The Sure Thing

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The Sure Thing

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Nearly 20 years ago, Jerry Selbee had a revelation. 

He figured out how to win the lottery. Not just once, either. For the next nine years, Selbee would collect millions of dollars by winning dozens of times.

It all started in 2003, when the retired Michigan resident saw a brochure for a new lottery game called “Winfall”. Within three minutes, Selbee discovered a loophole in how it paid out. While reading the fine print, he realized that if the jackpot reached US$5 million, and nobody matched all six numbers, all of the money would “roll down” to the lower prize winners, greatly increasing the odds of winning for those who matched three, four or five numbers. “My first play, I played US$2,200, but I lost $50 on that play,” he told the New York Post. “So that showed me to compensate for the variance between the mathematical and the probability of getting more of less.” 

Selbee quickly discovered that he would have better odds if he bet more, so he wagered US$3,600 and won US$6,300. “I knew I was on the track,” he told the NY Post. “My third play was $8,000 and I got back US$15,700. So I knew that the system worked.”

Selbee and his wife Marge decided to invest more money into the Winfall lottery – and won even more. Convinced that they were on to a sure thing, they formed G.S. Investment Strategies, and invited various friends and family members to contribute their own funds so they could create a pool and divvy up the winnings. Members included a bank vice president, three state troopers and a factory plant manager. “It helped put three kids through school and one through law school,” friend and fellow member Dave Huff explained to the US TV show 60 Minutes. “So it was quite beneficial to me.”

All told, the group played Winfall 12 times and won millions. There were also US$18 million worth of losing receipts, which the Selbees meticulously logged, tracked and stored in an ever growing warehouse. A few years after it started though, Michigan stopped the Winfall game, citing a lack of sales. The party was over.

Actors Bryan Cranston and Annette Benning with the Selbees.

That is, until a relative tipped them off about a similar game in Massachusetts called Cash Winfall. Jerry did some calculations and realized that he and his fellow investors could win even more money, determining that there was a 92.8% chance that nobody would hit the jackpot. Once they won again on their substantial first bet, the Selbees began to pull together as much as US$720,000 each time they made the drive to Massachusetts. This meant substantial travel time and days spent counting tens of thousands of betting slips. But it also meant an almost guaranteed income stream that was totally legal. “In Massachusetts, we averaged 28% to 32% profit each time we played,” Selbee told the NY Post. “We lost money once,” he recalls, when someone actually won the jackpot.

However, it just so happens that a group of MIT students also discovered the loophole in the Massachusetts lottery game. James Harvey and Yuran Lu of MIT, formed their own investment company and convinced campus friends to invest. At one point they bought so many tickets that an unexpected rolldown occurred, enabling them to completely monopolize the winnings of one particular game.

This attracted the attention of both the Boston Globe newspaper and the State Attorney’s office, who decided to separately investigate to see if there was any illegal activity taking place. The Massachusetts state treasurer even shut the Cash Winfall game down and demanded an investigation. “When we got involved, the public perception was there must be some kind of organized crime or public corruption to explain how millions of dollars are being bet by syndicates on state lottery tickets,” Greg Sullivan, the then-state Inspector General, told 60 Minutes. “We really looked at this, looking for corruption. We used subpoenas, we looked at documents, we interviewed dozens of people to look at this in detail with a hypothesis that something illegal had happened. And the state got very rich. The state made US$120 million.”

Yes, the state won, the MIT students won and the Selbees won. And no illegal activity was ever discovered, though the state did decide to create a new lottery game with a different system. The money tree was over. Though the Selbees decline to discuss how much money they actually won, the Huffington Post estimates their lottery winnings at US$7.75 million based on their overall US$26 million gross.

Yet Jerry, 84, and Marge, 83, claim that they didn’t spend their winnings on extravagances. There were no cruises or fancy cars. Instead, the doting grandparents still live in their same house in Evart, Michigan, population 1,403. “Life didn’t change at all,” says Jerry. “In fact, it slowed down because we didn’t have anything to do for that two weeks out of six. We continued to go to breakfast every day, we continued to have coffee with friends. I continued to play poker with my buddies and life was just back to normal.”

Even so, more than a decade after their lottery adventure ended, the Selbees will face more public scrutiny – or perhaps just appreciative amazement, since their story has just been made into a Hollywood film. Bryan Cranston and Annette Bening star as the couple in the movie  “Jerry and Marge Go Large”, which has just been released in theaters this summer.

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