rules on gambling prohibit employees from gambling while on duty, or while on government-owned or leased property, unless necessitated by their official duties. These restrictions apply not only to Federal employees, but also to members of the public at large, contractors, vendors, and exhibitors when on GSA-controlled property. The rules are found at 5 CFR section 735.201 and 41 CFR section 102-74.395. (CFR = Code of Federal Regulations)

How Does Illegal Gambling Work In

To identify illegal gambling you must understand and analyze state and federal gambling laws. Within these laws there will be absolute prohibitions, exceptions to certain rules, and certain allowances as well. While the ultimate legal/illegal line is drawn by state and federal law, it also helps if you can identify common illegal gambling schemes.
Gambling is subject to fraud. Legalized gambling, specifically Indian gaming, is the fastest growing.

Violations of the regulations may be cause for disciplinary action by the employee’s agency, which may be in addition to any penalty prescribed by law.

In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act, which made it illegal for wagering businesses to knowingly accept payment in connection with unlawful Internet gambling (though it does not itself make Internet gambling illegal). 109-347, Title VIII (Oct. 13, 2006) (codified at 31 U.S.C. §§ 5301, 5361–67. The Unlawful Internet Gambling Enforcement Act of 2006 makes it illegal to operate an online gambling website anywhere in the US. But, it doesn’t make it illegal for individuals to place wagers. Our strategy for tackling illegal online gambling—as a key enforcement agency—is to start with the companies providing the services in the first place. “We’re going after the people making the money—the owners of these virtual casinos, gaming rooms, and off-track betting parlors,” Bryant says.

The only authorized exception is for activities and games that take place during the time period of the annual Combined Federal Campaign (CFC), in accordance with Executive Order 12353. However, CFC raffles are not synonymous with gambling when conducted in accordance with part 950 of title 5 of the Code of Federal Regulations.

Legally defined, gambling requires 3 elements:

A game of chance,
Consideration for the opportunity to play the game, and
An offering of a prize.

A game of chance includes, but is not limited to, a raffle, lottery, sports pool, game of cards, the selling or purchasing of a numbers slip or ticket, or any game for money or property. Consideration includes a participation fee, a wager of money, and something of value in return for the possibility of winning a reward or prize. A prize would include a monetary award, or a tangible or intangible item. Examples include meals, drinks, administrative leave, gift certificates, tickets to events, or cash.

In addition to the OPM and GSA regulations, the Department of Health and Human Services (HHS), Office of the Chief Information Officer (OCIO), Policy for Personal Use of Information Technology Resources, HHS-OCIO-2006-0001, section 5.4.3 (2/17/06), prohibits the use of government equipment, such as computers and e-mail, for illegal gambling activities. This includes related e-mails sent from a personal account if done using a government computer.

Violations of this policy may be cause for loss of use or restricted use of government equipment, disciplinary action, or financial liability.

Note that the Randolph-Sheppard Act which covers the existence of the convenience stores on campus permits them to sell state lottery tickets.

The Supreme Court on May 14 struck down a 25-year federal ban on sports betting outside of Nevada.

The big question on many minds – particular state officials and companies like MGM Resorts and DraftKings looking to cash in – is how much money is at stake. Many of the articleson the decision cite the same eye-popping figure: Americans wager an estimated US$150 billion in illegal sports bets every year.

As a macro economist, I am used to dealing with big numbers. Still, $150 billion struck me as much too high. To put it in perspective, that’s 14 times more than Americans spend going to the movies, twice as much as they put into grooming and feeding their pets and about the same as they pay for fruits, vegetables and dairy products.

The figure comes from the American Gaming Association, which represents the U.S. casino industry and works to reduce restrictions on gambling. It says it based this number on a 1999 government estimate of about $80 billion in illegal sports betting. The group, which describes this as “the most conservative estimate,” then adjusted it to 2017 dollars using GDP growth.

I’m not the first to find fault with these figures. A 2014 article in Slate questioned an even higher estimate, $380 billion, drawn from the same report. An examination of the underlying study showed that such estimates were not based on serious research.

While the figure has no real basis, it does have real impact. Numerous states need more tax revenue. If the potential dollars are big enough, then many states will rush to allow sports betting – as almost 20 are already doing, including New Jersey, which was behind the lawsuit that resulted in the high court ruling.

What States Is Gambling Illegal

Real-world examples

As I know from my work in economics, there are better ways to make estimates than pulling numbers out of thin air.

The first thing you do in such cases is look for a real-world example. In this case, data from the U.K., which has allowed sports gambling for decades, with thousands of betting parlors offering odds on everything from Premier League matches to when royal babies are born.

Why Should Gambling Be Illegal

The U.K.’s Gambling Commission tracks betting statistics and issues an annual report. The one released in January shows that Brits placed about 10 billion pounds in bets in the latest fiscal year.

To get a comparable estimate for the U.S., that figure needs to be adjusted by population and currency. The U.K. has only about 66 million people, compared with 327 million in the U.S. And the pound was worth $1.36 on May 14.

Illegal Gambling Raid

After making both adjustments, this suggests that if people in the U.S. are allowed to make bets at the same rate as in the U.K., the size of the industry would be about $67 billion a year. While enormous, that’s a far cry from $150 billion.

Will legal sports gambling be big business? Yes, but not as big as its proponents want you to believe.