Math, not magic

The retirees who found a lottery game that paid more than it cost

Jerry and Marge Selbee didn't pick better numbers. They read the rules, found a drawing where the average ticket was worth more than its price, and bought a lot of tickets.

A store owner reads the fine print

Jerry and Marge Selbee ran a convenience store in Evart, Michigan, for about twenty years. Not long after they retired, Jerry noticed an ad for a state game called Winfall. Tickets were $1, and players chose six numbers from 1 to 49.

Most of it was an ordinary lottery. One rule was not. If the jackpot reached $5 million and nobody matched all six numbers, the jackpot didn't keep growing. It "rolled down," and the whole pot was split among the smaller prizes: players who matched three, four or five numbers. On those drawings, a small prize could pay several times its usual amount.

Why one rule changed everything

On a normal drawing, a lottery ticket is worth less than it costs. The state keeps a cut, so on average every dollar spent comes back as less than a dollar. That is true of every regular drawing of every lottery, and it is the point of PickLogic's jackpot calculator.

A roll-down drawing flips that. All the money that built up over weeks of sales gets paid out to small winners in a single drawing. Jerry worked out that if you bought enough tickets on a roll-down drawing, the smaller prizes alone would return more than you spent, as long as no one hit the jackpot first. Because the jackpot odds were so long, the chance of that happening on any one drawing was small.

Testing it small, then scaling up

Jerry started cautiously, according to later accounts. His first roll-down bet was about $2,200, and he lost roughly $50. The second, about $3,600, returned about $6,500. The third, about $8,000, returned roughly double. After that, the bets grew into the hundreds of thousands of dollars.

The couple formed a company, GS Investment Strategies LLC, and sold shares to family and friends. When Michigan ended Winfall in 2005, they turned to a similar game in Massachusetts, Cash WinFall, which rolled down when its jackpot hit $2 million. Jerry made long drives east to print tens of thousands of tickets at a time, and the group spent days sorting them by hand to find the winners.

They weren't alone. Other groups found the same flaw, including a team started by MIT students and a group of Boston-area scientists. In 2010, the MIT group bought enough tickets to push the jackpot to the threshold and set off a roll-down itself.

How it ended

In 2011, the Boston Globe reported how a handful of groups dominated roll-down drawings. The state treasurer asked the inspector general to investigate. His 2012 report found that lottery officials had known about the large buyers for years and had let them buy far more tickets than the rules allowed. It recommended no further action and found that regular players still had a fair chance to win. Massachusetts shut the game down in 2012, and the Selbees made their last play that January.

The money

Over about nine years, the Selbees' group reportedly grossed close to $27 million in winnings, shared among its investors. One report put the couple's profit at about $7.75 million before taxes; other accounts give different figures. The couple said they lived modestly and that beating the system was the fun of it. Their story became a 2022 film, Jerry & Marge Go Large.

What this means for Powerball and Mega Millions

Neither game has a roll-down. When nobody wins, the jackpot simply grows until somebody does. There is no special drawing where the prize money is forced out to smaller winners, so there is no drawing where buying lots of tickets reliably pays.

A very large jackpot can make the average ticket look better on paper. In practice, big jackpots sell more tickets, which raises the chance of splitting the prize, and taxes take a large bite. The calculator shows exactly where that line sits for the current jackpot.

Next: the MIT students who played the same Massachusetts game.