The question you opened
A brochure, a retired shop owner, and a roll-down
In 2003 a retired Michigan shop owner read a lottery brochure and spotted a rule inside it.
What did that rule let a patient buyer do?
Buy tickets in bulk on roll-down weeks and profit.
When the jackpot went unclaimed, the prize rolled down into the smaller tiers. On those draws a large batch of tickets returned more than it cost.
Gerald Selbee had run a convenience store and had a degree in mathematics. In 2003 he read the brochure for a Michigan game called Cash WinFall and noticed a rule that other games did not have. If the jackpot went unclaimed past a set level, the money did not roll over to the next draw. It rolled down into the lower prize tiers, so the payouts for matching four or five numbers jumped for that one draw.
Odds never changed. What changed was the amount paid out per winning combination, and that is the other half of an expected value calculation. On a normal draw a ticket returns well under its price. On a roll-down draw, with enough tickets to make the averages behave, it returned more. Selbee tested it with 3,600 dollars, then 8,000, then far larger sums, and eventually ran it as a small company with family and neighbours as shareholders. Jason Fagone told the story for HuffPost Highline in 2018.
Two ideas do the work. The first is expected value: the price of a ticket compared with the average payout per ticket, not the chance of any particular prize. The second is the law of large numbers, which says the average only behaves when the number of tickets is large. Buying ten tickets on a roll-down week is still gambling. Buying three hundred thousand of them is arithmetic. The loophole was legal and eventually noticed.
Michigan closed its game, a Massachusetts game with the same rule ran for several more years, and once journalists and a second syndicate arrived the margins thinned out. The lesson that survives is about where to look. Everyone reads the odds, because the odds are printed in large type. The rules that govern payouts sit in the small type, and that is where a game occasionally stops being a game.
Technique: Read the payout rules, not the odds
Source checked 2026-09-06