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Chris March 10, 2013

It is the most wonderful time of year. College basketball is in its postseason. A week from today the 68-team NCAA men’s tournament bracket will be revealed and within minutes many of us will be filling out our own brackets to play in pools. Whether they be among friends, co-workers or part of Internet contests, most of these brackets will be entered into pools with the goal to win a prize. Most commonly this works by paying a sum of money per entry (filled bracket) to enter a pool. Whoever scores the most points with his or her bracket wins the prize, which is most often the money in the pool or a prize purchased by the money in the pool.

Since tournament pools are ubiquitous, some of you may be wondering if they can violate gambling laws. Some of you might actually care. The answer is a classic legal axiom: it depends. More than likely your pool will be well within the bounds of the law. There are however some things that may draw some whistles.

To start, let’s look at Connecticut’s relevant gambling statutes. Sec. 53-278a of the General Statutes includes the following definitions:

(1) “Gain” means the direct realization of winnings; “profit” means any other realized or unrealized benefit, direct or indirect, including without limitation benefits from proprietorship, management or unequal advantage in a series of transactions;

(2) “Gambling” means risking any money, credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance or the operation of a gambling device, including the playing of a casino gambling game such as blackjack, poker, craps, roulette or a slot machine, but does not include: Legal contests of skill, speed, strength or endurance in which awards are made only to entrants or the owners of entries; legal business transactions which are valid under the law of contracts; activity legal under the provisions of sections 7-169 to 7-186, inclusive; any lottery or contest conducted by or under the authority of any state of the United States, Commonwealth of Puerto Rico or any possession or territory of the United States; and other acts or transactions expressly authorized by law on or after October 1, 1973;

(3) “Professional gambling” means accepting or offering to accept, for profit, money, credits, deposits or other things of value risked in gambling, or any claim thereon or interest therein. Without limiting the generality of this definition, the following shall be included: Pool-selling and bookmaking; maintaining slot machines, one-ball machines or variants thereof, pinball machines, which award anything other than an immediate and unrecorded right of replay, roulette wheels, dice tables, or money or merchandise pushcards, punchboards, jars or spindles, in any place accessible to the public; and except as provided in sections 7-169 to 7-186, inclusive, conducting lotteries, gift enterprises, disposal or sale of property by lottery or hazard or policy or numbers games, or selling chances therein; and the following shall be presumed to be included: Conducting any banking game played with cards, dice or counters, or accepting any fixed share of the stakes therein;

(5) “Gambling record” means any record, receipt, ticket, certificate, token, slip or notation given, made, used or intended to be used in connection with professional gambling;

(6) “Gambling information” means a communication with respect to any wager made in the course of, and any information intended to be used for, professional gambling. Information as to wagers, betting odds or changes in betting odds shall be presumed to be intended for use in professional gambling

Pool-selling and book-making immediately catch your eye. Book-making, also known as booking, is the accepting and paying of bets, usually related to sports. Pool-selling isn’t as obvious but looks important. Defined in State v. Fico, 147 Conn. 426 (1960), pool-selling “consists of the receiving from several persons of wagers on the same event, the total sum of which is to be given the winners, subject ordinarily to a deduction of a commission by the seller of the pool.”

It looks here that a tournament bracket pool may constitute pool-selling. That questions then are: is this gambling and if so, is it legal?

The next statute to look at is Sec. 53-278b, which provides

(a) Any person who engages in gambling, or solicits or induces another to engage in gambling, or is present when another person or persons are engaged in gambling, shall be guilty of a class B misdemeanor; provided natural persons shall be exempt from prosecution and punishment under this subsection for any game, wager or transaction which is incidental to a bona fide social relationship, is participated in by natural persons only and in which no person is participating, directly or indirectly, in professional gambling.

(b) Any person who engages in professional gambling shall be guilty of a class A misdemeanor.

The key is whether the pool is professional in nature. Professional gambling requires a profit motive. A bracket pool among friends or office colleagues in which the pot goes to the winner and the organizer doesn’t take a rake lacks the profit motive. A pool that has a cash prize but not an entry fee would also lack the profit motive. A pool in which the organizer takes a cut of the buy-in would most likely cross the line into professional gambling.

In addition to the absence of a profit motive, most tournament pools fall into the “social gambling exception” delineated in Sec. 53-278b(a). Although there is no definition of “social gambling” in the statute or in case law, many other states have this exception and have defined it. In Colorado for example, “‘bona fide social relationship’ means that the parties must have an established social relationship based upon some other common interest other than the gambling activity.”

Some people like to go beyond the brackets and wager on individual games, often seeing people who regularly engage in Sec. 53-278a(3). Such sports* betting is illegal in Connecticut and almost every other state. A great deal of sports wagering is now conducted over the Internet with offshore sports books. Interestingly, it is not a federal crime to place bets. The Wire Act and other applicable federal laws prohibit booking. Still, betting on sports via the Internet is still prohibited by Connecticut law. It can still violate Sec. 53-278b and has not been specifically authorized by law.

Sports wagering does not refer to pari-mutel betting, which is legal.

Happy brackets, friends.