While nobody actually knows, I think it's safe to figure they are doing it like Wheel of Fortune, except you take an online test first.
We all had to enter our home zip codes when we signed up. Jeopardy will use that information to determine which television market you are in. While I live in the Lehigh Valley, I will be lumped in with the Philadelphia market (this is important later).
When Jeopardy comes around to your television market, they will random draw however many people from that television market they expect to be able to audition and send out a round of emails. There will be many who can't make it or don't reply, so a second round of emails will go out to another random bunch from that same television market, and so on until they have their slots filled.
When Wheel came to New York about ten years ago, they knew they would not be going to Philadelphia, so they used an entire day for people drawn from the Philadelphia TV market because they figured that would be close enough for many people to make the trip. I would expect Jeopardy to do the same as I believe they haven't been to Philadelphia in 20 years.
At this point, I’m not sure we know if they will do more than one round of tests per year, although I remember some evidence coming out that they will do two tests per year. The problem is, we don’t know if everyone’s passing score gets thrown out with each six month testing period, or for how long our passing scores keep us on the list. We haven’t heard anything about auditions anywhere in the two months since the test.
We also have nothing concrete on what is passing—the old standard of 35 that we know and love, or possibly a top percentile of test scores so they can account for “easy” vs. “hard” tests. With as much stand and stares as we’ve seen this season, I’m inclined to believe the old standard of 35 is being used.
Total game show career losings = $171,522