Unofficial Lotto Syndicates spin trouble

Work place lotto syndicates are a great way to increase the chances of winning the big jackpot, as you can buy more entries into the games!

Winnings are divided between the Syndicate members according to the contribution made by each member. This appears to be a harmless way of increasing the chance of winning.

However, there are pitfalls if members do not implement some structures within the syndicate.

Court Verdict

A recent decision of the Auckland District Court regarding a workplace dispute serves as a warning to members to put in place clear rules for the Syndicate.

The Syndicate in this case operated at a steel manufacturing plant. Its members entrusted the task of purchasing the tickets weekly for the Syndicate to Mr X.

Mr X was in the habit of purchasing his lotto tickets on his family’s behalf. He purchased a ticket with Powerball on behalf of his family.

The Powerball ticket entitled him to go into the draw to win the jackpot prize.

The Syndicate members decided to change the Lotto ticket (without Powerball) to a Lotto ticket (with Powerball) so that they could have a chance of winning the jackpot prize. The loose arrangements included the members sometimes paying in advance and sometimes in arrears.

The Syndicate did not keep a record of payments, no copies of the tickets were provided to members, and there was no or inadequate accounting for results.

Despite these, no one was unhappy with the arrangement and did not raise this as an issue with Mr X at any time.

On October 31, 2009, Mr X discovered that the Powerball ticket he had purchased for his family won a prize.

He had gone to Wellington with his wife as part of the New Zealand Lotteries Commission televised draw for that week. Mrs X spun the winning wheel and won a cash prize of $200,000.

Unfortunately for Mr X, the lure of easy money [for the Syndicate members] quickly undermined former bonds of friendship and trust.

The members of the Syndicate maintained that the winning ticket was a Syndicate ticket. They brought a claim against Mr X to recover what they claimed was their share of the winnings.

Mr X maintained the prize was that of his family.

The Syndicate members claimed that they moved to purchase a Power Ball ticket in August 2009 because the jackpot had reached $16 million.

Mr X disputed this and said the Syndicate members continued to purchase exactly the same tickets as before.

While at work, the Syndicate members harassed Mr X, who felt obliged to complain to the Police.

The issue for the Court was to determine whether the winning ticket was a Syndicate ticket or a ticket belonging to Mr X and his family.

The Lotteries Commission records showed that the only large jackpot prize of $16 million was in May 2009 and that not all the tickets purchased by Mr X were on behalf of the syndicate.

Based on the evidence from the Lotteries Commission, the Court ruled in favour of Mr X and determined that the claim brought against Mr X must fail because the Syndicate members had not established that the winning ticket was more likely than not the property of the Syndicate.

Regulation needed

The story of Mr X shows the need for of informal groups of lottery players to have a clear record of their weekly ticket numbers.

New Zealand Lotteries Commission provides for standard written agreements for Syndicates to prevent disputes. Entering into an Agreement is voluntary and is only for the use of the Syndicate members

The New Zealand Lotteries Commission also provides guidelines to Syndicates on its website

Lyndal Yaqub is an Associate at Law Associates and a member of its Civil Litigation and Employment Team based in Manukau. Phone: (09) 2625510


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