How Do Multiple Winners Claim a Lottery Ticket?
Staying Anonymous After Winning the Lottery
Playing the lottery is a game of chance, but someone has to win. Oftentimes, especially when jackpots swell to gargantuan amounts, several friends, family members or co-workers pool their money and purchase tickets as a group. After the celebration ends, the real work of figuring out how to split the prize begins.
Each state runs its own lottery, and the rules vary according to that state. This is true even for multiple-state games such as Powerball and MegaMillions. You must claim the winnings within the state where the ticket was purchased. The majority of state lottery websites contain a list of Frequently Asked Questions or FAQ’s with information on multiple winners. For example, North Carolina and New York allow multiple winners to claim the prize, while the state of Washington will only accept one claimant.
In states that allow just one winner, a group can form a legal entity to handle the claims process. This may be a corporation, a limited liability company, a partnership or a trust. An attorney can help the group determine the best approach based on the rules of that state’s lottery.
If you are part of a group that buys lottery tickets together on a regular basis, you may want to form a legal entity at the onset. This can protect all members of the group should there ever be a win. Drawing up a contract with specific guidelines about playing and dividing winnings can prevent complications like those encountered by some co-workers in New Jersey. Though they pooled money and bought tickets as a group for years, one member claimed his winning ticket was purchased separately. Without a written contract, the case became one player’s word against the others.
Lottery winnings are a welcome windfall, but they come with sizable tax obligations. There is a danger in one person claiming the prize on behalf of a group because that group member incurs the entire tax liability. When the monies are distributed to fellow winners, the department of revenue can deem these taxable gifts resulting in additional tax burdens to each winner. Consult a tax attorney, accountant or financial adviser prior to accepting any winnings to get advice on the best way to minimize tax payouts.
Getting the Money
If you believe your group has the winning numbers, call the state lottery office for specific instructions, including scheduling a time to appear in person. Some states require any and all winners to attend a public awards ceremony. Only six states allow lottery winners to remain anonymous — Kansas, Delaware, Michigan, North Dakota and Ohio. In others, an Affidavit of Multiple Ownership must be completed if all of the winners can’t collect in person.
What Happens to Lottery Winnings if You Die Before Payments Are All Paid Out? →
Claim Lottery Winnings Anonymously →
How Should One Handle a Large Lottery Win? →Playing the lottery is a game of chance, but someone has to win. Oftentimes, especially when jackpots swell to gargantuan amounts, several friends, family members or co-workers pool their money and purchase tickets as a group. After the celebration ends, the real work of figuring out how to split the prize begins.
What Lottery Pools Are and How They Work
Boost Your Odds — 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 paying more money for tickets. A group of people pools their money together to buy lottery tickets. If any of the tickets they buy wins, they then split the pot. Sometimes, the pool members agree to let smaller prizes “roll over” by purchasing more tickets with them, instead of cashing out.
The result is a trade-off: The odds of winning rise, but the payout drops.
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, 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, that big spender would be eligible to receive 5/55ths of the jackpot instead of 1/50th.
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. well, it’s hardly even worth doing the division to split the money 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 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.
For example, if the pool hit a $10 prize, instead of giving $0.20 to each participant, they could agree to buy $10 worth of additional tickets in the next drawing.
Do Lottery Pools Work?
The chances of winning the lottery are very small no matter what you do, and there’s no guarantee that you’ll hit a jackpot. But lottery pools do let you boost your chances without increasing your risk of losing your investment.
Lottery pools have won big jackpots in the past. For example:
- A 49-person office lottery pool at SEPTA, a Pennsylvania transit agency, won a Powerball jackpot for $172.7 million in April of 2012.
- 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.
- 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.
- 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. They won $543 million.
- In August of 2018, a group of 11 officemates hit a $4.9 million prize. They’d been chipping in $3 a week for four years!
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 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 strong indication that gambling might 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.
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. ]]>