People often call the lottery the "idiot tax," as in - if you’re stupid enough to think you can win millions for buying a ticket, you deserve to lose your cash.
But a retired couple from Michigan defied the odds to win millions of dollars in prizes over almost a decade. How did they do it? Just ask Jerry and Marge Selbee and they’ll tell you: they cheated.
The couple sat down with 60 Minutes this weekend to discuss how they "cracked the code" to earn $26 million by playing the lottery.
The story began in 2003, when Jerry, who has a degree in mathematics, identified a simple loophole in a Michigan Lottery game called Winfall.
The lottery game worked differently than big draws like the Mega Millions, because if no one had all six matching numbers, the grand prize would "roll down" to ticket holders with five, four, or three matching numbers.
What the Selbees realized before anyone else was that, during a "roll-down" draw, anyone who bought a huge number of tickets was due for a big pay day when they matched three or more numbers over and over again.
"It is actually just basic arithmetic," Jerry explained. "The only thing I found really remarkable is nobody else really seemed to grasp it."
The first time Jerry put his theory to the test, he spent $3,600 on tickets and won $6,300. The next time, he bet $8,000 and earned back almost twice as much.
The strategy was so simple that the Selbees, who managed a convenience store together until they retired in their 60s, were able to set up a company dedicated to helping friends and family members win the lottery too.
By the time the state cancelled Winfall in 2005, the pair had earned millions. But they weren’t ready to give up on their "cheating" ways just yet.
A similar came in Massachusetts, called Cash Winfall, could be exploited in just the same way, and the Selbees spent six years buying up tickets whenever a roll-down draw was announced.
The pair bought hundreds of thousands of tickets, and spent as much as 10 hours a day sorting through them for winners.
What would you do if you won the lottery? It's a question most of us have asked ourselves. If you're Michigan retirees Jerry and Marge Selbee, the answer is "I might get a new putter." https://t.co/bbcHQcPv4u pic.twitter.com/Iypi533r6j— 60 Minutes (@60Minutes) January 28, 2019
The retirees weren’t the only ones who clued in to the game’s simple trick, as a group of big spenders from MIT were also raking in money with the exploit.
But since buying tons of tickets is 100% legal, the state couldn’t do a thing to stop them. The Cash Winfall game was just shut down instead.
While taxes and expenses in their scheme left the Selbees with around $8 million before taxes, that was more than enough to renovate their home and share the wealth with their growing family.
And the Selbees revealed to 60 Minutes that they managed to make even more money out of their scheme, by selling the rights to their incredible story to Hollywood.
[H/T: 60 Minutes]