Beating the Lottery Odds - Part Three
A retired couple had found a math error in a lottery game, making hundreds of thousands of dollars out of it. Then it was shut down.
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In Part 2, retired couple Jerry and Marge Selbee formed a betting pool to ramp up the rewards from a lottery game with a math error. But the game was suddenly shut down by the Michigan Lottery.
A new opportunity
Jerry and Marge Selbee were very disappointed by the shutdown of the Michigan Lottery game, Winfall. It had given them a sense of purpose, and they loved it. Nevermind the hundreds of thousands of dollars they had won off it.
But the email from one of the members of the lottery group—asking Jerry whether a new game from the Massachusetts Lottery could be played—renewed his hope.
The game was called Cash WinFall. It had a few differences from the old game. Tickets cost $2 apiece instead of $1. The six numbers picked had to be from 1 to 46, not 49; the roll-down worked the same except that it rolled down when it hit $2 million, not $5 million.
It didn't take Jerry long to do the calculations and find that the odds were good, very good. The major problem was that lottery tickets had to be purchased in person, in Massachusetts. And the nearest point from Evart was over 1,100 km away, cutting through Canada. Added to this logistical problem was to find store owners that would allow him and Marge to spend entire days in their store printing lottery tickets.
But he decided the potential reward was much greater than the hassle of overcoming these obstacles. His contact in Massachusetts gave him the name of the owner of a store in the town of Sunderland, 80 km from the state's western border. Jerry drove there—he didn't want all the fuss with airports and flying. He covered the distance in 12 hours in his newly-purchased truck.
Massachusetts
Billy's Beverages, Sunderland, Massachusetts . Image: Wikimedia
Paul Mardas, the owner of Billy’s Beverages in Sunderland laughed when Jerry told him that he intended to buy about $100,000 in lottery tickets—for starters. But he accepted Jerry's deal of giving him a stake in GS Investment Strategies LLC, the Selbees' betting pool company.
The volume of tickets meant that Jerry and Marge would have to split the work. They needed a second lottery machine and found it in South Deerfield, at a diner aptly named Jerry's Place. The owner was happy to accept the same deal.
Jerry's Place, South Deerfield, Massachusetts . Image: TripAdvisor
The Selbees would travel to South Deerfield a week before the roll-down, booking into a local hotel. Each day they would work from 5:30 am (before opening time) through to 6 pm, printing as many tickets as possible. Marge would work in Billy’s Beverages and Jerry in Jerry's Place. After printing the tickets they would stack them into $5,000 bundles thrown into duffel bags.
After the drawing they would go through the same routine they had with the previous game, piling the tickets in heaps of winning tickets by value. Except, this time it required a lot more work. Sorting through $70,000 in tickets (twice, to check) took a full 10 days working 10 hours a day without a break. (As the number of tickets increased so did the amount of work.) Once this was done, they would claim their winnings and head back home with their cash and the tens of thousands of losing tickets (as an IRS paper trail).
Cashing in
Marge and Jerry spent $120,000 (60,000 lottery tickets) on their first Cash WinFall play in August 2005. That was increased to 312,000 tickets in the next drawing and ultimately buying 360,000 tickets—a $720,000 bet on a single drawing.
Their activities had not seemed to attract the attention of the lottery regulators. They were knowingly infringing some minor rules, such as operating the lottery machine themselves instead of by the owner and playing outside of normal business hours. Their operation was observed by the authorities, at least once each in Billy’s Beverages and Jerry’s Place, but no irregularities were found.
By 2009 they had grossed $20 million in winnings making a profit of $5 million. But their wealth didn't change their frugal lifestyle in any way. It did allow them to prop up friends and family affected by the recession. Their betting group thrived and used their money to pay down debts, educate children, build up saving and even go on luxury cruises.
Competition
Then one day a roll-down drawing happened when no roll-down was expected, so Marge and Jerry missed out on it. This mystified Jerry. He watched things very carefully and this was totally out of the ordinary.
Jerry had heard talk of other groups playing the roll-down in much the same way as he and Marge did. Could they be causing it? It enraged Jerry to think someone else was intentionally taking them out of the game.
But Jerry wasn't done yet—he had another puzzle to solve.
This will be continued in Part Four
Previous posts in this series: Part 1, Part 2
References:
Huffington Post: Jerry and Marge Go Large
news.com.au: ‘I just multiplied it out’: How retired Kellogg’s worker Jerry Selbee cracked the lotto code and made millions
Also posted on Weku, @tim-beck-2019-01-06