March Madness is almost here (think office pools), and fantasy baseball drafts (think league entry fees) are not far behind.

In a recession, can you afford to be the same sports fan you were? Fantasy sports are a $1.5 billion dollar industry. Sports betting, which includes office pools, is also big money.

Though more than 50% of all games are played for low or no stakes, more sophisticated fantasy leagues with entry fees of $1,000 or more, and awards of up to $300,000, can generate as much as $2 million in revenue, according to Jeff Thomas, president of the Fantasy Sports Trade Association.

But in a year when people are looking to make budget cuts, is fantasy sports or sports betting on your list?

Probably not.

Dustin Ashby, a partner at Missouri-based GridIron Fantasy Sports, which owns and operates the World Championship of Fantasy Sports, says that while he expects fewer people to travel to Las Vegas to take part in the company’s September 2009 live draft event, online participation has been strong enough for him to raise entry fees. Kevin Bonnet, president of Fantasy Day Sports of Costa Mesa, Calif., is also bullish on fantasy sports. 

“I’m sure that we’re being affected by the recession, but we’re still growing at a rate of three times to five times our size year over year,” says Bonnet. “Maybe we’d be at six times that if it weren’t for the economy.”

But not everyone agrees.

“Last year, we had 10 people in our fantasy baseball league, and only four are willing to do it this year,” says Scott Henkus, a baseball and football fantasy player from Westfield, N.J. “These days, feeding your kids is more important than who is on second base this week.”

How Can You Wager in the Recession?
Are you interested in filling in a March Madness bracket or getting ready to draft a fantasy baseball team? Even if you have less to spend, you can still keep your hobby going.

Here are some tips for staying in the game without your better half throwing a technical.

Set a budget. We are not just talking about money (although you should set a money limit each season for sure), but also the time you spend checking stats and making deals. If you are spending more time on Yahoo’s (Stock Quote: YHOO) fantasy page than you are helping around the house on Sunday, that is not a good look. Neither is spending the rent money. “It’s easier for someone to absorb a $1 to $5 bet than a $1,000 bet if they’ve lost their job,” says Bonnet.

Sports fan, know thyself. Not all leagues are created equal and not all betters and fantasy managers are at the same level in terms of commitment and acumen. Get to know your fellow fantasy fans. You don't want to be the one asking why pitchers in the American League do not have batting averages. (It also increases your chances of winning if you are competing against similar level fans.)

Keep it legal. Betting on sports books is still illegal in every state except Nevada, but section 5363 of the Unlawful Internet Gambling Enforcement Act of 2006 does permit individuals to make bets or wagers as long as they don’t use a check or credit card to do it. You can put the big bucks on the line, but you should be paying in cash. (Also, respect the rules of your league. Cheating is never cool. Just ask A-Rod.)

Pay your taxes. If you are fan enough (or lucky enough) to win your March Madness pool, keep in mind those winnings are not tax-exempt. You’ll have to file a 1099 form for any income over $600. Some experts say it's advisable to report any winnings, no matter how small. 

However, if you itemize, you can deduct expenses incurred from gambling. (So if you enter an online fantasy sports league, then you could deduct the entry fee from your winnings.)

Enjoy your windfall. Being a fan is all about fun. If you do win some cash, it's OK to make a small splurge to reward yourself. (Though saving the money can mean a bigger splurge later.)

“Sports is the biggest part of these people’s lives,” says Ken Slight, who has seen the number of users on his site,, almost double this year. “Maybe it is a luxury, but hardcore fans are always going to come back.”

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at