From the Wall Street Journal, April 12:
A global team of gambling whizzes hatched a scheme to snag the jackpot; millions of tickets in 72 hours
In the spring of 2023, a London banker-turned-bookmaker reached out to a few contacts with an audacious request: Can you help me take down the Texas lottery?
Bernard Marantelli had a plan in mind. He and his partners would buy nearly every possible number in a coming drawing. There were 25.8 million potential number combinations. The tickets were $1 apiece. The jackpot was heading to $95 million. If nobody else also picked the winning numbers, the profit would be nearly $60 million.
Marantelli flew to the U.S. with a few trusted lieutenants. They set up shop in a defunct dentist’s office, a warehouse and two other spots in Texas. The crew worked out a way to get official ticket-printing terminals. Trucks hauled in dozens of them and reams of paper.
Over three days, the machines—manned by a disparate bunch of associates and some of their children—screeched away nearly around the clock, spitting out 100 or more tickets every second. Texas politicians later likened the operation to a sweatshop.
Trying to pull off the gambit required deep pockets and a knack for staying under the radar—both hallmarks of the secretive Tasmanian gambler who bankrolled the operation. Born Zeljko Ranogajec, he was nicknamed “the Joker” for his ability to pull off capers at far-flung casinos and racetracks. Adding to his mystique, he changed his name to John Wilson several decades ago. Among some associates, though, he still goes by Zeljko, or Z.
Over the years, Ranogajec and his partners have won hundreds of millions of dollars by applying Wall Street-style analytics to betting opportunities around the world. Like card counters at a blackjack table, they use data and math to hunt for situations ripe for flipping the house edge in their favor. Then they throw piles of money at it, betting an estimated $10 billion annually.
The Texas lottery play, one of their most ambitious operations ever, paid off spectacularly with a $57.8 million jackpot win. That, in turn, spilled their activities into public view and sparked a Texas-size uproar about whether other lotto players—and indeed the entire state—had been hoodwinked.
Early this month, the state’s lieutenant governor, Dan Patrick, called the crew’s win “the biggest theft from the people of Texas in the history of Texas.”
In response to written questions addressed to Marantelli and Ranogajec, Glenn Gelband, a New Jersey lawyer who represents the limited partnership that claimed the Texas prize, said “all applicable laws, rules and regulations were followed.”
This account of what happened is based on interviews with people who were directly involved in the Texas operation or in contact with those who were. The Wall Street Journal also reviewed photos and video of the operation, emails and messages sent by participants and bank records showing how some of the money moved. Subsequent hearings in the Texas Senate revealed additional details.
Math problems
Lottery hunters and other pro gamblers have good reason not to court the limelight. Publicity can draw the attention of tax authorities, encourage bookies and lotteries to tighten rules, or worst of all, inspire copycats who might make a run at the next big jackpot and split the prize.
A group of Princeton University graduates, incorporated under the name Black Swan Capital, has won millions in recent years playing scratch-off tickets and other lottery games in various states. Lottery officials and others who have tracked their tactics say they appear to calculate when the math is most in their favor, using publicly available information such as how many prizes are in a game and how many remain unclaimed. When the odds are right, they swoop in, hoping to win back more money than they spend.
One Black Swan team member collected a $5 million win in Missouri in 2019; another won $10 million in North Carolina in 2022. In Maryland, a Black Swan team used lottery machines in four liquor stores for four days to win a $2.6 million prize.
Black Swanners used to appear in lottery marketing promotions, smiling and holding ceremonial checks, but in recent years they have mostly stayed quiet. They didn’t respond to requests for comment.
With competition in the air and the Texas jackpot nearing the level that could make mass purchases highly profitable, Marantelli and Ranogajec moved fast.
In Texas, as in many states, most people who play the lottery go to a store with a machine, choose numbers, then walk away with a ticket. Back in 2023, Texas also allowed online lottery-ticket vendors to set up shops to print tickets for their customers.
Marantelli’s team recruited one such seller, struggling startup Lottery.com, to help with the logistics of buying and printing the millions of tickets. Like all lotto retailers, it would collect a 5% sales commission. The Texas Lottery Commission allowed dozens of the terminals that print tickets to be delivered to the four workshops set up by the team.
That April 19, the commission announced that there had been no winner in that day’s drawing. The next drawing, with an even larger pot, would be three days later, on a Saturday. The group sprang into action.
The printing operation ran day and night. The team had converted each number combination into a QR code. Crew members scanned the codes into the terminals using their phones, then scrambled to organize all the tickets in boxes such that they could easily locate the winning numbers.
The game called for picking six numbers from 1 to 54. For a pro gambler, some sets of numbers—such as 1,2,3,4,5,6—aren’t worth picking because so many other players choose them, which would split the pot. Marantelli’s operation bought 99.3% of the possibilities.
Money moved to Lottery.com from Ranogajec’s accounts—held under the name John Wilson—in the Isle of Man, a tax haven off the U.K. coast, taking a circuitous route via an escrow account at a Detroit law firm, according to people familiar with the transfers and bank statements reviewed by the Journal.
The crew hit the jackpot that Saturday. One of their tickets was the sole winner.
About two months later, the lottery commission revealed that the prize had been claimed by a limited partnership called Rook TX. The winner had elected to remain anonymous, the commission said, as allowed under state law....
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