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How a group of Australian gamblers beat the Texas lottery · The Morning Edition

0:03
S1: The state lieutenant governor of Texas has called it the
0:06
S1: biggest theft from the people of Texas in the history
0:10
S1: of Texas. He was referring to the work of Australian
0:13
S1: gamblers who scooped up a 95 million American dollar jackpot.
0:19
S1: And this is the kicker. They did it by buying
0:21
S1: up nearly every single lottery ticket. And they say by
0:25
S1: following all the rules. I'm Samantha Selinger Morris, and you're
0:29
S1: listening to the Morning Edition from the Age and The
0:32
S1: Sydney Morning Herald today, investigative reporter Patrick Begley on the
0:37
S1: Australians who took down the Texan lottery. It's March the 10th.
0:44
S1: Welcome back to the podcast, Patrick.
0:46
S2: Thank you so much for having me on.
0:48
S1: Okay, I've got to tell the listeners, you and I
0:50
S1: have been talking about this for months. So it's a
0:53
S1: very exciting day when this is finally published and we
0:56
S1: can speak. So you've got to start off by telling everybody.
1:00
S1: Who are these men that pulled this off? It's an
1:03
S1: eclectic group, to say the least. I mean, you can
1:05
S1: imagine these men being played by, like, Awkwafina or Rihanna.
1:09
S1: Were they women? And it was in some sort of like,
1:11
S1: Ocean's 11 type film, right?
1:14
S2: Maybe not in physical resemblance, but, uh, but yeah, they're,
1:19
S2: they're a funny mix in that they are professional gamblers.
1:25
S2: They are very mathematically numerate, but at the same time,
1:30
S2: they're operating in this world, which is not high finance
1:34
S2: on Wall Street or in some downtown financial center. They're
1:39
S2: not in actuarial studies. They're applying their mathematical skills to gambling.
1:45
S2: And so their industry is lotteries, horse races, sports matches,
1:51
S2: roulette wheels, pretty much any form of gambling they're interested in.
2:01
S2: So the two main people to start off with, and
2:04
S2: these were actually first identified by the Houston Chronicle were
2:08
S2: Bernard Mantelli. He's the son of a Melbourne bookmaker. He
2:12
S2: learns at his father's feet about horse racing, greyhound racing.
2:16
S2: Then he becomes a financial trader at Deutsche Bank, but
2:20
S2: then leaves and ends up as a professional gambler himself.
2:23
S2: He's got his own betting pool company, another company devoted
2:27
S2: to analytics. He's doing business in London and he's looking
2:32
S2: around the world for opportunities. He's also in business with
2:37
S2: the second main character in this story, who's also an Australian,
2:41
S2: and that's Jelko Renegades. So Bernard Mantelli grew up in Melbourne,
2:46
S2: Renegades grew up in Hobart, and he very early on
2:51
S2: had an interest in gambling. So when he was still
2:53
S2: a university student, he was interested in things like card
2:57
S2: counting and he teamed up with David Walsh, who many
3:00
S2: people now know as the founder of Mona the Museum
3:04
S2: of Old and New Art in Hobart. That museum is
3:08
S2: really built on gambling wealth. So Jelco ran a guy
3:11
S2: and David Walsh as young guys, they're interested in card counting.
3:15
S2: They're interested in other things like Keno, and they're looking
3:20
S2: for any small opportunity or weakness in a game to
3:23
S2: exploit anything where there's a subtle advantage. And their modus
3:28
S2: operandi is essentially to see a subtle, small advantage and
3:32
S2: then put as much money into it as possible. So
3:36
S2: it's really about the volume and energy. He ends up
3:40
S2: leaving Australia to go to London as well. He sets
3:43
S2: up in London, and he earns this reputation as one
3:46
S2: of the biggest gamblers in the world. David Walsh at
3:50
S2: an investment conference, he talked about the syndicate that he
3:53
S2: and Ranjeet are in. And in 2022 he said that
3:57
S2: they bet about $10 billion every year.
4:03
S1: Okay, but let's get into really the weakness that they identified,
4:08
S1: that it's the heart of what they pulled off. So
4:10
S1: what was the weakness that they saw and what did
4:13
S1: they actually do? How did these men actually manage to
4:17
S1: pull this off? Can you sort of take us back
4:19
S1: to the beginning and then walk us through the main steps?
