$10 billion expected to be bet on March Madness, most illegally

$10 billion in March Madness bets expected, most illegal

Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

It’s not just casual fans who are gearing up for March Madness. As The Associated Press reports, America’s gambling industry predicts $10 billion will be bet on the upcoming college basketball tournament — most of it illegally.

Illicit gambling doesn’t sit well with the American Gaming Association, an industry group that favors legalizing and regulating sports betting in the U.S. In a survey, the group found that 24 million U.S. adults participated in March Madness bracket pools last year, spending $2.6 billion on entry fees.

With legal sports betting currently limited to just four states — Delaware, Montana, Nevada and Oregon — most of these bets took place illegally, or off-the-books.

Geoff Freeman, president and CEO of the American Gaming Association, said current laws regulating sports betting aren’t doing Americans any favors.

“Our current sports betting laws are so out of touch with reality that we’re turning tens of millions of Americans into criminals for the simple act of enjoying college basketball,” Freeman said. “The failed federal ban on sports betting has created an illegal, unregulated sports betting market that offers zero consumer protections and generates zero revenue for state and tribal governments.”

New Jersey has challenged the federal ban, and the Supreme Court is weeks away from issuing a ruling on the state’s challenge. But with March Madness just days away, let’s take a look at what the current laws mean for you.

What does this mean for you?

So, are you a criminal just because you plan on putting down $20 in your office pool? The answer is, well … complicated.

In a survey, the American Gaming Association found that in 37 U.S. states, it’s illegal to participate in sports betting pools if money is involved. So, yes, you may actually be breaking the law when you put a few bucks on Duke to go all the way.

The good news? Law enforcement has historically not placed a high priority on enforcing those laws, so you and your coworkers (along with millions of other upstanding Americans) may be in the clear.

“Our current sports betting laws are so out of touch with reality that we’re turning tens of millions of Americans into criminals for the simple act of enjoying college basketball.”

Geoff Freeman, president and CEO of the American Gaming Association

Why should you care?

If you’re like most Americans, you’ve probably never entertained the notion that a harmless office pool could constitute criminal activity.

But whether or not you agree with the Professional and Amateur Sports Protection Act (PASPA) of 1992, which generally prohibits states from authorizing sports betting, it’s worth understanding the current landscape of sports betting in America.

That landscape may change significantly in the coming months and years. New Jersey has challenged the constitutionality of PASPA on grounds that gambling regulation should be a right reserved for states and not the federal government.

The U.S. Supreme Court is still weeks away from ruling on that challenge, but it’s conceivable that the floodgates will soon open for sports betting nationwide.

What can you do?

With March Madness just around the corner, you might already have your bracket filled out and your buy-in all set.

Don’t worry — we’re not advocating that you tear that bracket up and demand your money back.

But in the interest of fun and financial responsibility, there are a few things you may want to keep in mind to ensure a good time. The National Center for Responsible Gambling lists four keys to betting responsibly. To paraphrase:

Understand that the odds aren’t in your favor. It doesn’t matter how much you believe in Kentucky this year – the chances of you losing are still high. Accept this now and you’ll probably have a much better time watching the games.
Make your bets in a social setting. This shouldn’t be too difficult if you’re participating in a pool with friends or coworkers. Think of the camaraderie, not the money, as the actual reward.
Set a limit. If you’re organizing or participating in an office pool, consider setting a buy-in limit as low as $5. This way, nobody will risk losing more than they can afford.
Don’t go outside your budget. If your office pool allows for unlimited entries, resist the temptation to submit 15 different brackets. Stick to one and you’ll have just as much fun. And if your bracket gets busted in the first round? Remember – there’s always next year!

About the author: Brian Spychalski is a former Credit Karma freelance contributor now based in San Francisco. He has a background in corporate finance and a deep knowledge of the consumer credit market. When he’s not working, Brian can… Read more.