(NEXSTAR) — When a lottery jackpot reaches high levels like last week’s $1.08 billion Powerball prize, or this week’s $910 million Mega Millions payout, it’s hard not to imagine what it would be like if you won. But with the odds stacked against you (there’s a 1 in 302.6 million chance you win the Mega Millions jackpot), it may be enticing to want to join your office’s lottery pool.
On the surface, pooling together with your coworkers to vie for the record-setting prize sounds advantageous. In theory, you’re all contributing a dollar or two, which means more drawings on the ticket. More drawings do increase your odds, though only slightly, at a much lower price than if you were buying the same number of tickets yourself.
As tempting as it is, joining your workplace’s lottery pool may have more downs than ups.
The most obvious is the smaller payout.
Let’s use the current Mega Millions jackpot as an example. Say you and nine other coworkers all contribute to a lottery pool, and you beat the odds to win the jackpot during Friday’s drawing. Currently, the grand prize has a cash option of $464.2 million. You all decide to opt for the cash payout (because who wants to split annuitized payouts for the next 30 years?).
After taxes — about 37% of your winnings will be withheld — your pool would walk away with anywhere from $241.9 million (if you’re in New York) to $292.5 million (if you’re in California, Florida, or any state that doesn’t have a local lottery tax), according to an analysis by USA Mega. So if you live in California, for example, you’d each receive about $29.25 million, one-tenth of the overall prize.
That’s if you even get your payout.
There have been multiple cases of coworkers claiming — wrongly or otherwise — that they were part of a winning office lottery pool but were never paid. In 2012, a group of 12 coworkers from a bakery in Chicago Heights, Illinois who called themselves “the Dirty Dozen” won a $118 million lottery prize. They were all excited until 11 of their coworkers insisted they were also in the pool and deserved their payouts.
After three years in court, the dispute was settled, according to the Courier Journal. Each member of the Dirty Dozen received $6 million and six others split $13.8 million. A similar case in California from 2005 had a different ending. An office pool was sued by four of its coworkers who claimed they had made oral agreements to get in on the winnings, ABC News reports. The suits were ultimately dismissed.
So how can you avoid losing your rightful winnings? It may sound old-fashioned, but experts say to put everything in writing.
Brandan Davies, an attorney with Roth-Davies, LLC, told Nexstar’s WDAF in 2018 that you should get a copy, in writing, of all of the pool’s participants. While it won’t necessarily keep others from outside the group from suing, “it will give you a leg to stand on.”
Experts also recommend assigning a leader for the pool that will track participants, contributions, tickets, and the winnings. That person will also likely be responsible for completing the necessary paperwork if and when your group wins, California Lottery deputy director of public affairs Carolyn Becker told Nexstar. That paperwork can vary depending on the size of the prize.
Some states may even require the group representative to distribute the winnings to the participants. This is true in California, for example, if there are more than 100 people in the group or if the prize is less than $1 million.
You may also want to establish rules for the pool, ensure each member has a photocopy of the tickets, and have a plan in place should your group win. And, maybe most important, only enter a pool with people you trust.
“And I can’t underscore enough that people who play in a group setting should absolutely trust their fellow players, know the rules for group claims, and make a plan beforehand on what would happen if they hit the big one!” Becker noted.
Mega Millions is played in 45 states, Washington, D.C., and the U.S. Virgin Islands. Tickets start at $2 each, and drawings are held every Tuesday and Friday at 11 p.m. ET.