4:22
S2: So Bernard Mantelli calls this schoolboy maths, and what he
4:26
S2: really means by that is that if you look at
4:29
S2: the Texas Lottery, there are a certain number of possible outcomes.
4:33
S2: There's six balls chosen, 1 to 54, and that generates
4:38
S2: about 25.8 million different possibilities. Tickets cost a dollar. So
4:44
S2: in theory, if you wanted to buy up all the tickets,
4:48
S2: you would spend $25.8 million. Now, a lot of the
4:52
S2: time this doesn't make sense. Even if you've got the
4:54
S2: money to do that kind of thing. Because I mean,
4:58
S2: the jackpot has to be a certain size for it
5:00
S2: to be worth your while. And what was special about
5:03
S2: Texas is that the jackpot had been building over a
5:06
S2: really long time. It was a record stretch with no
5:10
S2: one winning. And so every time there's a draw and
5:13
S2: no one wins, the jackpot rolls over. And every time
5:16
S2: someone buys a ticket, a percentage of the ticket price
5:19
S2: feeds into the jackpot. So over months and months and months,
5:23
S2: the jackpot is swelling. And then it gets to a
5:26
S2: point where it's much higher than 25 million. It's like
5:30
S2: 70 million. And then these professional gamblers, they go on
5:34
S2: a rampage and they buy heaps of tickets. It drives
5:38
S2: that jackpot even higher to an eventual $95 million. So
5:44
S2: the schoolboy maths essentially is is the jackpot higher than
5:49
S2: the amount you would need to spend to buy up
5:53
S2: all the tickets and to essentially guarantee yourself a win.
5:58
S3: Someone in North Texas, $1 million richer, a few million
6:02
S3: dollars richer. How about $95 million?
6:06
S4: The Texas Lottery says the winning ticket for last night's
6:09
S4: lotto drawing was bought in Colleyville. The $95 million prize
6:13
S4: was the biggest jackpot in the country and Texas Lottery's
6:17
S4: biggest prize in more than 12 years.
6:19
S2: Now this team, they bought up nearly all the tickets,
6:22
S2: more than 99%. So there was still a small risk
6:25
S2: that they could be very unlucky. But the hard part
6:29
S2: in all of this was the logistics.
6:32
S1: So take us through the logistics. I mean, as a
6:34
S1: layperson listening to this, I don't even understand how can
6:38
S1: someone physically buy more than 25 million lottery tickets?
6:42
S2: So you have to physically buy the ticket and have
6:45
S2: it printed in order for it to be valid. So
6:48
S2: Bernard Mantelli, he sees this opportunity. Money comes from Jelko Rana.k.
6:54
S2: So he's got that bankroll, but he also needs relationships
6:57
S2: with people on the ground to be able to actually
6:59
S2: process the purchase order. And that's actually where the third
7:03
S2: Australian in this story comes in. He's a guy called
7:07
S2: Ade Lepchenko. Living in Malta, which is a gambling capital
7:11
S2: in Europe. And he said that he knew some of
7:14
S2: these companies that could help them on the ground in Texas.
7:18
S2: What was interesting about Ade Rep Cenco is that in
7:21
S2: researching this story, I actually realized that he had this
7:23
S2: previous life in Australia, where he dated the supermodel Miranda Kerr,
7:29
S2: who was on her way to becoming very famous. He
7:32
S2: also spent time in jail, convicted of a fraud. So
7:37
S2: flash forward a rep Cenco. He's living a new life
7:41
S2: in Malta and he offers to help this syndicate put
7:44
S2: them in touch with some lottery retailers. And so in
7:48
S2: the end, the syndicate finds four different retailers. and then
7:54
S2: their job is essentially to pump out as many tickets
7:57
S2: as possible. Bernard Mantelli flies to Texas to oversee the operation.
8:02
S2: And then you've got these four. Print sites across the
8:05
S2: state that are essentially working 24 hours a day. People
8:10
S2: are manning ticket terminals that were, in many cases just ordered.
