This is a great story.
***************************
This particular game was called Winfall. A ticket cost $1. You picked six numbers, 1 through 49, and the Michigan Lottery drew six numbers. Six correct guesses won you the jackpot, guaranteed to be at least $2 million and often higher. If you guessed five, four, three, or two of the six numbers, you won lesser amounts. What intrigued Jerry was the game’s unusual gimmick, known as a roll-down: If nobody won the jackpot for a while, and the jackpot climbed above $5 million, there was a roll-down, which meant that on the next drawing, as long as there was no six-number winner, the jackpot cash flowed to the lesser tiers of winners, like water spilling over from the highest basin in a fountain to lower basins. There were lottery games in other states that offered roll-downs, but none structured quite like Winfall’s. A roll-down happened every six weeks or so, and it was a big deal, announced by the Michigan Lottery ahead of time as a marketing hook, a way to bring bettors into the game, and sure enough, players increased their bets on roll-down weeks, hoping to snag a piece of the jackpot.

The brochure listed the odds of various correct guesses. Jerry saw that you had a 1-in-54 chance to pick three out of the six numbers in a drawing, winning $5, and a 1-in-1,500 chance to pick four numbers, winning $100. What he now realized, doing some mental arithmetic, was that a player who waited until the roll-down stood to win more than he lost, on average, as long as no player that week picked all six numbers. With the jackpot spilling over, each winning three-number combination would put $50 in the player’s pocket instead of $5, and the four-number winners would pay out $1,000 in prize money instead of $100, and all of a sudden, the odds were in your favor. If no one won the jackpot, Jerry realized, a $1 lottery ticket was worth more than $1 on a roll-down week—statistically speaking.

“I just multiplied it out,” Jerry recalled, “and then I said, ‘Hell, you got a positive return here.’”