Many people who bet the lottery claim to have a system. It might be mathematical, astrological, or chaos theory…but there’s a strategy. Sadly, experts tell us that 99 times out of a 100, that’s just wishful thinking. In one exception to the rule, however, there’s a story worthy of Hollywood.
Jerry and Marge Selbee are a retired couple who made more than $26 million by strategically beating the lottery. Between 2003 and 2012, Jerry turned a little-known mathematical formula into a jackpot investment, which they used to transform the lives of their family and community.
Whenever we talk about people “beating the lottery” or “tricking the system,” it conjures up images of a modern-day Bonnie and Clyde wreaking havoc in Vegas.
This isn’t that story.
Jerry and Marge Selbee’s fascinating adventure is really the love story of heartland America.
The code cracker of Evart, Michigan
In many ways, Jerry and Marge Selbee are the most average middle-Americans imaginable. Young sweethearts who married while still in high school, they remained together through all the ups and downs of raising six children on a working man’s salary. Their home was modest, their town was small, and their hobby was camping.
Of the two things that truly set them apart, the first was Marge’s unconditional belief in her husband. Whatever his latest fascination, she always encouraged him to go for it.
The second was Jerry’s unique mathematical ability.
Despite having struggled early in life due to dyslexia, Jerry Selbee was known around his hometown of Evart, Michigan as a “math whiz.” Extraordinary statistical pattern analyst might be more accurate.
No matter what his day job was, Jerry consistently found patterns. His unique mind also tended to weigh risk versus likely reward.
At one point, Jerry flung himself wholeheartedly into buying rolls of change—at full value—before the bank could. He was looking for rare coins that might have gotten rolled up with ordinary pennies and quarters.
Most people would’ve considered the hobby too boring or too risky. But Jerry saw it as a worthwhile investment for two reasons:
- His pattern analysis told him it wasn’t a gamble, but a simple matter of buying enough coins to get over the threshold of probability, and,
- He wanted to engage his then sixteen-year-old son.
The coins netted Jerry about $6,000 in profit, and countless hours of one-on-one time with his boy.
The Selbee secret sauce
Early on, Jerry worked in a series of boring careers—like cereal packaging designer. To keep his mind active during those routine jobs, he attended college whenever and however he could, earning a laundry list of degrees.
By 1984, however, he seriously needed a new challenge.
So, Jerry and Marge did the math—Jerry style—and bought the local corner store. While Marge did the books and made friends with their regulars, Jerry used his pattern-spotting abilities to turn a tidy profit from cigarettes and candy, liquor and lottery tickets.
In fact, as the only lottery machine in town, that side hustle helped to pay for advanced university degrees for all six of the Selbee children.
Yet it wasn’t until after they’d sold the store that Jerry discovered a lottery that was actually worth investing in. During a routine visit to check in on the new owners, Jerry read the rules to a new state game called Winfall. More importantly, he read the details of a unique feature called the roll-down rule.
Workings of a lottery loophole
For about six weeks of drawings, the Winfall jackpot would increase, waiting for someone to turn up with a ticket that matched all six numbers. The roll-down loophole was a feature that kicked in if the pot reached $5 million with no winning ticket.
In that case, the jackpot would roll-down to boost the value of tickets with fewer matching numbers.
Jerry quickly calculated the law of probability against the value of those roll-down tickets. While a five-number match was highly profitable, it was extremely rare.
However, Jerry reasoned that if he bought a certain number of tickets, he was guaranteed at least one four-number match, and 18 or 19 tickets would contain 3-number matches.
Once the roll-down kicked in, a four-number ticket became worth $1,000, and a 3-number ticket was worth $50.
“Anyone could have done it…it was just simple math,” says Jerry.
Even so, Jerry suffered from imposter syndrome. If it was so obvious that he could figure it out in a few minutes — and verify it after only a couple days of research — then something must be wrong.
If at first you don’t succeed…
Jerry started small. His first bet was for $2,200 and netted a return of $2,150.
With a $50 loss, anyone else might’ve quickly backed off from a “wild theory.” However, Jerry knew that while the math was sound, even an investment with good odds isn’t a 100% guarantee.
He’d been unlucky enough to lose.
But he didn’t have to get “lucky” to win. And the odds of him getting that unlucky often were fairly slim, especially if he didn’t make the mistake of betting so little next time.
So, next he played $3,400, and made $6,300. A $2,900 profit.