8:14
S2: I mean, I think one retailer ordered ten terminals to
8:17
S2: be delivered in a single day. And this is, you know,
8:22
S2: considering the fact that most retailers only have 1 or 2.
8:25
S2: It's a huge number.
8:26
S1: And so at this point, I really want to ask
8:28
S1: what sort of risk. Had the syndicate taken on because
8:32
S1: they had spent something like American 25 million. Dollars on
8:36
S1: the tickets. They bought more than 99% of the tickets.
8:40
S1: But there was still a chance that someone outside the
8:42
S1: syndicate could win, right? And all of that money would
8:44
S1: be lost.
8:45
S2: Yeah. And they, in fact, spent more than 25 million
8:50
S2: because they'd spent some money in previous draws leading up
8:54
S2: to that mega jackpot right at the end. On 22nd
8:58
S2: April 2023. So they'd really outlaid a lot of money.
9:02
S2: And that's what Jelco ran a Guyot's stressed to me.
9:05
S2: He said this endeavor involved considerable risk, and that substantial
9:10
S2: money had been wagered on top of the 25 million
9:13
S2: spent in that final draw. The way I understand it, though,
9:19
S2: is that certain ticket combinations can be very unlucky for
9:22
S2: the group if they are popular with regular players. Apparently one,
9:28
S2: two three, four, five, six is a popular choice, and
9:32
S2: the group knows that if they have the same winning
9:35
S2: ticket as someone else, the prize gets split. And because
9:39
S2: they've invested so much money, as soon as they're starting
9:42
S2: to have to split the prize, that's when they can
9:46
S2: start running into real trouble. So for that reason, certain
9:50
S2: ticket combinations were avoided. And yes, that did open a
9:54
S2: certain degree of risk for them, even if they bought
9:57
S2: more than 99% of combinations, if they hadn't bought the
10:00
S2: full 100%. There was still a chance that they could
10:04
S2: be having a very unlucky day, and that would mean
10:08
S2: losing tens of millions of dollars.
10:17
S1: After the break.
10:19
S5: I think it was probably the most logistically ambitious thing
10:22
S5: I've probably done. I think it wasn't the best maths
10:25
S5: we've ever done. It's schoolboy math, but you know, schoolboy
10:28
S5: maths is just the very beginning of getting something like
10:31
S5: that done.
10:39
S1: Okay, so that's what's happening on the gambler's side. But
10:42
S1: I really want to know what's happening at this point
10:45
S1: in the minds, perhaps, of just regular people in Texas
10:48
S1: who are buying their tickets, because you've written that in
10:51
S1: the lead up to this incredible draw. You know, the
10:53
S1: jackpot is soaring because no one's winning week after week.
10:57
S1: It's growing. And that it, quote, fed on players hopes, rituals,
11:01
S1: addictions and superstitions. So I guess, tell us, what is
11:05
S1: it like for those millions of gamblers across Texas? You know,
11:08
S1: they're rocking up at tiny convenience stores. And are they
11:11
S1: like pinning their hopes on these $1 tickets?
11:13
S2: Yeah. I mean, I guess people play the lottery for
11:17
S2: different reasons. You know, for some people, it might be
11:20
S2: an impulse. For other people, it might be a ritual.
11:24
S2: They buy the same numbers every single week and their
11:28
S2: special numbers to them. For other people, it might even
11:31
S2: be part of a gambling problem. And I think that
11:34
S2: lotteries are may be seen as more social or more
11:37
S2: communal than other forms of gambling, because you're not going
11:42
S2: to a casino, which has got a safe and there's
11:44
S2: house money, you're buying your ticket at your newsagent or
11:48
S2: your petrol station or wherever, and there's a feeling that
11:51
S2: everyone's in it to win it and that everyone's up
11:54
S2: against each other. And really, it's just a matter of luck.
11:58
S2: So yeah, there's a lot of reasons why people would
12:00
S2: be buying these tickets. There is increased interest as the
12:04
S2: jackpot gets higher. So when there was that record drought
12:08
S2: with no winner and the jackpots inching up, inching up,
12:12
S2: then that does start to drive more interest. Certainly the
12:16
S2: Lottery Commission on the day of the draw, the 22nd
12:20
S2: of April, it said that players were turning out in
12:23
S2: droves for the exclusive chance at winning the largest jackpot
12:26
S2: on the continent, or whatever it was at the time.
