How retirees gamed the lottery

Like they say, go big or go home.

In 2003, a retired Midwestern couple in their 60s chose the former by winning millions after discovering — and exploiting — a legal loophole in a lottery game sold across the United States.

They are Jerry and Marge Selbee of Evart, Michigan. Together with their friends and neighbors, they raked in cash for years playing a game called Winfall by figuring out exactly when buying up hordes of tickets would pay off. Their wild story is now getting the cinematic treatment in “Jerry and Marge Go Large,” starring Bryan Cranston and Annette Bening, respectively, which debuts on Paramount+ Friday.

Jerry, now a grandfather at 83, is the one who cracked the game, using his strong background in mathematics. At one time, he’d worked a number-crunching role at Kellogg’s cereal headquarters in Battle Creek.

He would go on to own a corner store with his wife Marge, 84, one that had a lottery machine in it for years.

When it came time to enter the golden years, Jerry told The Post he started spinning the adventure partly because of boredom.

“It gave us something to do every six weeks or so that was completely different,” Jerry Selbee said. “Being retired, you can only do so much camping, picking rocks, which was a hobby of ours, and things like that.”

No jackpot, no problem

Jerry realized that Winfall had a pretty significant loophole. In Michigan, the game’s jackpot would “roll down” each week if no one won, expanding the prize winnings. This happened until it capped out at $5 million. At that point, if no one hit all six numbers on their ticket, the prize would be allocated to a handful of lesser winners, who matched a majority of the winning digits.

This was where Jerry saw an opening. In 2003, he was able to figure out that, by the law of averages, roll-down weeks were a guaranteed victory if you bought enough tickets. In their case, they bought thousands at a time.

“It didn’t take me three minutes to figure the game out [as portrayed in the film]. I had to do a little bit of research on the risk to reward analysis … I decided I could play the game and, as long as nobody won, other than me, it would be profitable,” Selbee said.

But at first, it took some trial and error, according to the mathematician.

“My first play, I played $2,200 … but I lost $50 on that play. So that [showed me] to compensate for the variance between the mathematical and the probability of getting more or less,” he said.

Selbee figured out that the trick was to bet more. The second time around, he put down $3,600 and won back $6,300.

“I knew I was on the track … my third play, which is in the movie, was $8,000 and I got back $15,700. So I knew that the system worked.”

Selbee’s uncanny strategy was even mind-blowing for some of the film’s cast.

“Once you really look at it, it really is a numbers game where if you have enough numbers, you can make sure that you win enough that it takes care of your investment,” Larry Wilmore, who plays Steve, the Selbee’s accountant in the film, told The Post.

“The fact that [Jerry and Marge] figured that out is fascinating,” Wilmore said. “What made them think that there was something soft in the middle there?”

Even better for the Selbees: The small ball strategy of winning little on many, many tickets — while mathematically rigged — was perfectly law-abiding. Just in case, Jerry said he started a corporation to give them some extra “legal protection.”

They started G S Investment Strategies, a group involving 32 people, 20 of whom were their relatives, according to a report from the Massachusetts Inspector General. They, along with friends of the Selbees, kicked in their own funds and then divvied up the payouts, he said.

“Each share of the corporation was $500. I had some people that would play 100 shares, I had some people that played 80 shares, some people played, like my grandchildren, one or two shares. Maybe three.”

Hittin’ the road

The strategy worked until 2005, when Michigan discontinued Winfall. A relative of the couple told them that Massachusetts had a nearly identical game called Cash Winfall, so Jerry started crunching the numbers right away and found it to be an even bigger winner, due to the Bay State’s lower $2 million cap.

Selbee said he found a 92.8% chance nobody would hit big.

So, Jerry and Marge began making routine trips from Michigan to Massachusetts on roll-down weeks. They deliberately visited small towns with the intention of keeping a low profile.

“They found two stores in the Pioneer Valley that met their needs … The owners became members of G S Investment Strategies,” the report noted.

Their first attempt won the group a 45% profit on 60,000 tickets that equated to a $120,000 bet, the report indicated. For years to come, they raked in money, investing up to $720,000 at a time.

“In Massachusetts, we averaged 28% to 32% profit each time we played,” Selbee said. “We lost money once,” in 2008, he recalls, when someone actually won the jackpot, preempting the roll down.

But there was still another cost to winning that the Selbees had to deal with on each trip.

“This process — visually inspecting approximately 60,000 paper betting slips, each with five panels of six-number bets printed on them — took days,” the report noted. The Selbees “would cull the winning tickets while still in Massachusetts and then drive the losing tickets back to Michigan where they would sort through the losing tickets again because they invariably missed some winners.”

For Selbee, though, “it didn’t seem like work” because it was time together with Marge.

“We did spend 11 to 14 nights at the motel in South Deerfield and it was something we looked forward to,” he said. “It was something different and it was profitable and it was able to help our family and help our friends out with a little financial boost.”

Due to the high earnings, G S Investment Strategies was audited on multiple occasions by the IRS and Massachusetts state agencies. So Jerry kept every losing ticket stored in his home, just in case.

It also caught the attention of the Boston Globe, who began tracking their fortunes.

The downfall of Winfall

The Selbees weren’t the only ones to discover the game’s loophole.

Dr. Ying Zhang, a Boston University medical school graduate, created his own system to win in 2003. Another collegiate duo, James Harvey and Yuran Lu of MIT, also got their campus friends to invest in a similar style — they formed Random Strategies Investments LLC, named after their dorm.

In 2010, a cross-country rivalry emerged between the Selbees and the MIT crew, as both parties took away from the other’s winnings in Massachusetts.

Soon, the college kids found a way to re-rig the game.

“They single-handedly bought enough tickets to push the jackpot to $2 million, triggering a roll-down that no one else was expecting and that was never announced to bettors on the lottery website. As a result, the MIT group virtually monopolized the winnings from this drawing,” the report indicated.

Random’s controversial move — one which came under criticism by Selbee and had been investigated by the state lottery — was the beginning of the end for the Michigan couple’s legendary run.

In 2011, the Boston Globe put out a series of reports that explained the big-bet strategy to the public in addition to other noticed inconsistencies in the lottery game, prompting the Inspector General’s major report.

The lasting result was the re-retirement of the Selbees, who played their last Winfall in 2012 when the game was discontinued, he said.

“The lottery became really embarrassed, so they shut it down,” Selbee added.

“Everyone got paid off when Massachusetts terminated the game and everyone that was in the corporation, every member had a profit over the long run so they were essentially happy … We were disappointed the game was ended, but all good things come to an end sooner or later.”

Yet all these years later, Jerry and Marge are still tight-lipped on how large they really went.

“I’d rather not say [my net profit],” Selbee said with a laugh. “I’ll just say it was over a million.”

The true number was closer to $7.75 million, according to the Huffington Post.

And when all was said and done, the Selbees — along with several of their investors — remained in the town and still live there today, Jerry and officials from Evart confirmed.

“Life didn’t change at all. In fact, it slowed down because we didn’t have anything to do for that two weeks out of six,” Selbee said. “We continued to go to breakfast every day, we continued to have coffee with friends, I continued to play poker with my buddies and life was just back to normal.”