How to Win the Lottery: Couple Profited From Quirk in Massachusetts Cash WinFall Game

Aug. 3, 2011 — -- It was great while it lasted, for the few who knew the trick and had the money to take advantage of it.

Gerald and Marjorie Selbee, who used to own a convenience store in Evart, Mich., were in the exclusive group of people who figured out how to win at a lottery game in Massachusetts, but they say their run is over.

"We have made a profit," said Gerald Selbee today in a telephone interview with ABC News. "It's been fine. It hasn't changed our lifestyle any."

Since 2004, Massachusetts Lottery has run a game called Cash WinFall, which had a quirk. Every three months or so, if the WinFall jackpot exceeded $2 million but nobody picked all six of the randomly-chosen winning numbers, the money in the jackpot pool would go to people who picked only four or five correct numbers.

The Massachusetts Lottery said the odds of picking all six numbers were 1 in 9,366,819. But during so-called "rolldown weeks," someone who picked five numbers could win as much as $135,000 -- and the odds of success were 1 in 39,000.

If you bought enough tickets, said a state official who asked not to be quoted by name, the odds of making a profit could be very high.

"The math involved is sixth-grade. It's not a great science," said Gerald Selbee. They could make six-figure profits from a good round, said the lottery commission -- but they could also lose.

"We always had an 11 percent chance of losing substantially," Selbee said. "Between 60 and 80 percent of what we spent." He said they set up a company with 32 partners to pool their money, and generally ran a profit of one or two percent, but wouldn't say how much money they invested.

The Selbees, both 73, periodically came to western Massachusetts to buy tickets in bulk, often by the hundreds of thousands. They even got themselves temporary jobs at local stores -- he in the town of South Deerfield, she in nearby Sunderland -- so that they could systematically sell themselves tickets without troubling store clerks.

It would be in a store's interest to have them, said officials; a store gets a 5 percent commission on every ticket sold, and a 1 percent bonus if it sells a winning ticket.

Since July 1, the Lottery Commission said, the Selbees' company "made 187 prize claims totaling $206,649."

"They did nothing nefarious or illegal, and it's unfortunate that they've been portrayed otherwise," said Beth Bresneham, the marketing director for the Massachusetts Lottery. But she added, "There's a perception that people with more money do better." And as word spread, the lottery faced an image crisis. In May, during a rolldown week, there were 1,605 prizes awarded -- and 1,105 of them went to just three companies, like the one set up by the Selbees, that bought lottery tickets in volume.

"The integrity of the lottery is our priority," Bresnehan said. "It's critical to our success. We want people to know that when they play, they have the same chance of winning."

State Treasurer Steven Grossman has now announced that stores will be limited to selling $5,000 worth of WinFall tickets per day, so that big-volume buyers would have to go from store to store for lottery tickets. And the two stores the Selbees used have been suspended from selling lottery tickets for now.

"I'm hoping that, yes, my license will be restored because I've got people that want to buy their tickets here," Paul Mardas, owner of the liquor store in Sunderland, said in an interview with ABC affiliate WGGB-TV.

The WinFall game has already been fading in popularity, said the Lottery Commission, and will be ended next year.

What does that mean for Gerald Selbee and his wife? "It will terminate our play," he said.