The National Collegiate Athletic Association basketball tournament--a.k.a. “March Madness”--kicks off this week, and millions will likely participate now that Warren Buffett has offered $1 billion to anyone who completes their bracket flawlessly.

But while $1 billion sounds tempting, chances are you'll become the next office champion and perhaps start a pool yourself. But wait, isn’t that gambling?

Don’t worry, office pools for bragging rights only are perfectly legal. It’s when you start playing for money that the line starts to blur. To keep things in check, make sure your office pool follows company policy and remains on the right side of the law.

Check if your company prohibits office pools

All companies are different, as are the policies that govern them, so make sure you check the most current version of your employee handbook to ensure office pools are allowed. When in doubt, ask your manager.

Ask if “social gambling” is allowed

More than half of the states have an exception for “social gambling,” or playing for money in a social context. For that context to be considered "social," however, no one involved can earn anything; they can only play the game. Games with that require any form of payment may put your pool in jeopardy.

State laws are not uniform, so you need to do some research to see what applies to you. For instance, California allows contests of skill where money is legally involved so long as you follow the state’s rules for operation. And in Iowa, you have to be socially acquainted with the person you are gambling with and no participant can win or lose more than $50 in a day.

If you don’t feel like browsing the laws of your state, it's best to leave money out of it.

Here are some other guidelines to follow if you still very much want an office pool: 

  • Do not allow the administrator to take a cut. All money collected must be paid out according to the rules. 
  • Make sure everyone is of legal age--over 21 is the safest bet. 
  • Everyone’s chances of winning or losing must be the same and based only on skill. If it isn’t fair, it probably isn’t legal.
  • Limit office pools to co-workers only.
  • Don't put it online. Anything placed on the Internet, even for a short period of time, can be classified as online betting. Professionals know this, which is why all companies that organize online pools tell you they can’t be used for gambling.
  • Have winners report gambling winnings on their taxes.
  • Remember, the more you gamble, the more likely you are to draw unwanted attention. Try to keep the number of pools you organize each year to a minimum.

A little research, fairness, and moderation will be your best allies. Don’t get greedy, as too much money, too many participants, and too many pools will increase your risk of legal trouble.