Lottery Syndicate Agreement
What is a lottery syndicate agreement?
A syndicate is a collection of people, businesses or entities who organise themselves for a common purpose. A lottery syndicate agreement is where people group together and enter lottery draws to maximise the chances of winning. The situations in which people get together to form lottery syndicates necessarily mean that members will be friends, colleagues or associates. It is important to follow the correct procedures in setting up a syndicate so that the situation does not turn sour upon a win. Failing to do so can lead to the breakup of friendships, the end of working relationships and the loss of money in some cases.
Why have one?
A formal lottery syndicate agreement puts a set of rules or regulations in place so that everyone knows where they stand. It can clearly define those who are members and their entitlement to any win. It can also be beneficial for tax purposes, meaning that all members need not necessarily pay tax on any win.
Those who sign up to a lottery syndicate are entering into a legally binding contract. The terms and conditions of the agreement bind each member of it, which can be referred back to if any disagreement occurs at a later stage. If every member has read the terms and conditions or rules of the agreement then, in theory, they are less likely to disagree with each other anyway. If the rules need to be amended in any way, shape or form this can be done providing that all members are aware of such a change and agree to it.
What to include
Within the lottery syndicate agreement the following should be contained:
- The name of each member;
- The numbers they have selected to be entered;
- The amount that each member agrees to pay; and
- The subsequent share of the winnings that each member is entitled to.
How to distribute winnings
The way the winnings are distributed is entirely up to the members of the syndicate. They may agree to split the winnings amongst them in equal shares, but alternatively the winnings could be partially donated to charity, paid into a trust fund or contributed towards future ticket purchases. The important thing is for the exact method for distributing the winnings to be clearly expressed in the lottery syndicate agreement so that no member is in the dark about what their entitlement is.
State which draw
It is important to agree end stipulate which draws the syndicate is to be entered for. Firstly which competition, be a local raffle, the National Lottery or Euromillions. Secondly, if the competition is run on various days, the ones which the syndicate is to be entered for (e.g. every Saturday’s National Lottery).
If a member has not paid their stake and the syndicate wins then major disputes can be generated amongst its members. It is best to stipulate in the agreement how and when each member should make their payments and the consequences of failing to pay. It may be decided that anyone who fails to pay their stake before a draw takes place is excluded from a share of any winnings resulting from that draw.
Who is in charge?
It might be useful to appoint someone to manage the syndicate, their name and duties can be provided in the agreement. They can then become responsible for the essential tasks of the syndicate including checking that members have paid their stakes, collecting and distributing any winnings and updating the agreement itself. They should add new members to the agreement and remove those who no longer want to be part of it.
How to draw up agreement
Syndicates are free to draw up their own agreement; the above advice may be useful in doing so. Alternatively, a form can also be downloaded from the National Lottery website which can be filled out by the syndicate members.