ON "60 MINUTES": THIS SMALL-TOWN MICHIGAN COUPLE FIGURED OUT HOW TO WIN MILLIONS LEGALLY IN STATE LOTTERIES

"Just Basic Arithmetic" Says Jerry Selbee of the Loophole He Discovered

Why didn't more people see this? "It's just basic arithmetic," says Jerry Selbee of the simple way he figured out how to make millions playing certain state lottery games. Selbee and his wife, Marge, tell their amazing story to Jon Wertheim on the next edition of 60 MINUTES Sunday, Jan. 27 (7:00-8:00 PM, ET/PT) on the CBS Television Network.

It all started when Jerry, who has an undergraduate degree in math and a healthy curiosity, walked into his local corner store in Evart, Mich., and read the rules of a new state lottery game called Cash Winfall. By the time he left the store, "I knew what the potential might be... [in] three minutes, I found a special feature," he tells Wertheim.

The special feature was a unique "roll-down" rule in the game. If the jackpot reached $5 million and no one matched all six numbers, all the money rolled down to the lower tier prize winners - dramatically boosting the payments of those who matched five, four, or three numbers. When a roll-down was in effect, the odds of winning money improved for all players, and Jerry saw an opportunity to win a lot of cash by buying a lot of tickets.

He first tested his theory by buying $3,600 worth of tickets and winning $6,300. Soon he was doubling his money. When he told his wife, Marge, what he had discovered, "No, I wasn't surprised," she says. "Because as long as nobody wins and you win money, you could see the numbers."

Before long, the retired couple was playing Winfall every time the roll-down kicked in and betting hundreds of thousands of dollars. They formed a corporation and invited friends and family to join their lottery syndicate. Looking in one of their many record books, Jerry says, "Here's one that was pretty successful. We played $515,000, and we got back $853,000."

Michigan eventually shut down the Winfall game, but Jerry learned Massachusetts had a similar game called Cash Winfall. So the high rollers continued betting for six more years until the Boston Globe's famed investigative reporters caught wind of the story and discovered the Selbees weren't the only ones who had figured out the Winfall loophole. A group of MIT students also had done the math, formed their own betting syndicate, and won millions over the course of seven years.

The Boston Globe articles caused an uproar, and the Massachusetts state inspector general, Greg Sullivan, launched an investigation, issuing subpoenas and examining records. He tells Wertheim he expected to find organized crime or corruption within the system, but he found nothing of the sort. It turns out the betting was totally legal. "I wasn't surprised, I was dumbfoundedly amazed that these math nerd geniuses had found a way legally to win a state lottery and make millions from it."

Jerry still wonders why he was one of the few who discovered this loophole. He says his system was just probability conforming to probability. But he has a theory. "People are conditioned to luck when it comes to lottery, and so that's all they think about."

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