The problem with lottery pools is that the people who organize and join them really don’t expect to win. A bunch of coworkers gets together and each contributes a few bucks to buy lottery tickets on the off chance that they’ll win.
But since nobody seriously believes that they would win something against astronomical odds, most people won’t bother taking the steps that are needed when a large sum of money needs to be claimed and transferred to the parties who are legally obligated to a share.
This isn’t just me hypothesizing about what could happen (and what could go wrong) if a lottery pool wins money but doesn’t properly prepare for the windfall. In this article, we’ll take a look at two lottery pools where things went wrong.
A group of nine hair stylists working in an Indiana salon decided that they were going to pool their money together and buy lottery tickets. The group of women “routinely” chipped in $5 per person to buy the lottery tickets. One of the women would be responsible for taking the money and buying the tickets, and the person responsible would change each time.
Fun fact: the group of women decided to make a rule up that whoever bought the tickets with the pool’s money could not also buy her own tickets at the same time. This was to avoid the potential for one of the women to claim that she won her own jackpot, but used the group’s money.
Well, as fate would have it, the pool produced a winning-numbers combination that netted a $9.5 million jackpot. And as fate would have it, the lady that was in charge of buying the tickets that week claimed that she won the jackpot with her own numbers and money, not with the pool’s numbers and money. She claimed that she bought her tickets at the same time that she bought the group’s tickets, despite their agreement.
Naturally, the group decided to take the matter to the court, and after six months, the case was solved via an undisclosed settlement right before the court was to rule on the case.
In a more famous case that took place in Chicago, a group of 12 individuals got together and won a $118 million lottery jackpot. The problem with this pool is that, according to records and testimony, the participants who contributed to the pool differed from week to week and from drawing to drawing.
People who had entered a previous drawing believed they were included in all of the drawings, whether or not money was collected. There was confusion about whether or not previous winnings that included small cash prizes like $10 would be paid to the pool members, or would be applied to the next drawing on behalf of the entire group. And still, other people seemingly showed up claiming to be members of the pool without much proof to back it up.
Obviously, this also turned into a lawsuit. And it got to be a fairly large lawsuit before all was said and done. By the end, there were over 23 people and six different law firms all fighting over who should get a cut of the money.
After months of this type of back and forth, all parties involved had to reach an agreement, or else nobody would get any money. It’s a state law that no money can be released while disputes were active.
It turned out that the 12 original members each received $6 million, and all of the rest who were able to show some semblance of involvement were awarded about $13 million to split. Granted, this doesn’t account for the taxes and legal fees, but these were the rough final numbers.
The moral of the story: know who the heck is in your pool if you want to have one, and take the steps to legally protect those who are included. Take it as seriously as if you really expect to win, and prepare accordingly. If it’s too much trouble to take these measures, then don’t join the pool. Win the jackpot on your own.