A year ago, Dan Fronk faced a difficult and potentially costly decision: Indiana or Utah? No, the 34-year-old president of Dancor Inc., a printing company in Columbus, Ohio, wasn't relocating his business or opening a new branch. He was simply trying to pick a winner in his office's NCAA basketball-tournament pool. In selecting the Indiana Hoosiers, who went on to the championship game, Fronk put himself in line to share a $750 prize.
Welcome to March Madness, when offices across the country replace Vegas as the prime venue of gambling. According to a survey by the Society for Human Resource Management (SHRM), 30 percent of companies that responded acknowledge operating some sort of NCAA gambling pool. The true number is likely to be far greater than that even though the practice is in many cases illegal. But as Wharton professor Kenneth Shropshire, coeditor of Basketball Jones: America Above the Rim, says, NCAA betting has become widespread in the workplace for the obvious reason that pools are so easy to organize. Brackets "come ready-printed in the New York Times," he notes.
Betting on the tournament is common, but pools can be disruptive. There's the productivity issue. Filling out a bracket takes time, and workers can be distracted for the duration of the tournament (which runs from March 18 to April 7 this year). For example, at Dancor, which had annual revenue of $4 million, Fronk allows some workers to "take off at noon on Thursday and go to a bar to watch the games."
There are other reasons managers may find fault with office gambling pools. One group of employees may exclude others. Weekly e-mail updates of standings can devolve into trash talking that crosses the line. And the money can be lost, stolen, or skimmed off the top by the pool's organizer. Missing pool money occasionally prompts the police to intervene. In 2001, for example, South Brunswick, N.J., police arrested a middle manager with AT&T for running a $30,000 office football pool -- and allegedly taking a 10% cut.
"For CEOs, I think the real question is whether or not an employer should have a policy prohibiting such pools," says Marc Terry, 34, an attorney with Mirick O'Connell, a Worcester, Mass., firm that represents hundreds of businesses in labor and employment law. "If an employer does have a policy, it should be enforced consistently, with people of all levels throughout the company." But even having a policy can be problematic because it "can put HR in the uncomfortable position of being company policeman," says SHRM's Frank Scanlan.
And, really, who wants to be a killjoy? Entrepreneurs, after all, are as likely to enjoy office pools as their employees. One way to minimize headaches is to legitimize the activity. For instance, Serentec, a pharmaceutical consulting firm in hoops-crazy Raleigh, N.C., has a recreation committee that runs its March Madness pool. "It saves a lot of heartburn," says HR manager Lesle LaBerge.
Serentec, which had 2001 sales of $8.4 million, thinks of its pool as a morale builder for its 70 employees, most of whom work remotely. Staff participation hit 75% last year. Serentec's workers pay nothing to enter, and the company puts up a prize; last year's winner walked away with a $125 Home Depot gift certificate. Since there's no chance of financial loss for the participant, it's not gambling and therefore perfectly legal. "Then you're really talking about a door prize, and the fact that it's connected to a sports event doesn't change the nature of it being a giveaway," explains attorney Terry.
The pool at Dancor, where Dan Fronk wisely picked Indiana to win last year, also has a greater purpose. Fronk uses it to dazzle clients in the competitive business of offset printing, creating brackets bearing his logo that he distributes to customers and prospects, as well as to his 30 workers. Like Serentec, Dancor funds prizes. Last year 80 people submitted entries, including Fronk, who came up empty despite the Hoosiers pick. "Never won, but always come close," he says. Maybe this is his year.
If you're like most entrepreneurs, you're never content to finish in the middle of the pack. So why bother entering an NCAA pool if you aren't going to win? We turned to ESPN's high-energy college-basketball analyst Dick Vitale for tips to help you rack up "W's" in your office pool.
1. BE SKEPTICAL OF BIG NAMES Now more than ever, you shouldn't blindly bet on the traditional powerhouses like Duke, Kentucky, and North Carolina. "There seems to be more balance in college basketball, basically because of players leaving early," says Vitale. "The NBA has really depleted some of the so-called super big-time schools."
2. KEEP AN EYE ON EVEN SEEDS "Twelve seeds have always been very dangerous," says Vitale. "And an eight seed can be a dangerous seed if they get by their first-round opponent." But don't waste your picks on a No. 16; none has ever upset a No. 1 seed in the current format of the NCAA tournament.
3. SEE HOW TEAMS END THE SEASON "Look for teams playing really well in their last 10 games," advises Vitale. Maryland, last year's champion, entered the "big dance" 9-1. The universities of Miami and Southern California, both high seeds, finished the regular season 6-4 and were upset in the first round.
4. TRACK THREE-POINT SHOOTERS "The three-point shot has really changed the complexion of the game; because of it, we have so many more upsets," says Vitale. If a team relies heavily on an outside shooter, monitor his health and hot and cold streaks. If he falters, the team may be ripe for the picking.
5. KINDLY DISREGARD TIPS 1 THROUGH 4 Vitale confesses that picking tournament winners is still just a guessing game. "To tell you how bad I am, my daughter called me up one day and said, 'Dad, you gotta help me with my pool," says Vitale. "I gave her all the picks, and all of the people at her work told her, 'No fair, Terri, you probably called your dad up." So how did the Vitale combo make out? Reports the former coach, "She called me back [after the tournament] and said, 'Dad, I finished worse than everybody!"
Please E-mail your comments to firstname.lastname@example.org.