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Gamblers find loophole in Mass. lottery game

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Massachusetts has put a limit on ticket purchases for one of its lottery games after the Boston Globe reported that high-stakes gamblers had discovered a loophole that let them profit handsomely.

On Sunday, The Boston Globe reported that a handful of professional gamblers found a quirk in a lottery game called Cash WinFall. If they bought more than $100,000 worth of tickets at certain times of year, they were virtually assured of making a profit.

Following the report, state Treasurer Steven Grossman said that stores can only sell a maximum of $5,000 worth of Cash WinFall tickets in a single day.

Cash WinFall, which has seen struggling sales since it started in 2004, is based on six randomly chosen numbers. According to the Massachusetts Lottery, the odds of correctly picking all six numbers and winning the jackpot are 1 in 9,366,819.

Approximately every three months, if the WinFall jackpot went over $2 million but no one picked all six winning numbers, the money in the pool would go to ticketholders who picked only four or five correct numbers. During these times, known as "rolldown weeks," prizes are four to 10 times larger than normal, The Globe reported.

Gamblers realized if they bought more than $100,000 of the two-dollar tickets during rolldown weeks, their odds of winning went up dramatically — and they won a bigger prize. The Globe said the payoff for five matching numbers might rise from $4,000 to as much as $134,767, depending on the number of tickets sold.

Lottery officials first noticed in 2005 that a few groups who had formed gambling companies were pouring hundreds of thousands of dollars into Cash WinFall, reported The Boston Globe.

Millions in profits
The five biggest winners playing Cash WinFall were earning back the cost of their tickets plus up to $6 million in profits a year during the rolldowns without ever winning the jackpot, a Canadian statistician, Mohan Srivastava, calculated, said The Globe.

These bettors, which were individuals and gambling groups, would monopolize lottery machines at about 12 stores in the days leading up to a rolldown, according to The Globe. Some stores were open special hours specifically to cater to these bettors, The Globe reported Tuesday. They have since been suspended from selling tickets.

"We want to do everything we can to make sure the integrity of the lottery is not questioned in any way, shape, or form,’" Treasurer Grossman told The Globe.

One such gambling company was run by a Michigan couple, Gerald and Marjoree Selbee, both 73, who would occasionally come to Massachusetts to buy tickets in bulk, according to ABC News. They went as far as getting short-term jobs at local stores so they could sell themselves lottery tickets without having to bother store clerks, ABC reported.

In May, during a rolldown week, there were 1,605 prizes awarded, 1,105 of which went to just three winners, all of which were purported "companies" like the ones run by the Selbees that bought large volumes of tickets.

A store gets a five percent commission on each ticket sold, and a one percent bonus if it sells a winning ticket, officials told ABC News.

Cash WinFall will be phased out next spring as part of the normal rotation of lottery games, the treasurer told The Boston Globe.