According to the North American Association of State and Provincial Lotteries, Americans spent more than $113 billion on state lotteries in 2023, or about $437 per adult. That’s more than people spent on concerts, sporting events and movie tickets.
However, there are some fascinating stories of people who exploit the lottery system. One such story is that of Jerry and Marge Selbee, a retired couple from Michigan who won an incredible $26 million by finding a loophole in the lottery in just a few minutes.
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In a interviewJerry Selbee told 60 Minutes that he had always had “math in his head.” With a bachelor’s degree in the field, he quickly spotted something interesting in a new lottery game called Winfall. Unlike other lottery games where the jackpot increases until someone wins big, this one had a special reset feature. If the jackpot reached $5 million and no one won, the money was given to the small winners, making their winnings much larger.
Jerry realized that he could almost be guaranteed to win by buying a certain number of tickets. He did some quick math and calculated that for every $1,100 he spent, he would get back about $1,900. To Jerry, this was all basic math and he couldn’t believe no one else had figured it out.
Jerry started small by buying $3,600 worth of tickets and making $6,300. He then invested $8,000 and nearly doubled his money. At this point, he shared his strategy with his wife, Marge, and together they decided to go all in. They created a company, GS Investment Strategies, and invited their family and friends to join them, selling shares for $500 each.
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The couple played the Winfall game 12 times in Michigan, winning millions. When Michigan shut down the game, they moved to Massachusetts, where a similar game called Cash Winfall was available. For six years, they drove 900 miles to Massachusetts every time there was a roll-down, buying hundreds of thousands of tickets and sorting through them for hours in a modest hotel room.
Their strategy was simple but effective. They invested more than $600,000 per game seven times a year, for a total of $4.2 million per year. Despite the long commute and hours of work, Jerry and Marge found it fun and satisfying. They enjoyed the challenge and the success it brought them and their investors, saying, “It’s fun to do it. It’s a blast and it’s a satisfaction that we’ve achieved something that’s worth it, not only for us personally, but also for our friends and family.”
In case they were subject to a federal physical inspection, the couple kept $18 million worth of lost bills in more than 60 plastic bins in their barn.
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In 2011, the Boston Globe received a tip and investigated the high volume of ticket sales in Massachusetts. The state shut down the game, but an investigation found no wrongdoing. The Selbees had legally exploited a loopholebenefiting themselves and the state, earning $120 million from gambling.
Their business generated more than $26 million in sales, with nearly $8 million in pre-tax profit. They used their profits to renovate their home and fund the education of their six children, 14 grandchildren and 10 great-grandchildren.
Today, they lead a quieter life, reminiscing about their remarkable journey and playing small-stakes poker with friends. However, their peace has been disrupted by the release of a 2022 film called “Jerry & Marge Go Large,” starring Bryan Cranston, Annette Benning and Rainn Wilson.
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But the Selbees weren’t the only ones to spot the loophole. Scott Allen of the Globe said, “Smart people figured out that if I buy enough tickets, I’m always going to win. I’m going to get back more than I spent.”
While Jerry and Marge Selbee were making millions from their lottery strategy, a group of students at the Massachusetts Institute of Technology (MIT) discovered the same flaw and formed a syndicate to exploit it. The syndicate was created by a student who discovered the Massachusetts Cash Winfall game’s raffle feature during an independent study project.
He began pooling his money with some of his colleagues and buying tickets in bulk, just like the Selbees. Over the course of seven years, the MIT group bet between $17 million and $18 million on Cash Winfall, raking in at least $3.5 million in profits. As with the Selbees, no irregularities were ever found by authorities.
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