The Michigan Retirees Who Broke the Lottery

Evart — The odds of winning the lottery are famously terrible.

For games like Powerball, you're more likely to be struck by lightning, get attacked by a shark, or become a movie star than you are to hit the jackpot.

But what if there was a way to make the odds work in your favor? Turns out there was, and it was a retired couple from a small town in the middle of nowhere Michigan that figured the whole thing out.

Jerry and Marge Selbee are high school sweethearts who spent decades living a quiet life in Evart, a small Northern Michigan town of fewer than 2,000 residents, where nothing really ever happens. Together they raised six children and spent 17 years running a local convenience store on Main Street, where Jerry handled the liquor and cigarettes while Marge kept the books and made sandwiches.

In 2003, the couple sold the store and retired, unaware that their lives were about to change forever.

It all began when Jerry walked into a corner store and noticed a brochure for a new Michigan lottery game called "Winfall."

Unlike traditional lottery games, Winfall included a feature known as a "rolldown." If the jackpot reached a certain amount and nobody won the grand prize, the money would be distributed among smaller prize tiers instead.

Jerry, who happened to have a degree in mathematics, read the brochure and immediately noticed something nobody else had seemed to.

He figured out that during these rolldown drawings, the expected payout on a large enough batch of tickets was actually greater than the cost of buying them.

If you're struggling to follow along, don't worry—it confuses me too. But essentially, Jerry had discovered a mathematical loophole hidden inside the lottery.

To test his theory, Jerry started by purchasing $3,600 worth of tickets and won roughly $6,300. Then he tried again with $8,000 and nearly doubled his money.

His theory was working. He had outsmarted the lottery.

Soon, the Selbees began spending thousands, and eventually hundreds of thousands of dollars during rolldown weeks, and each time the strategy continued to work.

Before long, they got friends and family members in on it too.

Jerry created a company called GS Investment Strategies and sold shares to local investors. Farmers, business owners, attorneys, and other members of the Evart community pooled their money into the operation.

Some residents thought the group was crazy, but others trusted the math. By 2005, roughly 25 people had joined.

Then, just as the operation was really taking off, Michigan unexpectedly discontinued Winfall.

After building an entire investment group around the strategy, it looked like the Selbees' lottery winnings had come to an end.

That was until one member of the group discovered a nearly identical game called "Cash WinFall" operating out of Massachusetts.

After a little research, Jerry realized the same loophole existed there too, and the Selbees got right back to where they left off.

Whenever a rolldown drawing approached, they drove roughly 900 miles to Massachusetts. They'd purchased hundreds of thousands of dollars worth of tickets and then spent days sorting them by hand in cheap hotel rooms. While this new commute was definitely less convenient than buying tickets in Michigan, the profits made the trip worthwhile every time.

At times, they were spending more than $600,000 per drawing. Millions of losing tickets ended up stored in large plastic tubs inside their barns, in case auditors ever wanted to inspect them.

What started as a random fling in retirement had somehow turned into a new full-time job.

Over the next nine years, the Selbees and their investment group won more than $26 million through the lottery system, generating nearly $8 million in profit before taxes.

All of that success obviously started drawing attention, and in 2011, reporters from The Boston Globe uncovered unusually large lottery purchases connected to two groups: the Selbees from Michigan and a separate group of MIT students who had independently discovered the same mathematical advantage.

All of the attention surrounding the story eventually led to an official investigation.

Authorities suspected there must be some sort of fraud, corruption, or organized scheme going on behind all the winnings. But investigators found nothing illegal.

The Selbees weren't criminals. They weren't cheating the lottery. They were simply two smart people who had discovered a flaw in the system before anyone else.

Eventually, the lottery discontinued the game, bringing the whole operation to an end.

Back in Evart, life largely returned to normal. The Selbees used their winnings to renovate their home, help pay for the education of their children, grandchildren, and great-grandchildren, and finally enjoy a peaceful retirement.

At the time, the story took the country by storm, and in 2022, Paramount+ released “Jerry & Marge Go Large,” a feature film starring Bryan Cranston and Annette Bening.

You'll probably never beat the lottery yourself, but if you happen to have a math degree and an eye for loopholes, your chances could get a whole lot better.