Lottery Pools - What They Are, and How They Work

Lottery Pools Can Boost Your Odds of Winning a Lottery.

Image of a woman buying tickets for her lottery pool.
Woman buying $280 worth of Mega Millions lottery tickets for her office lottery pool.. Getty News / Getty Images

Have you ever seen one of those mega lottery jackpots giving away hundreds of millions of dollars and thought, "I'd be happy if I could just win a fraction of that amount?" If so, a lottery pool might be for you.

Definition of What Lottery Pools Are:

Lottery pools are a way of getting better odds of winning a lottery without having to pay more money for tickets. A group of people chips in money to buy lottery tickets with the agreement that if they win, they will split the pot.

So the participants will have to share any money they win, but they also get better odds of winning in the first place.

How Lottery Pools Work:

Here's a simple example: your office lottery pool has 45 members. Each of your coworkers contributes a dollar. The lottery pool manager then buys 45 $1 lottery tickets and holds them safely until the lottery drawing.

Now, let's say that lottery pool was very lucky, and won a $45 million lottery. 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 45 times the chance of winning for 1/45th of the total prize value.

What Do Lottery Pools Do with Smaller Prizes?

Of course, it's much easier to win $5 in a lottery than $45 million, and $5 divided by 45 doesn't amount to very much. So what do lottery pools do with small prizes?

There are two options, depending on the size of the prize.

The lottery pool can choose to 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.

Do Lottery Pools Work?

The chances of winning the lottery are very small no matter what you do, there is no magic bullet.

But lottery pools are a way of increasing your odds without increasing your financial investment in a long-shot dream.

Lottery pools have won big jackpots in the past. For example:

  • According to an ABC News article, a 49-person office lottery pool at SEPTA, a Pennsylvania transit agency, won a Powerball jackpot for $172.7 million in April 2012.
  • As a CNN article relates, 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.
  • Huffington Post shares the story of 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.

There have also been many reports of lottery pools that have ended up in lawsuits or people being cheated out of ticket money or wins. It's a good idea to set up a set up a lottery pool contract before you get started, to make sure that everyone is treated fairly.

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 each toward a chance of winning.

It also helps to encourage people to get together across departments. But any group of people can create their own lottery pool; groups of friends or relatives, your local ​sweepstakes club, or members of any other social group might all be interested in participating.

Are There Any Restrictions on Lottery Pools?

Some companies have a no-gambling policy that prohibits their employees from participating in lotteries or other betting pools while on the job. It's a good idea to check with your human resources department before starting a lottery pool at work. 

Do Lottery Pools Ever Cause Problems?

Unfortunately, yes. 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, and other reasons.

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. See Tips for Running Fair Lottery Pools for more information.

Are Lottery Pools Even Legal?

Whether lottery pools are legal or not depends on where you are located. A lottery pool is a form of gambling. In the United States, there are no federal laws prohibiting gambling, but individual states can, and do, prohibit 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, a good place to start is to check whether your state runs a state lottery. If your state has no lottery, it's a good sign that gambling could be illegal. See Lottery Games by State to see which states offer lotteries.

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 firing 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 (see Cornell Law School for more information).

Summary:

Before you get started, check both 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, read how to avoid lottery pool problems for tips on how to protect yourself and your coworkers. Good luck!

Disclaimer: I am not an attorney, and this is not intended to be legal advice. For professional advice, please contact an experienced lawyer.

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