I don't care about March Madness. I don't care if billions of employees are or aren't productive during March Madness. I don't care if human resource experts believe or don't believe it builds worker morale. If people at work want to discuss how teams are doing or set up pools, that's fine, or it's not. If bosses don't like March Madness, just say no. That's what it means to be a boss. Or ignore it. Whatever you do or don't do, good for you. It really doesn't matter.
What matters is that people are paid decently for their whole-hearted efforts at work, that they are respected on the job and that they respect the job, and also that they have safe, clean and comfortable places to work. Anything else is actual madness, and not just in March.