12:29
S2: But I spoke to someone who said that they never
12:32
S2: really bought into that narrative, and this is a woman
12:35
S2: called Dawn Nettles. She's in her 70s. She has been
12:38
S2: playing the Texas Lottery since it was founded in the
12:41
S2: early 90s, and she's been writing about the Texas Lottery
12:44
S2: for pretty much as long. She has an independent newsletter
12:47
S2: that she publishes, which is devoted to the Texas Lottery
12:52
S2: and Nettles. When she could see the jackpot really spiking
12:56
S2: in those final days. She told me that she knew
12:59
S2: that something was up, that this was far beyond what
13:03
S2: any regular Texan would buy. So she's watching the jackpot
13:06
S2: go up in real time, and she thinks to herself,
13:10
S2: someone's buying up all the combinations, she said. It sticks
13:13
S2: out like a sore thumb.
13:15
S6: Well, I knew that they were selling all the combinations
13:18
S6: and that's what I need. I'm in favor of a
13:21
S6: lottery and always have been. However, I'm only in favor
13:24
S6: of a lottery if it's fair. And there's nothing fair
13:27
S6: about the Texas lottery.
13:29
S2: And her question then was, well, why isn't the Lottery
13:32
S2: Commission stepping in and doing something about it? But she
13:36
S2: made a prediction on her website on the Saturday. She
13:40
S2: said the jackpot will be won tonight.
13:42
S1: That's incredible. And then of course, we get to April 22nd, 2023.
13:48
S1: This is the draw.
13:50
S7: Get ready to play the games of Texas for Saturday,
13:54
S7: April 22nd. Tonight's Lotto Texas jackpot is an estimated $95 million.
14:02
S7: The first number is.
14:03
S1: Tell us about the elation, the mood in the room
14:07
S1: as the syndicate who are in on this operation realized
14:10
S1: that they had won.
14:12
S2: Yeah, I know, so I don't know exactly who was
14:15
S2: in the room, but Bernard Marinelli says that he was
14:20
S2: in a hotel room with about 40 or so people,
14:23
S2: I guess, members of the team somewhere just outside of Austin,
14:28
S2: and they're watching the live draw and it's really packed
14:31
S2: in the room, he said. People can barely move. But
14:37
S2: not only are there people in the room, there's also
14:39
S2: all these cardboard boxes, about 150 or so boxes. And
14:43
S2: in those boxes are the tickets, Because every ticket had
14:47
S2: to be catalogued so that it could be found easily
14:50
S2: and checked. So there are these envelopes or binders full
14:53
S2: of tickets, and they're in boxes. And the boxes. There's
14:56
S2: a picture of a picture of them and they are
14:59
S2: nearly to the ceiling. They're watching the live draw. The
15:03
S2: team at about a bit after 10:00. And the numbers
15:07
S2: come through one after the other, one after the other.
15:11
S7: The first number is 52 and the second number is 30.
15:18
S2: They're kind of joking. Oh, I think we've got that number,
15:21
S2: you know, because they almost certainly have. But then there's
15:24
S2: this race to actually find the winning ticket and they
15:26
S2: find the right box and they find the right envelope.
15:29
S2: And then the right envelope has got a thousand tickets
15:31
S2: in it. And they're leafing through those. Someone says, oh,
15:33
S2: I think I've got it. No, no, no, that's not
15:35
S2: quite right. The last number's wrong. And then finally, Bernard
15:38
S2: Marinelli says they've got it. They've got the winning ticket
15:41
S2: and it's passed around the room. People are touching it.
15:44
S2: They're there, kissing it there, handling it like a trophy.
15:47
S2: And there's this real mood of elation. But what I
15:52
S2: found interesting was that Bernard Marinelli says that the real
15:55
S2: excitement for him, though, was not finding the winning ticket.
15:58
S2: It was actually printing the last ticket because he says
16:03
S2: the draw is random. What he could control was the
16:07
S2: print operation. And so the real thrill for him was
16:11
S2: the process and the successful completion of the printing.
16:16
S5: And I call out, I think we've got that one.
