March 6, 2021
|Lottery News, Lottery Winners

Mathematician who hacked the lottery

Lotto Hacker – He cracked the lottery code but how?

Lesezeit: 4 Minutes

Marge Selbee, the so called "Lotto Hacker", made herself coffee on a Saturday morning while her husband Jerry drew numbers and formulas on a notepad. This was nothing out of the ordinary, as the old man liked to dabble in mathematics. He even holds a master's degree in it. But then he looked up and said, "I think I cracked the Michigan State Lottery."

Lottery cracked – legally and with a lot of brains

The lottery seems to be the epitome of a game of chance. The elderly mathematician Jerry Selbee has proven that this is not the case. He cracked the Michigan State Lottery legally thanks to a simple algebraic solution. And that’s how it happened.

Lotto Hacker – The man and mathematics

Marge Selbee, the so called “Lotto Hacker”, made herself coffee on a Saturday morning while her husband Jerry drew numbers and formulas on a notepad. This was nothing out of the ordinary, as the old man liked to dabble in mathematics. He even holds a master’s degree in it. But then he looked up and said, “I think I cracked the Michigan State Lottery.” Marge laughed and didn’t think much of it. Inside Jerry, however, a $26 million lottery secret was already slumbering. He hadn’t used it yet, but that was yet to come.

Jerry had devoted himself entirely to mathematics. He had numerous jobs after college. At some point, he was driven to start his own business, and he and Marge opened a grocery store in Evart, Michigan. They didn’t sell any particular merchandise, but they still made more profits than others. Why? Jerry analyzed prices from suppliers. Then he identified margins and resold supplies at a profit to small retailers. Jerry maximized everything. Eventually, they enriched their business through one of the few lottery machines in Evart County. People flocked in from afar to make the dream of winning the lottery a reality. The Selbees were quite different. They never spent a dollar on lottery tickets, but marveled at people’s willingness to play. The arrival of a special game changed things.

A new game opens up new opportunities

In 2003, an unusual lottery game came out: Winfall. Its principle was simple: “Pick six numbers between 1 and 49, and if you guessed two, three, four or five, you get a prize. If you get six right, you win at least $2 million.” If no one won in a week, the maximum prize increased. The upper limit of that was five million U.S. dollars. Then a rolldown occurred. That means the winnings were distributed to the lower winning tiers. The state lottery made a mistake in the process. They listed the odds associated with each combination of numbers. Jerry analyzed these odds and the timing of these rolldowns. He realized that statistically, a single dollar lottery ticket was worth more than a dollar in those last few weeks.

Gap recognized and exploited

Jerry knew he had to make big bets to create a defensible margin of profit. On his first try, he bought $2,000 worth of tickets. For a man who had never gambled, that was an uncomfortably large sum. In the end, he lost $50. He analyzed the loss and realized he needed to bet more. Three months later, the next rolldown was announced. He bought tickets for $8,000. His profit now totaled $15,700. Thus, he won $7,700. That wasn’t bad already, but there was more to come. Every week he increased his bet. Sometimes he spent hundreds of thousands of dollars in one week. However, buying the lottery tickets was cumbersome. It couldn’t be done online; the Selbees had to do it in person. Once a rolldown occurred, he and his wife would split into two cars and drive to countless stores across the state. No one objected. No one wondered.

A decade of playing the lottery

The Selbees continued their lottery mission for a full decade without the state noticing. A group of students at MIT eventually noticed the flaw in the math of this lottery game, too, and they started buying tickets. Then the lottery company became aware of it and they took the game off the schedule. By that time, Jerry had already won more than $26 million from the state lottery. After expenses, they made a profit of more than $8 million. Impressive. And what makes this story even better? The couple themselves. By the time lottery playing had its end, the Selbees were already in their 70s. The money didn’t change them one bit. They only renovated their house from the winnings. The remaining millions went to their 14 grandchildren’s college fund.

No law was ever broken. Jerry didn’t manipulate anything. Still, the big lottery win was not the result of luck, but of mathematical curiosity and zeal. Jerry spotted a loophole and took advantage of it. This kind of thing doesn’t happen often, but mathematical errors in lotteries do occur. It’s worth taking a closer look. And if you don’t find a loophole, you’re left with luck and the joy of gambling itself.

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