As Tuesday’s Mega Millions lottery drawing nears — with an estimated $1.6 billion jackpot — many hopeful winners are pooling their resources with office buddies or friends to purchase tickets with the understanding that the money would be shared if they win.
At first, joining an office lottery pool may seem like fun. With the odds of winning so slim — about 1 in 3 million, according to the Mega Millions website — why buy one ticket when a group of co-workers can buy 20?
That, however, could lead to complications down the road. That’s why experts say if you’re going to join a pool, put the agreement in writing.
“There’s a few things that you can do to avoid disputes,” said attorney Samuel E. Jones, senior vice president at Shuttleworth and Ingersoll law firm. “Participants in the pool can enter into a written contract with each other, each agreeing to contribute a certain amount to the pool. The contract should define who is a member of the pool, the agreed amount that each person will contribute and an agreement as to how the winnings will be divided.”
The downside to that, Jones said, is that if someone new comes along and wants to join the pool, it may be cumbersome to rework the contract.
Another option, he said, it to create a business — an entity that exists to purchase the tickets.
“In creating that business, they would have to create operational agreements that would specify the purpose of the organization is to purchase lottery tickets and if it wins it will distribute the winnings among its members,” Jones said.
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That doesn’t mean a verbal agreement among a group of co-workers carries no weight. Jones said a verbal agreement constitutes an enforceable verbal contract, but that can be difficult to prove should the dispute go to court.
According to Forbes Magazine, though office pools may seem like fun, a win can often lead to disagreements and lawsuits. The most common disputes, according to the magazine, are those where a pool member claims they bought the winning ticket with their own money that was not part of the office pool. Another common dispute could arise if someone who has played in the past didn’t play the week of the win but feels they should still be included.
When there is a dispute, the money could be tied up for months or years while the issues are sorted out in court.
To avoid such problems, the Iowa Lottery website outlines a few suggestions that could make divvying up winnings easier.
First, the Iowa Lottery recommends that a group define a clear set of rules and put them in writing.
“Some issues you may want to cover include: If a regular playing member is not present on lottery collection day, will they be included or excluded? What if a regular player has someone else put in money toward their game share, do both players receive an equal share? Can players come in and out of the group? How will your group claim any prizes you win? When the rules are in writing, there is no question about how to split the funds,” the website states.
Second, list everyone who puts in money for a particular drawing and how much they contribute.
“Put together a list of the names and telephone numbers of everyone in your pool. In particular, you should have that information for the people who are in charge of buying the tickets and the person who will hold the tickets,” the website suggests.
And third, the Iowa Lottery suggests that everyone in the pool be provided with photos or copies of the group’s tickets before the drawing. This should include the identifying numbers on the back of the tickets.
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“You may also want to tell people the name and address of the retail location where the tickets were purchased and the approximate time of the purchase,” the website adds.
With the terms and members of the pool clearly defined, chances are the group can avoid finding themselves in a courtroom with angry co-workers or used-to-be friends.
All of this work may seem silly, and perhaps it is, but a quick Google search can produce a pretty hefty list of office lottery pools gone awry.
Here are just a few:
• In Youngstown, Ohio, in 2011, Edward Hairston sued co-workers for denying a share of a $99 million payout. According to a lawsuit, he participated in an office lottery pool for eight years, and his contribution should have been covered when he was out of work for three months with a back injury. The suit was settled out of court for a confidential amount.
• In New Jersey in 2009, Americo Lopes won a $38.5 million Mega Millions jackpot with a ticket he’d bought as part of a an office pool with five co-workers. He hid the win from his co-workers, then asked his boss for extended time off to have surgery. When the co-workers found out, they sued him and collected about $2 million each.
• In Grand Bay, Alabama, in 1999, Tonda Dickerson, a former Waffle House waitress, won about $10 million in the Florida lottery with one of five tickets a customer gave to restaurant employees. Dickerson’s co-workers said they agreed to split the winnings and to buy the customer a pickup truck. The court agreed that there was an oral contract but ultimately decided that it was unenforceable because gambling is illegal in Alabama.
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