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Should Employers Hedge Their Bets in Light of the Supreme Court’s Sports Betting Ruling?

The dog days of summer are winding down, which means football season is right around the corner. But this football season is different. For the first in more than two decades, Nevada no longer has a monopoly on legal sports betting.

Thanks to a 6-3 ruling by the Supreme Court of the United States in Murphy v. National Collegiate Athletic Association, the federal prohibition of sports betting is a thing of the past. In May 2018, the Supreme Court held that the Professional and Amateur Sports Protection Act (PASPA), 28 U.S.C. §§ 3701-3704 is unconstitutional because it violated the anti-commandeering doctrine under the Tenth Amendment.

Many wrongly believe that this ruling makes all sports betting legal in the United States. While the Supreme Court ruled that the PAPSA is unconstitutional, it did not legalize sports betting. Rather, the Court struck down the federal prohibition, which opened the way for individual states to determine whether to legalize sports betting. Thus far, only New Jersey, Delaware, and Mississippi have joined Nevada in legalizing sports betting. By the end of 2018, West Virginia, New York, Pennsylvania, Connecticut, and Rhode Island, will also likely have sports books up and running.

So unless an employee is located in those states, sports betting is still very much illegal and employers that have operations outside of those states will want to consider implementing plans to make sure such unlawful conduct is not occurring at the workplace, because, more than likely, it already is.

According to the American Gaming Association, people in the United States illegally wager at least $150 billion annually—which is more than the annual revenue of 491 of the Fortune 500 companies—on sporting events. This figure includes bets placed with neighborhood bookies, on offshore websites, and with friends or coworkers. The amount of time employees spend on sports betting, including the long-popular fantasy sports, can certainly create a drain on productivity.

What Can an Employer Do?

First, regardless of whether an employer is located in a state with legal sports betting or not, it may be worthwhile to revisit its Internet and mobile device use policies. Using company resources to place bets or manage fantasy teams could create performance issues on computer networks, make company data susceptible to security breaches, and distract from an employee’s assigned tasks. Additionally, even in states that have legalized sports betting, the use of computers and mobile devices to place bets could still potentially violate the Wire Act and create potential liability for employers that know their employees are using company property to place bets. Employers should consider reminding employees of their Internet use policies and any policy on the appropriate use of company-issued devices.

Second, employers should consider ensuring that its supervisors and human resources staff are properly trained to spot signs of addiction. Although developing a gambling addiction is likely no more prevalent now than it was last year, employees in states with legal sports betting are going to be inundated with advertisements aimed at getting them to start placing wagers. Gambling addiction is not covered by the Americans with Disabilities Act, but it should still be handled with sensitivity.

Third, many employees like to bet with each other or participate in fantasy sports leagues together. Building this camaraderie can have many positive impacts on the workplace. But beware, because harassment, disparate treatment, or discrimination can pop up in the most unexpected places. What if a supervisor lashes out at an employee after losing a bet or not getting a specific player in the fantasy draft?  Or what about the older employee who feels that he or she has to pick up the slack of younger workers who are clustered around the break room during a game. Whatever the situation, a company can be prepared to deal with employee interactions where money is at stake and tempers can run high.

Lastly, employers can be prepared for reduced productivity. It is inevitable. Fall brings the start of football, hockey, and basketball seasons along with baseball playoffs. Fan loyalty runs deep, particularly with money on the line, and employees will no doubt check scores and statistics—or even live stream games—while at work. Employers should consider planning ahead for these contingencies by creating firm policies, setting realistic expectations, and enforcing violations uniformly.

© 2018, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

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About this Author

Steven Silver, Ogletree, labor and employment lawyer
Associate

Steven Silver is an associate in the Portland, Maine office of Ogletree Deakins. Steve focuses his practice on ERISA and long-term disability matters as well as sports law. Steve joins Ogletree Deakins from the Portland office of a regional multi-service firm where he litigated numerous ERISA matters and advised clients on various sports law issues including trademarks for a hockey stick manufacturer, compliance for a skins gaming website, and contract negotiation for a sports league management software startup. Prior to moving to Maine, Steve practiced in Philadelphia where he defended...

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