16:18
S5: And the next number is eight. And I say, I
16:20
S5: think we've got that one as well. So there was
16:23
S5: a bit of sort of exuberance and comedy because we'd
16:25
S5: achieved our goal. We had got the tickets through the system.
16:29
S5: I think it was probably the most logistically ambitious thing
16:32
S5: I've probably done. I think it wasn't the best maths
16:35
S5: we've ever done. Like, you know, when it leaked out
16:38
S5: on social media, everyone said, I thought about that, I
16:40
S5: thought about that. And indeed many people have said, oh,
16:43
S5: look at that Jackpot. It's bigger than the number of permutations.
16:46
S5: It's schoolboy math. But, you know, schoolboy maths is just
16:49
S5: the very beginning of getting something like that done.
16:56
S1: And of course we have to ask, is it actually
16:59
S1: legal what they did?
17:01
S2: Yes. Well that's the US $95 million question. I should
17:06
S2: say that the group actually took home $57 million because
17:10
S2: the 95 you needed to sign up to receive that
17:14
S2: over the course of 30 years. They said, okay, well,
17:17
S2: we want it upfront. We'll take 57 million as a
17:20
S2: cash lump sum. The question of whether it's legal. So
17:25
S2: there's a court case on at the moment, an electrician
17:27
S2: called Jerry Reed who played the lottery for years. He's
17:32
S2: a regular Texan guy. He won the jackpot after the
17:36
S2: syndicate won theirs. And because the jackpot, once it's won,
17:40
S2: it starts off again at, I think $5 million is
17:44
S2: where it starts. Jerry Reed's contention is that if the
17:48
S2: syndicate didn't win, then he would have stood to win
17:51
S2: a lot more because he had the next winning ticket.
17:57
S2: Jerry Reed's case really centers on how the bets were placed.
18:01
S2: It's a really big part of it. And and Reed's contention,
18:04
S2: or his lawyer's contention, is that the bets were invalid
18:08
S2: and that they were part of what he called an
18:11
S2: illegal game rigging scheme. And Bernard Marinelli says all rules
18:16
S2: were followed in the placing of the bets. And a
18:19
S2: lawyer for the syndicate has also said that all rules,
18:22
S2: laws and regulations were followed.
18:25
S1: Wow, what a story, Patrick.
18:30
S2: It was it was a wild ride covering it, partly
18:34
S2: because more and more information kept coming out. So I
18:38
S2: was very excited to be able to actually talk to
18:42
S2: Marinelli and Rana.k, especially because Rana.k really doesn't give interviews.
18:48
S2: A lot of the time. He's been called the Loch
18:50
S2: Ness Monster. There are no photos of him. I looked
18:54
S2: in the system that we have here at work. The oldest,
18:57
S2: the most recent photo we have of him is 15
19:00
S2: years old. So yeah, he's a hard guy to get
19:03
S2: Ahold of. But my colleague Kate McClymont has been writing
19:05
S2: about him for decades. He's an enduring interest for The
19:11
S2: Sydney Morning Herald because he's a guy from Hobart that
19:15
S2: moved to Sydney and then eventually London, but he's Australian
19:19
S2: and he is one of the largest gamblers in the world.
19:24
S1: That's incredible. Well, it looks like you've captured the Loch
19:26
S1: Ness Monster, at least of gambling. And this story, it
19:29
S1: has to be said it was five months in the
19:32
S1: making for you. So thank you so much, Patrick, for
19:35
S1: your time.
19:36
S2: Thank you. Always a pleasure.
19:44
S1: In other news today, the more than $80 billion was
19:48
S1: wiped from the Australian share market yesterday, prompted by fears
19:52
S1: that oil and gas production out of the Middle East
19:54
S1: will be dramatically curtailed. Australia's Esafety commissioner has signalled she
19:59
S1: will force Big Tech to remove offshore porn companies from
20:03
S1: online apps. And how rich is Angus Taylor? The new
20:07
S1: opposition leader's wealth portfolio has been revealed in our mastheads.
20:12
S1: Go to our websites The Age or smh.com.au to find
20:16
S1: out more. Today's episode was produced by Josh towers. Our
20:21
S1: executive producer is Tammy Mills, and our podcasts are overseen
20:25
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