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Powerball fever and office lottery pools

January 13, 2016

By Kristin Cifolelli, courtesy of SBAM Approved Partner ASE

Powerball fever is hitting the nation.  In case you haven’t heard, no one matched the winning numbers on January 9th, 2016 drawing, and the Powerball jackpot has now risen to an expected $1.5 billion.   The lump-sum cash option for the jackpot would be approximately $930 million. The jackpot would be twice as large as the as the previous biggest U.S. lottery prize when Mega Millions paid $656 million in March 2012. According to the Powerball website, the odds of winning the grand prize when matching all 5 numbers plus the Powerball is one in 292 million.

Office lottery pools are undeniably fun and they build excitement and camaraderie among coworkers, which cannot be a bad thing. However, there have been a number of high profile-lawsuits and untold amounts office drama that have come out of office lottery pools, most arising from problems with rules around participation.

One of the more notable office dramas involved a McDonald’s employee, Mirlande Wilson, who in April 2012 was in charge of purchasing tickets for the work lottery pool.  Wilson claimed she had the winning ticket but later misplaced it.  Three Maryland educators subsequently stepped forward to claim the record- breaking $640 million Mega Millions prize. Lottery officials declared them the legitimate winners and Wilson’s actions were dismissed as a hoax.  The McDonald’s workers later sued alleging that Wilson did hold the winning ticket and orchestrated an elaborate scheme to recruit the educators to cash it.

In Ohio, Stephen Kyle ran the office lottery pool with 19 other Ohio postal workers.  In June 2005, he found himself with a winning ticket worth $175,000. He claimed the winnings were all his, purchased with his personal $10. Six of his colleagues later sued, and the jury awarded all 20 postal workers a portion of the winnings. One of the giveaways: Kyle had always given his co-workers copies of the pool tickets, but this time he just so happened to have destroyed them.

In order to avoid some of the issues that can arise, HR departments should consider the list of steps below for pool organizers to take:

  • Make sure the lottery and your lottery pool are legal: Ensure your office lottery pool isn’t against the law.  Some states prohibit all games of chance including lotteries and office lottery pools.  Michigan is not one of those states.  In addition, regulations prohibit federal employees from conducting a lottery or pool while on duty or on government-owned or leased property.
  • Make sure the lottery pool isn’t against company policy: While office lottery pools may be legal, they may violate your organization’s workplace policies.  Employees should check with Human Resources to make sure they aren’t violating workplace rules.  Often lottery pools fall under workplace “no gambling” policies.  Many organizations become concerned when money (possibly big money) is at stake and they don’t like the office distractions the process can bring.    While organizations can’t ban employees purchasing tickets together on their own time, they can ban time spent at work coordinating the activities.
  • Name a leader: Everyone participating in the pool should have a clear understanding of who is coordinating the details of the lottery pool.  This includes collecting the money, purchasing the tickets, distributing copies, etc.  In order to keep the appearance (as well as the reality) of fairness and avoid accusations of fraud, it may be wise to put someone different in charge of each successive pool. A simple rotation of the names would be equitable.
  • Create a contract: A contract should be created, applying to all participants, that outlines how key aspects of the lottery pool will be handled.  It should include items such as who is participating in the pool, how often, when tickets will be purchased, when numbers are specifically chosen or computer chosen, are winnings taken in a lump-sum or an annuity, etc. 
  • Make it public: There should never be any surprises regarding who is in the pool and who isn’t.  Names of participants should be publicly available to avoid confusion.  This will head off claims coming from those who regularly participate in the office pool but didn’t the week of the win. Experience shows that they often feel they should be included anyway.
  • Make copies of the tickets: A common source of trouble in lottery pools is the claim that the winning ticket was purchased separately with the organizer’s own money.  Tickets should be purchased ahead of time and copies should be distributed to each participant to avoid any confusion.  Participants would be wise to create a rule prohibiting the person purchasing the office tickets from purchasing a personal ticket at the same time.
  • Keep the tickets safe: tickets should be kept locked up and safe, but in a neutral location (for example, locked somewhere in the office, not at the pool organizer’s home).

If you haven’t bought your ticket, there is still time!Lottery retailers throughout Michigan will be selling tickets until 9:45 p.m. tonight, and the actual Powerball drawing will take place at 10:59 p.m. tonight.

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