Office, family or friends for decades have loved to play the lottery in a pool, group to play bigger stakes for less with one mission – to win the big one. This all seems great, until of course, the fun and games fall away when someone loses their share of the winnings.
For decades, groups of people jointly purchase lottery tickets in hopes of winning and sharing the prize, and when hearing that there’s a lottery group play nearby everyone wants in on the action as no one wants to be left out of the game should the group actually win. These groups are usually formed informally with no hard set rules. We all know the odds of winning are very small and luckily when it does happen, the collecting and sharing of the prize usually goes smoothly. However, once in a while disputes as to who is entitled to a lottery share become problematic.
It’s not often a lottery group dispute crops up to the point where it goes to court but it has happened. The following are some types of employee lottery disputes that have been before the courts:
Taylor v. Smith, 1995 CanLII 7219 (ONSC)
Issue: Is employee group member entitled to a portion of a winning ticket when the ticket purchases were contrary to his understanding of the contribution?
Facts: Group leader collected $4 from employees to buy lottery tickets for Draw A and Draw B. Some of the group decide to use the money to purchase only for Draw A (Contributor David Taylor was not part of this decision). Draw A takes place and is not a winner. Group leader then collects more money for Draw B and Taylor says that he already contributed for Draw B. Draw B wins the group $1.15M. Group meets and decides Taylor not entitled to a share. Draw B wins the group $1.15M. Group meets and decides Taylor not entitled to a share.
Result: Court decided that the person collecting money for the draw was a holding the money in trust and had an obligation to apply the funds collected in accordance with the terms by which each member paid. Group leader breached the terms of the trust by excluding Taylor from the winnings. Taylor entitled to his equal share.
Spiro v. Koc, 2016 ONCA 592 (CanLII)
Issue: Was an employee lottery contributor entitled to a share after leaving his employment?
Facts: Bank employees together pooled money for a lottery for which participants were not always the same. Paul Spiro was a contributor to the lottery pool for a lottery ticket purchased on June 25, 2010. Spiro left his bank job on July 16, 2010, and stopped participating in the employee lottery pool. Tania Cam started with the bank after July 19, 2010, and on August 25, 2010, she took the June 25 ticket to a local vendor and learned that the June 25 ticket had resulted in a free play ticket that won $1M on August 13. Tania proceeded to split the winnings 5 ways but did not give any to Spiro.
Result: Court found that Spiro and the other 4 employees were entitled to the winnings and that Cam was not. Cam was not a co-owner of the June 25 lottery ticket.
Clancy v. Gough, 2011 ABQB 778 (CanLII)
Issue: Did group agree to contribute lottery pool monies for absent members?
Facts: The 2 plaintiffs claim they are entitled to 2 shares of the $20M lottery winnings. Plaintiffs claimed that there was an agreement amongst the lottery pool members that no member was left out of a lottery draw on account of not being personally present to contribute.
Result: Court found that the evidence of the other participants did not support the plaintiffs’ claim that they had all agreed that those present for the purchase of lottery tickets would contribute on absent members and then recoup the contribution.
Well that was a downer… So, rather than get yourself all broiled up in a lottery group play lawsuit, its way better to avoid anything along those lines by simply entering into a clear written agreement which should include the following:
A designated group leader
This person will be responsible for getting all those involved sign the agreement, collect money to buy lottery tickets, and the person who buys the lottery tickets in accordance with the terms of the agreement.
Other responsibilities of the group leader will be:
- manage the lottery pool agreement; update for employees who have left the lottery pool and new employees who have joined;
- manage the group-play member lists;
- distribute copies of the tickets along with the group-play list prior to the draw;
- validate the lottery tickets after the draw and report the results to the group members as soon as reasonably possible and before the next draw;
Lottery group members
The lottery group needs to be clear and up to date. Group members for each lottery draw are determined by those on the group-play form that have:
- signed the form; and
- paid the contribution money in advance of the ticket purchase and by the cut-off time.
- Group-play form should indicate:
- the cost per person;
- the name of the lottery tickets being purchased and their draw dates.
When it comes to lottery winnings, and yes, the group is bound to win smaller amounts during its existence (you know, like a practice round/s to the big one) then the likelihood that the group will win free lottery tickets online is quite high. It will be up to the group’s leader to immediately inform the group and it’s advised that the group play these tickets into the next draw. The reason being is that someone could leave the group or enter the group and then things could get a tad tricky.
Group members also need to decide, what threshold amount of lottery winning will be used towards a future lottery purchase? How prize winnings will be split as a team, and whether each lottery group-play form is a new agreement.
In the event that a lottery group member is sick, on vacation, or otherwise absent, therefore unavailable to sign the form or to contribute money, then it needs to be understood from the beginning and mentioned in the agreement, that person is not a member of the group at the time of play. Plus, in this case, there will also be no legal or moral obligation on the part of the Group Leader or other member to contribute on the absent person’s behalf. However, any group member may sign the form and make contribution on behalf of a co-worker.
The group members have a duty of good faith to each other and will treat each other fairly and with respect.
Sounds like a lot of paperwork right? Well, imagine you do win big but one or more members decides to dispute it claiming they're entitled to more money – now suddenly you've got a whole lot of paperwork, legal paperwork!
So it would be in your lottery groups best interest to have an agreement to that it protects all members of the syndicate and to ensure maximum fairness.
Obviously it’s important to note that this information is supplied as-is and if you have any specific questions on forming a legally binding agreement we urge you to first discuss it with a legal professional.
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