Lottery Pool? Take These Precautions Before Diving In

With two gargantuan lottery jackpots in the mix this week, you might be looking to improve your odds of winning by joining a lottery pool. In a lottery pool, a group of people (often coworkers) team up to buy lottery tickets and agree to split the payout if they win.

It can be a thrilling way to socialize with others in your office, like filling out a March Madness bracket. But if luck strikes, the stakes can be a lot higher.

Consider the Mega Millions jackpot up for grabs this week. The cash option is $525.8 million. If you and four of your work friends formed a lottery pool and won, you would each walk away with more than $105 million before taxes. Yes, your odds of winning the jackpot are very small — about 1 in 303 million. But if your group wins, there are much better odds you’ll become embroiled in some sort of legal action to determine who all is entitled to a piece of the prize.

It might sound onerous, but a little planning and a solid paper trail could help you protect your winnings, says Andrew Zelman, an employment lawyer with Berger Singerman in Fort Lauderdale, Florida. “I think you have to look at it and say, ‘What is everything that could go wrong?’”

It’s in your best interest to be as clear as possible about who’s part of your lottery pool.

“There’s been a lot of litigation where a regular lottery participant doesn’t participate one time or isn’t asked one time and now all of a sudden the group wins and, well, do they have a claim?” Zellman says. “It seems like, whenever an office pool wins something and it doesn’t include the entire office, there’s going to be a claim somewhere. And, you know, there are ways to protect against it.”

Zelman suggests drafting a written agreement like a contract. It doesn’t have to be more than a page. In it, you’d definitely want a written list of names of anyone included in the pool. But consider creating a record of other important details such as how much everyone agreed to pay and by when, what numbers you’re using (if you’re not getting numbers randomly generated), how many tickets you’re buying and anything else that could easily become a point of contention when it’s time to claim your prize.

A lottery pool can have a lot of moving parts. Zelman recommends choosing one person who can keep track of collecting money from the right people, recording numbers to play, buying tickets, getting them photocopied and holding onto them until the draw.

Group members who aren’t the leader could consider sending money through electronic means, such as Venmo or a similar service, to create their own record of having paid into the pool. But Zelman says that’s not totally necessary if the group has a written agreement in place.

The moment your lottery pool wins the jackpot is not the time to decide certain things as a group.

For example, will you share the news of your good luck with the rest of your coworkers or lock it down? How will you claim your winnings? And will you take the cash option or the annuity?

If you’re putting together a contract with the details of the lottery pool, you should include these kinds of arrangements as well, Zelman says. “Because if you don’t do those things and you win, you might have an issue.”

(Photo by Drew Angerer/Getty Images News via Getty Images)