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Don’t let your big win turn into a nightmare

Recent media reports have demonstrated the problems that can arise when people purchase lottery tickets as a group and subsequently fall out with one of their fellow players. The recent news stories of a long running lottery syndicate that won $40 million in the NSW lotteries earlier this month is a case in point. The syndicate has since fallen into strife as one of the members alleges he was squeezed out.

The legal obligations of playing lotto with friends

Where friends or work colleagues contribute money to buy a lotto ticket, they are potentially forming a legally binding agreement; or a contract. The question will be what the terms of that agreement were and what obligations flow from it.

If a dispute arises on a winning ticket between members of the group, it may be left up to a Court to identify whether a contract was formed, what the terms of the contract were and whether there has been a breach of that contract. If the Court finds that there has been a breach, it has the discretion to award damages to the person that has been aggrieved.

Below are some practical tips that can help avoid a dispute.

Put it in writing

A good practice would be to set out some rules for the group in writing. It would be helpful to make sure you have evidence that all of the players in the group agree to those rules.

Clearly identify the terms of your agreement

Your agreement could set out the obligations for the payment of tickets and also what will happen if one of your tickets wins. Further questions to consider include whether all players will pay an equal cost to enter the competition, whether all winnings would be split evenly and whether it’s a requirement that all tickets are paid for in advance. Ultimately, it would be necessary for your agreement to cover the rules you want to be specific to your group.

Verbal agreements carry risks

If your agreement is not in writing, a Court can look at other evidence to determine the scope of any agreement. This can include evidence relating to any verbal agreement between the players and also the context of the relationship between the parties.

The difficulty with verbal agreements is that they can be imprecise and difficult to prove. Disputes about the terms of a verbal contact can end up in a ‘he-said-she-said’ scenario, which can make it hard to determine what was actually agreed.

If your group does end up winning in the lotto and you are concerned that you may not receive a payout you are entitled to; it’s important to act quickly and seek legal advice about your rights and options.

The contents of this blog post are considered accurate as at the date of publication. However the applicable laws may be subject to change, thereby affecting the accuracy of the article. The information contained in this blog post is of a general nature only and is not specific to anyone’s personal circumstances. Please seek legal advice before acting on any of the information contained in this post.

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