Friday, April 25, 2025

How a Secretive Gambler Called ‘The Joker’ Took Down the Texas Lottery

A global team of gambling whizzes hatched a scheme to snag the jackpot; millions of tickets in 72 hours

By Joe Wallace and Katherine Sayre of The WSJ. Excerpts:

"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."

"The crew worked out a way to get official ticket-printing terminals. Trucks hauled in dozens of them and reams of paper." 

"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."

"Over the years, Ranogajec [Zeljko Ranogajec, the gambler who bankrolled the operation] 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 . . . paid off spectacularly with a $57.8 million jackpot win."

"lieutenant governor, Dan Patrick, called the crew’s win “the biggest theft from the people of Texas in the history of Texas.”"

[the group's lawyer] "said “all applicable laws, rules and regulations were followed.”"

"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."

"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."

"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"

"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."

"Gov. Greg Abbott ordered the Texas Rangers to investigate"

"State lottery directors say they are seeing more organized efforts to buy lottery tickets in bulk, but that the groups are largely operating legally and transparently."

"Maryland lottery director John Martin" [said]  it’s not illegal"

"His state has imposed limitations on retailers intended to make bulk buying more difficult."

"That Saturday, the Commission announced the winning numbers: 3, 5, 18, 29, 30 and 52. Within hours, Marantelli’s crew had located the winning ticket in a file box in one of their four workspaces. An associate snapped a photo of a smiling Marantelli holding up the winner, flanked by team members and boxes.

Executives at Lottery.com swapped backslapping emails. “This is a huge win for the company,” wrote Potts, explaining that it would turn a nearly $264,000 profit on its sales commission."

"after a series of articles in the Houston Chronicle exposed the role of the overseas gamblers, Texas lawmakers began asking questions. Nettles, the watchdog, sued Lottery.com and the winners, alleging that the state’s regular players had been defrauded. The defendants haven’t yet responded to the allegations."

"Texas Lottery Commission Executive Director Ryan Mindell, a deputy at that time, said the mass buying had compromised public perception about fairness. He said the request for ticket terminals had been approved by a junior employee, and complied with policy. 

The lottery commission and the Texas Rangers continue to look into the episode. Lottery officials and state lawmakers have taken steps to prevent a repeat."

"The Texas Lottery Commission, however, got wind of [another] effort and thwarted it by pushing out a software update that limited the number of tickets a terminal could sell in a day."

Related posts:

Can you make money betting on horse racing? (2022) 

San Antonio College Math Professor Reforms Texas State Lottery (2007) 

No comments: