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What Are Lottery Pools and How Do They Work?

Boost Your Odds of Winning a Lottery Without Paying More Money

Have you ever seen one of those mega lottery jackpots giving away hundreds of millions of dollars and thought, “I’d be happy to win just a fraction of that amount?” If so, a lottery pool might be for you.

What Are Lottery Pools?

Lottery pools let you get better odds of winning a lottery without having to pay more money for tickets. A group of people pools money to buy lottery tickets together. They agree that if any of the tickets they buy wins, they’ll split the pot.

The result is that each participant receives less money than if they’d bought the ticket alone, but they also get better odds of winning in the first place.

How Lottery Pools Work

Here’s an example: your office lottery pool has 50 members. Each of your coworkers contributes a dollar into the pool. The lottery pool manager then buys 50 lottery tickets at $1 apiece and holds them safely until the lottery drawing.

Now, let’s say that lottery pool was very lucky and won a $50 million lottery jackpot. Each of the coworkers who participated will receive a million dollars (before taxes, of course). For the $1 buy-in, the lottery pool participants had 50 times the chance of winning for 1/50th of the total prize value.

Some lottery pools are more complicated. For example, some let people buy more “shares” of the pool by contributing more money. If one of the participants in the example above had contributed $5 instead of $1, and the lottery pool manager had used the extra money to buy 55 tickets instead of 50, he or she would be eligible to receive 5/55ths of the jackpot.

What Do Lottery Pools Do With Smaller Prizes?

Of course, it’s much easier to win $5 in a lottery than $50 million, and $5 divided by 50 is hardly worth even dividing out among the lottery pool participants. So what do lottery pools do with small prizes?

There are two options, depending on the size of the prize. The lottery pool can choose to either divide the small sum between the participants or, if the group buys lottery tickets regularly, they can choose to put the prize amount toward buying more tickets for the next lottery drawing.

Do Lottery Pools Work?

The chances of winning the lottery are very small no matter what you do, and there is no secret that can guarantee that you’ll hit a jackpot. But lottery pools are a way of increasing your odds without increasing your risk of losing your financial investment.

Lottery pools have won big jackpots in the past. For example:

  • According to an ABC News article, a 49-person office lottery pool at SEPTA, a Pennsylvania transit agency, won a Powerball jackpot for $172.7 million in April of 2012.
  • As a CNN article relates, a 7-person office lottery pool at New York State’s Division of Housing and Community Renewal in Albany split a $319 million Mega Millions jackpot in March of 2011.
  • Huffington Post shares the story of an office lottery pool at Quaker Oats that shared a $241 million Powerball jackpot among 20 employees. A few months later, they won a $10,000+ prize as well.
  • MetroNews in West Virginia reported that after 20 years of trying, the Mountaineer 26 lottery pool scored a million-dollar jackpot.
  • In July of 2018, 11 coworkers decided at the last minute to form a pool to buy Mega Millions tickets, according to a CNBC article. They won $543 million.

Who Participates in Lottery Pools?

Office lottery pools are popular because it’s easy to get a big group of people to chip in a few bucks each toward a chance of winning. A pool also encourages people to get to know one another across departments and can boost morale.

But any group of people can create their own lottery pool. Groups of friends or relatives, your local sweepstakes club, neighbors in an apartment complex, or members of any other social group might be interested in participating.

Do Lottery Pools Ever Cause Problems?

Unfortunately, yes. With a lot of money on the line, people can act badly and try to cheat fellow players. Lottery pool members have been sued for various reasons, including conflicts over who participated in the pool, whether tickets were purchased privately or for the group, whether the proper numbers were played, and more.

There have also been cases where unscrupulous people collected money for lottery pools then pocketed the cash without ever buying the tickets. These problems can be avoided with a little preparation.

Are Lottery Pools Legal?

Depending on your location, lottery pools may be restricted or illegal, so it’s important to check before you decide to start one. Lottery pools are a form of gambling. In the United States, there are no federal laws prohibiting gambling, but individual states can, and do, regulate it. If gambling is prohibited in your state, lottery pools are as well.

If you’re wondering whether playing the lottery is legal in your state, check whether your state runs a lottery. If your state has no lottery, it’s a good sign that gambling could be illegal.

You can also search for your state’s gambling laws. Findlaw.com has a list of gambling and lottery laws by state which could help.

Does Your Workplace Prohibit Lottery Pools?

Aside from laws prohibiting gambling, you also want to be sure that your workplace does not prohibit lottery pools during work hours. In some companies, gambling on the job is a fireable offense.

