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Lottery pools in workplace require caution

As lottery promoters will tell you, you have to play to win. But when it comes to playing with other people's money, experts have another saying to keep in mind: Trust but verify.

After a rash of high-profile lawsuits alleging lottery-ticket fraud among groups of coworkers, some fun-loving players are getting serious about the precautions they take to ensure fair play when it comes to pooling ticket money with colleagues. And some in the human-resources field say workplace pools should be banned outright.

Baltimore resident Hayley Mayer, who works for the state, regularly pools money to buy Mega Millions tickets with several coworkers. And they've drafted a simple contract to structure their ticket purchases.

"It evolved after a bunch of news stories about lottery pools and people not distributing the money fairly," Mayer said. "We have a concern that someone will buy a ticket for themselves at the same time they get the group lottery tickets, and then win and claim it was their ticket."

In April 2012, a case involving similar themes made headlines in Baltimore. Mirlande Wilson, a McDonald's employee in Milford Mill, had been tasked with buying Mega Millions tickets with money contributed by about two dozen coworkers. She later claimed she was the sole winner of the $656 million prize because she had purchased the winning ticket separately from those purchased for the pool. (She ultimately never produced a winning ticket. Instead, three area teachers claimed the prize.)

A lawsuit is under way now in Indiana, where a group of salon employees went in on lottery tickets together. The worker who purchased them, Christina Shaw, said she bought other tickets separately, including the $9 million winning ticket, which she said is hers alone. Her colleagues cried foul; the trial is set to start in September.

And these cases are not unheard-of; from New Jersey to California, lottery pools have spawned coworker lawsuits claiming fraud.

Trying to learn from others' mistakes, Mayer and her coworkers take turns purchasing the tickets. The language of their contract stipulates that participants must contribute to the pool the first day of the month the tickets will be bought. The person who buys the tickets must check all tickets purchased to make sure they are correct and cannot buy a personal ticket at the same place the group tickets are purchased. They must provide a copy of the tickets to all pool members before the drawing.

Mayer said that while she doesn't worry about her colleagues cheating, the contract is reassuring. "I feel better with the rules," she said. "I trust my coworkers, but if there were millions of dollars involved, I'm not sure how honest everyone would be."

But over at ADG Creative in Columbia, there's a more casual approach to the lottery pools.

"We buy a ton and keep rolling our winnings into another week's worth. We had 28 people (out of 60 in the office) kick in $5. We had 75 tickets and won $11," said Joyce Whitney, the firm's director of creative services.

Whitney doesn't worry about her coworkers, but she admits her human resources department might be leery about the prospect of a winning ticket. "I think it made HR just a bit nervous," she said, "not so much for legal reasons, but because a win would mean we would need to replace people rather quickly!"

Brenda McChriston, CEO of Spectrum HR Solutions in Baltimore, recommends that companies take a more serious approach to managing workplace pools, even banning them outright.

"The game changes when there's money involved," she explains. "We recommend that they even ban football pools. If [employees] want to do something on their own time, we can't regulate that, but if they're in the office passing around money to buy lottery tickets or football and basketball pools, it is a distraction from work."

She acknowledges that employees can find numerous ways to distract themselves at work. "But," she said, "we don't want gambling to be one of them."

When lottery purchases are framed as gambling, employers and employees both have an easier time swallowing workplace bans, said McChriston. When one of her clients banned fantasy football and lottery pools at the office, employees and management didn't like it at first.

"But when they saw it as 'gambling,' the managers bought it — and they could sell it to the employees," she said. "It cut out any raucous behavior when someone needed to pay up on a pool."

In many cases, however, lottery pools can add some welcome levity to the workday.

John W. Michal, assistant professor of management at Loyola's Sellinger School of Business, considers activities like playing the lottery an important way to help coworkers form strong relationships and have "spontaneous fun" in the workplace.

Michal, who conducts research on workplace fun, said that enjoyable activities spearheaded by employees themselves, not manufactured by the company, are vital to employee happiness and can actually reduce employee turnover.

"When people come together to play the lottery, it provides a social activity," he said. "It allows coworkers to band together as a group playing a game. They choose to come together as a team."

But even so, he said, having it spelled out in writing makes sense.

"Whenever you engage in an activity like this with people, even close friends need to have a contract," Michal said.

Carole Everett, director of communications for the Maryland Lottery, agrees that having a written policy makes sense. She said many coworkers have developed systems like the one Mayer and her colleagues adopted.

"Smart companies will make a copy of all the tickets, so everyone has the information and there are no questions asked," Everett said. "A lot of people come in [to pick up winnings] in groups. There's lots of fun with group play. You always read something about somebody suing someone, but we get fun stories."

Tips for playing the lottery with friends and colleagues

The Maryland Lottery provided the following guidelines to make lottery pools run smoothly:

• Agree on the rules. Decide on a buy-in amount and determine how the winnings would be split (equally or proportional to amount of money played, annual payout vs. cash option, etc.).

• Put the agreement in writing and have all participants sign it. 

• Designate a "pool manager" who is responsible for purchasing the tickets and keeping them safe.

• Make photocopies of the purchased tickets and give a copy to each member of the group.

• Decide if the entire group would claim the ticket, should they win. (Not all winners need to be present as long as required proof of identification is provided for each person.)

• Decide what you will do in terms of publicity, if there is a big win. (Designate a member of the group to speak to media, bring the whole group to talk to media, remain anonymous, etc.) 

Copyright © 2014, The Baltimore Sun
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