Winning Office Lottery Pools: See You in Court

​What happens if employees enter an office lottery pool, defy the long odds and win the lottery—most recently at $1.54 billion for Mega Millions and $750 million for Powerball? Often the co-workers or their colleagues sue each other. We've gathered articles on office lottery pools from SHRM Online and other trusted media outlets.

Lawsuits Brought Over Winning Tickets

Lawsuits over winning workplace lottery pool tickets abound. In 2011, a Youngstown, Ohio, employee sued cabinet company co-workers for excluding him from a $99 million payout. He said he'd been in the pool for eight years and that co-workers should have covered his contribution when he was out on a back injury. The lawsuit was settled. In 2009, one New Jersey worker won a Mega Millions jackpot worth $38.5 million with a ticket from a pool with five co-workers. He didn't tell the co-workers, but they eventually found out and each collected about $2 million. And in 2009, a waitress won about $10 million in a lottery with one of five tickets a regular customer gave to employees. The co-workers said they'd agreed to split the winnings, but a court said the agreement was an unenforceable oral contract.

(USA Today)

Tax Consequences

Be careful about how you collect your winnings. Those who claim a prize on behalf of a group take on the full income-tax burden. Money distributed after claiming the prize would be a gift and the gift-giver likely to incur gift tax and possibly estate tax consequences. Taxes on lottery winnings also might vary by residence and where the ticket was purchased, so those who live in one state and work in another could lose a larger percentage of their winnings to taxes than colleagues.

(CNBC)

Ways to Help Limit Litigation

Workplace lottery pools can be less litigious if pool participants follow some simple rules: name a pool leader; create a basic contract that spells out such issues as who is playing and whether a lump-sum or annuity will be taken and that all participants sign; make a public list of the contract; make copies of the tickets before each drawing and give them to each participant; and keep the original tickets safe.

(Forbes)

What if the Office Pool Wins?

If the improbable happens and the pool wins, the pool leader typically signs the ticket. He or she might take a selfie  with the numbers of the ticket and the pool leader's face distinguishable. Then there's the really tall order: keeping quiet about the win while determining what to do with the money. The group that purchased the ticket should be assembled and discuss next steps. A trust might be established and a lawyer—or, with a group involved, multiple lawyers—might assist.

(Florida Today)

Bonding Experience

Office lottery pool winnings sometimes strengthen workplace relationships instead of ending up as a legal fight. A group from a real estate company won $1 million in 2013, splitting the payout among the 12 workers who chipped in $20 for the pool and giving a portion to a new employee who hadn't contributed. "The fact that we got to share in an experience that most never have in a lifetime—winning a Powerball—we grew closer," one co-worker said.

(ABC News)

Little Risk to Employers with Office Lottery Pools

Employers should not give their seal of approval to office pools—they are a form of gambling and therefore are illegal, after all. However, activities such as office lottery pools with nominal bets can have the effect of improving workplace morale and boosting productivity. "It is very unlikely that authorities will come knocking to break up an office pool," said Bernard Tisdale, an attorney with Ogletree Deakins in Charlotte, N.C.

(SHRM Online)