This 60 Minutes video details exactly how Jerry and Marge Selbee cracked the lottery code to win over $26 million:
Working hard for luck
By the time Jerry broke down and confessed the “dark secret” of what he’d been doing with their hard-earned retirement fund to Marge, he had $15,700 to show for it.
Where other wives likely would’ve been understandably horrified that their husband was risking a lifetime of hard work and sacrifice gambling, Marge didn’t even have to do the equations herself. She believed in Jerry. She trusted his mind, his common sense, and a lifetime of smaller successes.
Instead of demanding that he hand over his checkbook, she told him to bet more. A lot more.
Jerry and Marge found their new game exciting. It gave them a reason to get out of the house and spend time together. They got a reasonable high off winning, and the money provided a layer of financial security that all their safe-and-sensible choices never had.
Yet they still bore little resemblance to typical gambling addicts. There was no glitz and glamor, and no crazy shopping sprees.
“We didn’t change our lifestyle a bit,” says Jerry.
Winning the lottery Jerry’s way meant the retired couple had to stand in front of the lottery machine in their old corner store, playing numbers 12 hours a day, four days at a time. Then, they would go home to sort the tickets into winning and losing tubs.
Finally, they’d re-check the loser tubs just to make sure they hadn’t missed a $50 winning ticket here or there.
The more, the richer
Quickly they discovered that Jerry had been right from the start. Winning the roll-down game required a lot of cash. Investing a few thousand had a marginal return, with increased odds of being unlucky.
However, if they bought $20,000 to $40,000 worth of lottery tickets, they could reduce the risks of losing. Even better, it would mean they often more than doubled their money.
The only problem: They didn’t have that much cash.
Rather than keeping their secret to themselves by borrowing to raise the capital, they asked their family and friends to join them.
Jerry and Marge saw it as a type of “coffee club,” not unlike any other retiree investment group. During the height of their winning streak, Jerry and Marge’s lottery pool, G.S. Investments, included their accountant, lawyers, state troopers, and a judge.
Sensible, or suspicious?
Even after Michigan shut down the Winfall game, the Selbees kept going. They discovered another game with the same roll-down feature in Massachusetts.
True to their humble roots, the Selbees made the 15-hour drive whenever the odds were right. They would stay in a quiet motel, spend hours on their feet playing the lottery machines, and then spend two weeks sorting their profits.
“Our first play [in Massachusetts] was $80,000; 40,000 tickets,” Jerry said of their strategy of slowly increasing their plays over the years.
“Our last play was $712,000. 366,000 tickets.”
Finally, their nine-year run of luck ran out. Not because they got greedy. But because the story broke—owing in part to a group of college students who started playing the same game with their own syndicate of players. The state of Massachusetts launched an investigation.
Massachusetts’ then Inspector General Greg Sullivan couldn’t find any evidence of illegal shenanigans—let alone organized crime—despite his best efforts.
“I was dumb-foundedly amazed that these math nerds, geniuses, had found a way —legally—to win a state lottery and make millions from it.”
Everything the Selbees had accomplished was above board. And the state itself made an estimated $120 million from the heavy action inspired by the two lottery pools. Yet Massachusetts still chose to shut their Winfall game down.
A good run, a better life
Since winning almost $27 million in the lottery ($8 million of it pure profit), the Selbees enjoy quiet fame. Their story has been immortalized in a truly sweet movie starring Bryan Cranston and Annette Bening, “Jerry and Marge Go Large.”
Following the movie, they’ve been interviewed by news organizations, who all wanted to know if their phenomenal success could be duplicated.
The sad answer is, probably not. Jerry and Marge say they’d play again if they could find a game with the right odds. They haven’t.
Several lotteries that used to allow roll-downs have changed their rules to prevent the Selbee strategy from continuing to work.
While they might miss their days of high-stakes gambling, Jerry and Marge came home with something much more precious than money. Timeless love. In Jerry’s words:
“I loved her just as much then, and now, as I did when I was 15.”
These days Jerry and Marge Selbee, now in their 80s, enjoy the proceeds of their investment. They have a remodeled house, and the satisfaction of knowing that their grandchildren and great-grandchildren can go to college.
Marge still cooks chicken pot pies for Jerry’s poker group.
That group, comprised of satisfied former members of G.S. Investments, plays with nickels and dimes. They all have grandkids who need a good education.