How to run a Lotto syndicate: safely

Joining a syndicate can increase your chances of winning, just make sure you keep a record of everything.
MICHAEL BRADLEY/FAIRFAX NZ

Joining a syndicate can increase your chances of winning, just make sure you keep a record of everything.

A group of colleagues in Sydney are continuing a court battle over the share of $40million (NZ$43 million). 

One guy says he's owed a share, another guy says he isn't. 

The dispute ended up in court because the man in charge of the syndicate didn't keep clear and consistent records. 

Sydney production supervisor Brendan King has taken his former colleague Robert Adams to court over a $40m Powerball win.
FAIRFAX NZ

Sydney production supervisor Brendan King has taken his former colleague Robert Adams to court over a $40m Powerball win.

So if you're in a syndicate or thinking of joining one, there are a few things you should do to avoid ruining friendships and hiring lawyers. 

READ MORE: Sydney syndicate embroiled in Lotto row  

First of all, what is a syndicate? 

A syndicate is when a group of people get together and pool their money to buy Lotto or Powerball tickets to increase their chances of winning. 

The odds of winning Lotto first division with a single 10-line ticket are around 1 in 3.8 million. Chuck in a Powerball and the odds increase to about 1 in 38 million. 

Or, you could pool that $6 with four other people, have 50 lines, and dramatically increase your chances of winning.  

But, as the late actor Channing Pollock said, "money is like whiskey: a certain quantity of it improves the condition, but too much brings about bestiality".

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Here are a few of the biggest syndicate fails that have brought out the bestiality.  

$40 million in Sydney

For years a group of factory workers in Sydney combined their money in the hopes of scoring a Lotto jackpot.  

But the syndicate is now embroiled in a legal battle after Brendon King, a weekly contributor to the group, claims he is owed a $2.7 million share of a $40 million Powerball win.

The organiser of the syndicate Robert Adams argues he started a one-off syndicate involving 14 people who made larger contributions to boost the chance of winning the major jackpot. He said King was not part of that group.

King's lawyer argues King had a right to be considered the 15th member of the winning syndicate, as he always thought there was only one group entering lottos in the factory and his weekly payment meant he was automatically included in entries.

The case hasn't been resolved yet. 

$16.6 million dollar runaway

Millionaire Gary Baron was accused of ripping off 14 former colleagues after he suddenly resigned a few days after three winning entries shared a $50 million first division prize.

A syndicate member was also hired by Tatts Group to deliver champagne to Baron shortly after the lottery win.

Baron, who was a friend to all in the group, collected $20 every week from the members and entered the Lotto draw online.

The 14 workers claim they are owed a share of AU$16.6 million (NZ$17.8 million) in a Powerball draw.

The legal battle took a twist when five more people came forward to claim their share of the money. Apparently the Powerball 14 had tried to keep the lawsuit secret and shut out others who could lay claim to the winnings.

Builder's $21.8m secret

A New Jersey builder, who won US$20m (NZ$21.8million) in 2009, tried to keep his winnings hidden from five colleagues in a work syndicate.

Americo Lopes quit his job, claiming he needed foot surgery, and started claiming unemployment benefits.

A jury found Lopes guilty of defrauding his colleagues, ordering him to pay them US$4m each.

Although no one in the group had signed a legal contract to share any jackpot, the court found the group had an oral contract.

How to avoid things getting nasty

Money can change people. So if you're in a syndicate, no matter how close you are to the people in the group, no matter how much you trust them, there are a few precautions you should take.

After all, court isn't fun - or free.

What does Lotto say? 

The lure of easy money can quickly undermine former bonds of friendship and trust.

The New Zealand Lotteries Commission site gives some advice. Their website says to "create your rules and ensure you keep them up to date" and to keep "accurate records" to ensure "fair and fun play". 

The site also provides team agreement and payment tracker sheets you can download. 

What do the lawyers say?

Law & Associates lawyer Debra Law said syndicates don't have to write up contracts but they should photocopy and distribute the ticket to members each week. 

"A little bit of clarity goes a long way," she said. 

"It's really a matter of keeping a good record and preferably writing on the ticket who it belongs to." 

Law said an oral agreement is legally binding but they are tricky to prove. 

"If you have a written agreement then you have something to put before the court but if it's an oral agreement you may have parties all asserting different terms and it's a matter of who the judge believes, really, as to what the terms of that are," Law said. 

There can also be issues if some people have been fronting up weekly contributions for years but one week they don't - and that's the week the group wins.

Legally, this can be a bit of a grey area and would be settled on a case by case basis. 

A few court cases have seen one person claim they bought the winning ticket on their own - separately from the syndicate.

That's all well and good, but to avoid a legal battle where everyone else claims you're lying, a smart idea is to tell the group you are purchasing a private ticket and to give each person a copy of the syndicate ticket so there is no confusion. 

 - Stuff

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