Before you start an office lottery pool, check your business’ code of conduct or employee handbook to see if there’s a no-gambling policy. If you’re still not sure, check with your company’s human resources department.

If you are a government employee or a civilian working at a government facility, you face additional restrictions. Lottery pools that take place “on Government-owned or leased property or on duty for the Government” are prohibited, according to Cornell Law School.

Summary

Before you get started, check with local laws and with your company’s human resources department (if you’re starting an office lottery pool) to ensure you are not breaking any laws or guidelines that could turn a fun lottery pool into a serious problem. If you decide to go ahead with your pool, make sure you have a good contract to protect yourself and your coworkers. Good luck!

Thinking of joining a lottery pool? Here's everything you need to know including how lotto pools work and how to avoid problems and misunderstandings.

Playing your office lottery pool? Get it in writing or end up in court

Have your lucky numbers ready for the Mega Millions jackpot? Buzz60’s Mercer Morrison has the story.

Mega Millions ticket (Photo: Wochit)

They called themselves the Dirty Dozen, and when the 12 coworkers at Pita Pan Old World Bakery in Chicago Heights, Illinois, won a $118 million lottery drawing in 2012, they were ecstatic.

That was until 11 of their colleagues came out of the woodwork and insisted they were in on the pool and deserved a slice of the pie.

It took three years and six law firms to settle the dispute. Eventually, the Dirty Dozen got $6 million each while six others split $13.8 – but nobody got a penny while the fight was tied up in court.

The simple lesson, say lottery officials and lawyers, is that before you plunk down your money in an office lottery pool, get everything in writing. Feelings of euphoria after a big win can easily turn to anger and litigation.

“The parties should sign a written contract, identifying each participant,” Chicago lawyer Michael Haugh, who represented the Dirty Dozen, said in an interview Wednesday.

“Money has a way of corrupting people,” he said, “and when you get into the hundreds of millions of dollars, otherwise honest people might be tempted to present a claim they know is invalid.”

Coworkers across the country are frantically pooling their money this week as the combined payouts for the Mega Millions and Powerball skyrocketed to nearly $1.2 billion.

By the next drawing Friday night, the Mega Millions jackpot will be at least $848 million, although you are 258 times more likely to be struck by lightning than to win. Wednesday’s Powerball jackpot pales by comparison, at $345 million.

No matter the amount, it’s winners beware, said Chip Polston, spokesman for the Kentucky Lottery Corp.

“We’ve seen office pools go really well and heard of some that have gone badly,” Polston said. “A big no-no is commingling personal and group tickets.”

Horror stories abound:

► In Youngstown, Ohio, in 2011, Edward Hairston sued cabinet company coworkers for freezing him out of a $99 million payout. He claimed he’d participated in an office pool for eight years and they should have covered his contribution when he was out 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 Mega Millions jackpot worth $38.5 million using a ticket he’d bought as part of a pool with five other construction workers. But instead of telling them, he asked his boss for extended time off to have foot surgery. The coworkers found out and sued him. Each collected about $2 million.

► In Grand Bay, Alabama in 2009, former Waffle House waitress Tonda Dickerson won about $10 million in a Florida lottery with one of five tickets a regular customer gave to restaurant employees. The coworkers claimed they had agreed to split winnings and to buy the customer a pickup truck. The court said the deal was an oral contract, but unenforceable because gambling is illegal in Alabama.

Not all pool wins go sour.

In Louisville in 2013, 27 information technology workers at Humana Inc., chipped in and won a $1 million Powerball prize. They then voted to share with two colleagues who had pitched in for years but were gone when money for the winning ticket was collected.

“I remember asking one guy why they did it” Polston said, “and without missing a beat he said, ‘Karma just dumped this cash in my lap. Who am I to go against that now?’ “

Lottery contract forms are available on line here, here and here.

The Illinois Lottery offers tips for pool players and an online contract that can be downloaded.

Among other things, Illinois recommends:

► Only participate in a lottery group with people you know and trust.

► Pick a diligent pool leader responsible for tracking members, collecting money, purchasing tickets, monitoring winnings and keeping detailed records.

► Distribute an accounting of all money collected and all tickets purchased before the drawing.

► Give photocopies of the front and back of each ticket to all pool members.

The Kentucky Lottery ran a lottery “captain” program for several years, but discontinued it about two years ago due to a lack of sustained interest by players, Polston said.

The other option, of course, is to buy your own tickets.

“Buying tickets in a pool increases your chances of winning,” said Haugh, the Chicago lawyer, “but it also increases your chances of disagreements.”

If you're participating in an office lottery pool, make sure you have a contract. Or you may end up fighting for your winnings in court for years.