Question: March Madness is upon us, and a lot of people are participating in office pools. If you have a situation where people in an office are putting in $10 for, let’s say, a football or basketball pool and the person running the pool gets no financial take for running the contest or a percentage of the pot, is that type of pool permissible under state law?

Answer: Gambling is illegal in Hawaii. Social gambling is an affirmative defense — which means that the defendant bears the burden of proof — that is available for the defendant to assert in any prosecution.

For office pools, the defendant may find it difficult to prove that the gambling was social gambling because one of the conditions states, "It is not conducted or played in or at a hotel, motel, bar, nightclub, cocktail lounge, restaurant, massage parlor, billiard parlor, or any business establishment of any kind, public parks, public buildings, public beaches, school grounds, churches or any other public area."

Q: Is there a way to conduct a legal football or basketball betting pool in Hawaii?

A: Not if the pool includes the elements of gambling as defined in the Hawaii Revised Statutes. According to Hawaii law, "a person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome." In other words, if a participant pays an entry fee (staking or risking something of value) to predict outcomes of sporting contests (future contingent events not under his control) and can possibly win cash or a prize (something of value), it would be considered gambling.

Office pools generally do not meet the conditions of "social gambling" because they take place in a business establishment.

Q: What type of gambling is legal here?

A: Gambling is illegal in Hawaii. However, "social gambling" may be permissible if all of the following conditions are present:

1. Players compete on equal terms with each other.

2. No player receives, or becomes entitled to receive, anything of value or any profit, directly or indirectly, other than the player’s personal gambling winnings.

3. No other person, corporation, unincorporated association or entity receives or becomes entitled to receive anything of value or any profit, directly or indirectly, from any source, including but not limited to permitting the use of premises, supplying refreshments, food, drinks, service, lodging or entertainment.

4. The activity is not conducted or played in or at a hotel, motel, bar, nightclub, cocktail lounge, restaurant, massage parlor, billiard parlor or any business establishment of any kind, public parks, public buildings, public beaches, school grounds, churches or any other public area.

5. None of the players is below the age of majority.

6. The gambling activity is not bookmaking.

Q: So are people who participate in March Madness pools, or fantasy football, for that matter, doing anything illegal if there is an entry fee to participate and the winner receives money, but the person running the pool receives no payment? And, as a follow-up, what if the person conducts this contest from his house rather than the office?

A: Those events could quite possibly constitute gambling. The entry fee would constitute "staking or risking something of value," the March Madness pool or fantasy football games are "contests of chance" and the cash winnings would constitute "something of value in the event of a certain outcome."

If the person running the pool receives no payment and the contest is conducted from his house, he may be able to present the affirmative defense of "social gambling," provided that all pool activity occurs at his home and the other four elements are also present.

Q: What is the jail term or fine for someone convicted of gambling under state law?

A: First-degree gambling promotion is a Class C felony in Hawaii punishable by up to five years in prison and a $10,000 fine. Second-degree gambling and gambling promotion are misdemeanors punishable by up to one year in prison and a $2,000 fine.  

Q: Is a Hawaii resident allowed to participate in a lottery from another state?

A: Because lotteries are illegal in Hawaii, a Hawaii resident who purchases a lottery ticket from another state or country may be violating state law.

Interviewed by Dave Segal