Couple works out way to game lottery system collecting $34m over nine years

A couple collected $34 million over nine years after figuring out a loophole in the lottery system.

Jerry Selbee, from Michigan in the US, said he was bored at work one day and started analysing the numbers and letters on cereal boxes for patterns.

After realising he could trace any cereal box to its packing location and date, he decided to pursue his love of numbers and enrolled in multiple mathematics courses.

In 2003, Jerry was 64 and retired, and during a trip to his regular convenience store he saw a brochure about a brand new lottery game called Winfall, the Huff Post reported.

He took the brochure home and studied it, realising the game listed the odds of winning certain amounts by choosing particular number combinations.

Mr Selbee noticed a huge flaw in this and started working around the system.

A couple grossed $34 million over nine years after figuring out a loophole in the lottery system. Photo: Getty

Winfall players paid $1 per ticket, and picked six numbers between one and 49. To win the jackpot you needed your numbers to match the six numbers drawn by the Michigan lottery.

But he noticed Winfall had a quirk unlike other lottery games - if no one won the jackpot and it climbed above $5 million there would be a 'roll-down'.

This meant that during the next draw, so long as there was no six-number winner, the jackpot flowed down to winners who guessed five of the numbers, then four, then three etc.

Mr Selbee worked out that during this week, with the right calculations, a player was likely to win more than he lost.

By correctly guessing three of the numbers, a player would win $50 instead of the normal $5, and four-number guesses paid $1000 instead of $100.

The first time he played, he spent $2,200 on 2,200 tickets, then sorted through them to work out his two, three and four-number matches. He won $2,150.

The next time, he spent $3,400 on tickets and won $6,300. His confidence up, during the next roll-down week he bet $8,000 and won $15,700.

He kept it secret from his wife Marge for weeks, but eventually let her in on his secret as his winnings were only growing.

“Oh, I knew it would work,” Marge later said about her reaction after she was told. “I knew it would work.”

The couple even started a company to fund it that had no inventory and sold nothing. The business's job was to play the lottery.

In May 2005 the Michigan Lottery shut down the particular game they were playing with no warning and replaced it with a different one.

Mr Selbee was upset, until he discovered that Massachusetts had introduced a very similar lottery game called Cash WinFall.

Over a period of nine years, across the two states, the couple made a gross amount of $27million (A$34 million), almost A$10m in profit, before the Boston Globe Spotlight team got a tip-off about the lotto loophole.

The Globe exposed the way the game was being exploited in a series of investigative reports. A group of MIT students were others to profit from the same technique the same technique.

The game was shut down in 2012, and the pair were vilified in the media, even though what they were doing was not illegal.

“If you figured it out and you could do this, would you do it?” Mr Selbee told the HuffPost. “I’m just asking. Would you?”

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