They Found a Lotto Loophole, Then Made Millions
Jerry and Marge Selbee had sold the convenience store they'd operated in Evart, Mich., for more than 15 years, but still stopped in on occasion to check in on the new owners.
On one morning in 2003, Jerry left with a brochure that ended up spurring an endeavor that would ultimately have the Selbees—described as frugal, "salt-of-the-earth" teetotalers—driving 12 hours to Massachusetts, buying hundreds of thousands of dollars of lottery tickets, spending more than a week of 10-hour days reviewing every one, and returning home much richer.
HuffPost's Highline has their story, which started with that pamphlet, which advertised a new state lottery game called Winfall. Players paid $1 a ticket and picked six numbers 1 to 49.
Those who got all six correct won a jackpot of at least $2 million, but the "roll-down" structure provided a loophole, Jerry realized.
If the jackpot exceeded $5 million, a roll-down was triggered, something that happened about every six weeks: On the next drawing, if no one guessed all six numbers right, the jackpot "rolled down" to winners who had two, three, four, or five of the numbers right.
And Jerry realized that on those occasions, the odds were in your favor, in that a $1 ticket was worth more than $1. And so he started buying tickets, and lots of them, for those roll-down jackpots, ultimately creating GS Investment Strategies LLC, which allowed 25 friends and family members to pool money to fund ticket buys as large as $720,000.
When the Michigan Lottery shut down the game, the Selbees began playing a similar one in Massachusetts. They ultimately made $7.75 million in profit before taxes over nine years.
Highline's full story explains the detailed workings of their playing, how a reporter's digging took down the game, and the MIT students who did something similar and "enraged" Jerry.
This article originally appeared on Newser: They Found a Lotto Loophole, Then Made Millions