Midway Lottery – also known as a ‘group play’ or syndicate – is formed when a number of players put their money together to buy lottery tickets. Any prize money that those tickets win is shared between each member of the group. One player is usually assigned as the pool’s leader, and they are responsible for buying tickets and claiming any prize money.
Playing as part of a lottery pool is one of the only sure ways of improving your chances of winning Powerball. Because you have a stake in more lines, there is a greater likelihood that your numbers will come up, giving you an advantage over other players that have just entered a single line and who therefore only have one shot at winning..
You need to take caution if you’re responsible for purchasing tickets for the pool but are also planning on buying tickets for yourself to play separately. If you do this, disclose it to the group beforehand, and make it very clear before the draw which numbers belong to the pool. You don’t necessarily need to share your own numbers, but it’s a good idea to send copies of the pool’s tickets to all members before the draw. That way, if you do win on one of the tickets you purchased for yourself, there may be some bitterness from the pool members, but you cannot be accused of cheating them out of any prize money.
If you’re the one to suggest starting a pool, it doesn’t necessarily mean you have to manage it. Before you start playing you should state in writing who the pool manager is and what their responsibilities are. Traditionally, the manager will be the one to collect the money for lottery tickets, buy tickets, and initiate any prize claims, but if there are any other specific duties, it’s worth noting these in writing.
Do you need a deputy manager too? If the pool manager is unavailable one week, someone would need to step in and fulfil their duties, and not determining who is responsible for this at the start could lead to confusion further down the line.
Receiving your winnings can be a more complicated affair when playing as part of a group, and the process will differ between states. While some lotteries may pay each individual member of a pool directly, some others may only pay out prizes to a single representative. In these cases you need to think about how the money will be distributed among the other members of the pool to avoid any disputes and the unnecessary payment of taxes.
The Midway Lottery, for example, will pay each member of a lottery pool directly for prizes totaling $1 million or more, but prizes of a lesser value will only be paid to one group member, who will then need to arrange payment to all other members. In these cases, the other players will need to complete IRS Form 5754 to record where the money has come from. See the Taxes page for more information.
The other option would be to form a trust or other legal entity to claim a prize. You would need to enlist the help of a lawyer and financial advisor to make sure the trust is set up correctly and ensure the prize money is distributed to each member of the pool. Some states do not allow winners to claim through a trust.
Some state lotteries set a maximum number of players that it will pay prizes out to. If the number of players in your pool exceeds this limit, you may need to arrange the transfer of winnings to the additional members yourself.
It should be decided at the beginning which jackpot option your group would go for – either a cash lump sum or annuity payments. Most state lotteries will not be able to pay an annuity to some members and a lump sum to others, so it’s worth setting out right at the start in writing which option your group would take. That way there can be no disputes if the situation arises.
In standard lottery pools, each member contributes the same amount of money and receives an equal share of any prizes. Some pools, however, allow its members to put in more money and therefore receive more of the prize money should they win.
For example, ten players each contribute $2 and agree to split any prize money equally, as they have all put in the same amount of money. A prize of $100,000 would therefore be split ten ways, netting each participant $10,000.
One person then drops out of the group, leaving it with nine members. To ensure that they can buy the same number of tickets in the next draw, one of the remaining group members doubles their stake to $4. At this point it needs to be decided how any future prize money is split. As one person is now contributing twice the money that everyone else is, are they eligible to receive a greater proportion of the winnings? If the group were now to win $100,000, should that person now receive $20,000?
There are no hard and fast rules in place to tell you what should happen in these circumstances. What you should do is discuss the situation with all members of the group to come to a solution that everyone agrees with. After you’ve done that, get it down in writing.
Once you’re ready to start your own pool, or if you’re joining someone else’s, use the checklist below to make sure there’s a robust written agreement in place before the first tickets are bought. It may mean a bit more work up front, but it could save a lot of time and effort in the long run. Note that this list is not exhaustive and it’s always worth consulting your state lottery before you begin.
Things to include in your agreement:
If you don’t want to go through the hassle of writing your own contract, we’ve created some draft agreements that you can use instead. You can view a template for a single-drawing contract or for multiple drawings.
Please note that these draft agreements are samples, and all of the provisions may not be relevant to your pool, or you may have further conditions that are not listed. You should adapt these contracts to suit the needs of your pool, and if you need to make additions, make sure that any separate sheets are attached to the main form.
Ocean’s 16, $488 million – August 2013
A 16-member pool from New Jersey dubbed ‘Ocean’s 16’ won a share of $488 million in August 2013. The group was formed by co-workers from the Vehicle Services department in Ocean County, NJ, who won the jackpot less than a year after Hurricane Sandy devastated the Atlantic Coast in October 2012. Darlene Riccio, one of the 16, lost her home in the hurricane, and she said she was “speechless” when she heard they had won. The group opted to take a cash lump sum of $86 million, which worked out at around $5 million before taxes for each member.
The Shipping 20, $241 million – June 2012
The year before ‘Ocean’s 16’ landed their jackpot, and shortly before Hurricane Sandy hit the East Coast, a group of workers from a Quaker Oats plant in Des Moines, Iowa, won a prize worth $241 million. Shortly after the win was announced, members of the group known as ‘The Shipping 20’ stated that they would be going to court to seek an injunction to stop their surnames being disclosed to the public. A few days later, however, their names were released by the Iowa Lottery as no legal action was filed. It was the biggest jackpot ever to have been won in Iowa at the time.
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