U.S. businesses are poised to lose as much as $3.8 billion in worker productivity during the next three weeks, as employees enter office pools, track their picks and otherwise watch and gab about games that culminate with the NCAA basketball championship April 3 in Indianapolis.

The productivity drain tips off Monday, once Greg Gumbel has revealed first-round pairings – for Kansas University and 64 other teams – during tonight’s Tournament Selection Show on CBS.

“College basketball fans across the country will begin organizing office pools and researching teams for their brackets,” said John Challenger, chief executive officer of Challenger, Gray & Christmas, a global outplacement consultant who has been tracking the effects of the tournament on productivity for several years. “Even people who do not follow college basketball for the entire season can easily get wrapped up in the excitement of March Madness and trying to pick the winners.”

Such interest has been an annual rite at Pearson Government Solutions. When the company’s call center operation came to town with a handful of employees in 1994, Kansas University already had been to the tournament in each of the past five years.

Today, as KU is selected for its 17th consecutive tournament, Pearson stands as the city’s largest private-sector employer. Its 1,700 workers field millions of calls and Internet inquiries regarding Medicare, student loans, immigration issues and other topics from across the country.

Workers are bound to squeeze in some tournament time as conditions allow, said Mark Andrews, Pearson’s human resources and site manager.

“We have a lot of people here, and ‘Rock Chalk Jayhawk’ is the No. 1 slogan,” Andrews said. “All that enthusiasm, and loving the team and following them takes place. We don’t sanction pools of any kind, but who knows how many are taking place that we don’t know about?

“It certainly is a big topic of conversation in the cafeteria, and with people going to their cars. We all follow those ‘Hawks pretty closely.”

That’s not unusual. The Society for Human Resource Management once surveyed its membership and found that 30 percent of organizations specifically prohibit betting pools, 14 percent allow them and 57 percent don’t worry about it either way. The survey also found that 30 percent of organizations reported that their employees had been involved in NCAA office pools.

Challenger, the outplacement consultant, crunched a series of numbers to come up with the estimated businesses costs of such activities:

¢ The average American worker earns $18 an hour, according to the Bureau of Labor Statistics. At that rate, workers earn $4.05 every 13.5 minutes, the average amount of time fans spent per session during last year’s tournament at ESPN.com’s basketball Web site.

¢ A Gallup poll found that 41 percent of Americans consider themselves fans of college basketball. Applying that to the field of 142.8 million workers in the U.S. leaves 58.548 million employees susceptible to catching March Madness, enough to cost companies $237 million for those 13.5 minutes per day.

And that’s being conservative, Challenger figures. Unlike last year, CBS is making many tournament games free to watch on the Internet at www.cstv.com, an attractive option for workers with access to high-speed lines at work and a game tipping off just after lunch.

“The reality is that they will likely spend much more time online during the work day, keeping track of games and managing their brackets,” he said. “If we estimate conservatively that fans will spend 13.5 minutes online each day, beginning March 13 and continuing through the championship game on Monday, April, 3, that’s 16 business days. The total hit to employers’ bottom lines could amount to $3.8 billion.

“The cost may end up being much higher.”

Then there’s the matter of the law. An office pool that requires money to enter – even at $1 per bracket – is illegal, said Charles Branson, Douglas County district attorney.

Outside of state-sponsored gambling, such as the Kansas Lottery, an activity is considered illegal gambling if it has three components: consideration (an entry fee), chance (one professor says there are 9.22 quintillion possible tournament outcomes) and reward (payout from the pool’s entry fees).

“If you’ve got those three things, you’re certainly in danger,” Branson said.

That’s the letter of the law, anyway. A conviction for gambling carries a penalty of up to six months in jail and a $1,000 fine.

“Yes, it’s illegal,” Branson said. “And, yes, if we have a report, we’ll have to investigate and possibly file charges. And no, we’re not actively looking for these things.

“It’s a matter of resources. You can’t expect law enforcement to go out and police these things, unless somebody is complaining about it. And to my knowledge, I have not seen any of these reports come into my office.”