John Roska: In an NCAA pool? Yep, you're breaking the law
Q: Are NCAA basketball pools that pay off illegal?
A: They're illegal, even if semi-respectable. Just as with speeding, the fact that "everybody does it" isn't a defense if you're prosecuted for gambling.
Illinois law says it's illegal to make "a wager upon the result of any game, contest or any political nomination, appointment or election." That covers bets on NCAA tournaments, the Super Bowl or penny-ante poker. There's no exception for "social" or "friendly" wagers.
Illegal gambling is a Class A misdemeanor, carrying a maximum penalty of one year in jail and a $2,500 fine. Property used for gambling can be seized, and not reporting gambling income is tax evasion.
But illegal gamblers bet that they won't get caught. For losers and small-time winners, that's a pretty safe bet.
Back in 2010, Cook County Sheriff Tom Dart said, "I'd have to have my head examined if I were chasing around office pools." (He's still sheriff.)
Big winners, and people who take bets, run a greater risk of being prosecuted. An occasional office pool gets busted. Gambling winnings must also be reported as income when you file your taxes. If you itemize, gambling losses can be deducted from winnings to reduce total income.
Of course, not all gambling is illegal. The Legislature says that certain kinds of bets "benefit the people of Illinois by assisting economic development and promoting Illinois tourism." In particular, the state lottery (since 1974), riverboat casinos (since 1994), horse racing, and now local video gambling are all legal if those involved are properly licensed by the state, follow the rules and pay their taxes.
The Illinois Loss Recovery Act gives losers a way to get a refund. If they lose more than $50 from illegal betting, they can sue the winner for their money back. In 1994, for example, someone successfully sued their local tavern for what they lost playing "Cherry Master," a (then-illegal) video slot machine.
The law even permits bounty hunting. If a loser doesn't sue within six months of their bad bet, "any person may initiate a civil action against the winner." If a bounty hunter sues and proves a loss from illegal gambling, they get a judgment for three times the amount of that loss. Legal gambling losses aren't recoverable, though, so you can't sue the Casino Queen when you come out behind.
Recent suits under the Loss Recovery Act against online poker sites and fantasy leagues that paid off have failed. A house "rake" that's simply a fee or a percentage of cash flow doesn't make those sites a "winner" that can be sued under that law.
The expansion of legal gambling to the local saloon in 2013 may have crowded out the illegal pools on sports events that once were popular there. Collectors of legal gambling taxes frown on untaxed illegal gambling, creating a risk most bars don't seem to want to mess with.
In Urbana in 2013, the 30 percent tax on video gaming net revenue made about $450,000 for the state and $90,000 for the city. February 2014 tax revenue is up 65 percent from a year ago.
John Roska is a lawyer with Land of Lincoln Legal Assistance Foundation. You can send your questions to The Law Q&A, 302 N. First St., Champaign, IL 61820. Questions may be edited for space.