Gaming the Lottery: Jerry and Marge Go Large

From the Huffington Post:

Gerald Selbee broke the code of the American breakfast cereal industry because he was bored at work one day, because it was a fun mental challenge, because most things at his job were not fun and because he could—because he happened to be the kind of person who saw puzzles all around him, puzzles that other people don’t realize are puzzles: the little ciphers and patterns that float through the world and stick to the surfaces of everyday things.

This was back in 1966, when Jerry, as he is known, worked for Kellogg’s in Battle Creek, Michigan. He was a materials analyst who designed boxes to increase the shelf life of freeze-dried foods and cereals. “You ever buy a cereal that had a foil liner on the inside?” Jerry asked not long ago. “That was one of my projects.”

He worked in the same factory where the cereals were cooked, the smells wafting into his office—an aroma like animal feed at first, and then, as the grains got rolled and flaked and dried, like oatmeal. Near his desk, he kept a stash of cereal boxes made by Kellogg’s competitors: Cheerios from General Mills, Honeycomb from Post. Sales reps brought these back from around the country, and Jerry would dry, heat and weigh their contents in the factory’s lab, comparing their moisture levels to that of a Kellogg’s cereal like Froot Loops. It wasn’t the most interesting job, but both of Jerry’s parents had been factory workers, his father at a hose-fitting plant and his mother at the same Kellogg’s factory, and he wasn’t raised to complain about manual labor.

One day Jerry found himself studying a string of letters and numbers stamped near the bottom of a General Mills box. Companies like Kellogg’s and Post stamped their boxes too, usually with a cereal’s time and place of production, allowing its shelf life to be tracked. But General Mills’ figures were garbled, as if in secret code. Jerry wondered if he could make sense of them. After locating a few boxes of General Mills and Kellogg’s cereals that had sat on store shelves in the same locations, he decided to test their contents, reasoning that cereals with similar moisture must have been cooked around the same time. Scribbling on a piece of scratch paper, he set up a few ratios.

All of a sudden, he experienced the puzzle-solver’s dopamine hit of seeing a solution shine through the fog: He had worked out how to trace any General Mills box of cereal back to the exact plant, shift, date and time of its creation. “It was pretty easy,” Jerry would recall decades later, chuckling at the memory. In a more ruthless industry, cracking a competitor’s trade secrets might have generated millions in profits. This, however, was the cereal business. Discovering the adversary’s production schedule didn’t make anyone rich, and so when Jerry shared his findings with his managers, his discovery was swallowed and digested without fuss.

He didn’t mind. To him, the fun was in figuring it out—understanding how this small piece of the world worked. He’d always had a knack for seeing patterns in what struck other people as noise. As a kid, Jerry had been dyslexic, fumbling with his reading assignments, and he hadn’t realized he possessed academic gifts until a standardized test in eighth grade showed he could solve math problems at the level of a college junior. His senior year of high school, he’d married his sweetheart, a bright, blue-eyed classmate named Marjorie, and after graduation he took a job as a Kellogg’s factory worker. As their family grew over the next decade—with six kids in all—Jerry worked a series of factory and corporate jobs: chemist at a sewage-treatment plant, pharmaceutical salesman, computer operator, cereal packaging designer and, eventually, shift manager.

Still, he remained intellectually restless, and he enrolled in night classes at Kellogg Community College, known around town as “Cornflake U.” It wasn’t easy to squeeze in a life of the mind between the demands of a growing brood, so Jerry invited his kids into his obsessions with various hidden layers of the world: When he got interested in mushrooms, he took them hunting for morels in the forests; when he became captivated by geology, he brought them to gravel pits in search of fossilized spheres called Petoskey stones. Around the time his oldest son, Doug, was in high school, Jerry asked Doug for help counting rolls of coins he’d collected. Knowing that people rolled up their spare change and cashed it at the bank, it had occurred to Jerry to buy these rolls at face value, hoping that the bank hadn’t opened and checked them. Jerry’s idea was that maybe bank customers, by mistake, had included certain rare and valuable coins along with the normal ones. Father and son would sit in front of the TV at night and rip open the rolls, searching for buffalo nickels and silver Mercury head dimes; they made about $6,000. “Anything he jumps into, he jumps into one hundred percent,” Doug explained later. “He gets interested in string theory, and black holes, and all of a sudden you’re surrounded by all these Stephen Hawking books.”

As the years passed, Jerry earned a pile of diplomas: an associate’s degree from Kellogg, a bachelor’s in mathematics and business from Western Michigan University and an MBA from WMU. He also started a master’s in mathematics, though eventually family duties got in the way and he didn’t finish. Even then, he couldn’t stop thinking about numbers. One year, when he and Marge went to a used-book sale at a library to find gifts for their family, Jerry’s main purchase was a stack of college math textbooks. When their daughter Dawn asked why, he replied, “To keep my skills sharp.”

So perhaps it was only fitting that at age 64, Jerry found himself contemplating that most alluring of puzzles: the lottery. He was recently retired by then, living with Marge in a tiny town called Evart and wondering what to do with his time. After stopping in one morning at a convenience store he knew well, he picked up a brochure for a brand-new state lottery game. Studying the flyer later at his kitchen table, Jerry saw that it listed the odds of winning certain amounts of money by picking certain combinations of numbers.

That’s when it hit him. Right there, in the numbers on the page, he noticed a flaw—a strange and surprising pattern, like the cereal-box code, written into the fundamental machinery of the game. A loophole that would eventually make Jerry and Marge millionaires, spark an investigation by a Boston Globe Spotlight reporter, unleash a statewide political scandal and expose more than a few hypocrisies at the heart of America’s favorite form of legalized gambling....MUCH MORE