Buying the Jackpot: A History of Professional Lottery Syndicates Wins

The $95 Million Texas Lottery Take-down

April 2023 witnessed a lottery win in Texas that sent shockwaves far beyond the usual celebratory cheers.

The $95 million Lotto Texas jackpot wasn’t claimed by a lucky individual or a small office pool; instead, it was the culmination of a meticulously planned operation by a professional gambling syndicate, a move so audacious it was likened to a heist.

At the heart of this endeavour were two figures with reputations for exploiting the edges in betting markets: Bernard Marantelli and Zeljko Ranogajec.

Marantelli is a former London-based banker who went on to found the betting site ColossusBets. He also runs White Swan Data, a business that scours global betting markets for arbitrage opportunities, on-selling the information to gamblers. He brought the on-the-ground coordination and logistical expertise to the operation.

The financial muscle and strategic genius behind the operation are widely attributed to Zeljko Ranogajec, a reclusive Tasmanian gambling expert often referred to as ‘the Joker’.

Now based in London, Ranogajec has cultivated an almost mythical status in the gambling world, renowned for his ability to use sophisticated mathematical and statistical analysis to identify and exploit profitable betting opportunities across a diverse range of markets, from horse racing to sports. He also has a stake in ColossusBets.

The syndicate’s strategy was simple yet incredibly ambitious. They would systematically purchase enough tickets to cover nearly all possible number combinations for the Lotto Texas draw. With approximately 25.8 million possible combinations, this was no small feat. But the business case is compelling.

At $1 per entry, total purchase cost for a near guaranteed win is around $25 million. Add another $10 million for logistics and personnel costs and you’re still well below the collect amount. As long as you’re the only winner.

Lottery.com were engaged as the syndicate’s lottery courier service earning a 5% commission on all tickets processed. They managed to somehow acquire dozens of official ticket-printing terminals from the Texas Lottery Commission (the Commission) which they had delivered to nondescript locations around Texas including a former dentist’s office and a warehouse that became makeshift command centres.

From these locations over a frantic few days, teams worked tirelessly feeding numbers into the machines and printing tickets at a peak rate of 100 tickets a second. The sheer scale of the operation was staggering. Witnesses reported seeing an unusual surge in lottery ticket purchases at specific locations with individuals making repeated large transactions.

Before the balls were drawn on April 22, the syndicate had just over 99% of all possible number combinations purchased, including the winning numbers 3, 5, 18, 29, 30 and 52.

The $95 million jackpot with a one-time cash payout of $57.8 million was claimed by a single winner – newly formed Delaware limited partnership named Rook TX, choosing to remain anonymous.

But word soon got out, with the Wall Street Journal first breaking the story.

The Texas Two-Step: Outrage and Regulatory Reckoning

The revelation that a professional syndicate had effectively ‘bought’ the $95 million Texas Lottery jackpot ignited a firestorm of public outrage. The win was perceived by many as a blatant manipulation of a system intended for ordinary citizens dreaming of a life-changing stroke of luck. The idea that a wealthy, sophisticated group could systematically corner the market on all possible outcomes left a bitter taste, with many feeling cheated out of their already slim chances.

Lieutenant Governor Dan Patrick, sensing the mood didn’t mince words, labelling the syndicate’s actions, “the biggest theft from the people of Texas in the history of Texas.” This strong condemnation echoed the sentiments of countless Texans who felt the integrity of their state lottery had been compromised.

The intense public scrutiny quickly led to accountability demands. Governor Greg Abbott responded by ordering the Texas Rangers to launch a full investigation into the circumstances surrounding the win. Simultaneously, Texas Attorney General Ken Paxton initiated a probe focusing on the role of lottery courier services and the possibility of any illegal activities that might have facilitated the syndicate’s operation.

The Commission itself came under immense pressure.

It was revealed that a junior staff member had approved the syndicate’s unusual request for increased access to lottery terminals, a decision that proved pivotal in their ability to purchase millions of tickets in a short timeframe. The fallout from this oversight was significant, culminating in the recent resignation of the Commission’s executive director, Ryan Mindell.

Mindell had originally defended the win as being within the rules of the game, saying,

“…for decades, groups have formed to buy tickets when they believe it is advantageous for them to do so…Of course, the unsuccessful ones don’t get news stories written about them. The integrity of the game was not compromised.”

In the wake of the controversy, the Commission has now moved to implement new measures aimed at preventing similar bulk-buying schemes. Software restrictions were introduced to limit the daily number of tickets any single terminal could sell. This measure directly targeted the syndicate’s strategy of using numerous terminals to rapidly acquire the necessary volume of tickets.

The role of lottery courier services, such as Lottery.com, came under intense scrutiny. These services allow individuals to order lottery tickets online or through apps, with the courier service purchasing the physical tickets on their behalf. While convenient for some, these services were identified as a potential avenue for sophisticated syndicates to orchestrate large-scale purchases without directly being present at numerous retail locations. The Commission subsequently moved to ban lottery courier services altogether, arguing that they posed a risk to the integrity and transparency of the lottery.

There were also legal repercussions, with a lawsuit filed by a subsequent lottery winner who argued that the syndicate’s actions had diminished the potential size of their jackpot.

Other Syndicates That Successfully Bought the Lottery

While the Texas Lottery win in 2023 brought the concept of buying the game to the forefront of public consciousness, it was not an entirely novel strategy. Other groups have successfully bought the game. Undoubtedly many more have tried and failed.

Perhaps the most widely cited example dates back to 1992 with the Irish National Lottery. When the jackpot reached a then-record £2 million, a syndicate spearheaded by Dublin businessman Stefan Klincewicz saw a unique opportunity. Recognising that the cost of purchasing tickets for all possible combinations was approximately £1.6 million, the group embarked on a systematic buying spree.

They mobilised a large team of individuals who fanned out across Ireland, purchasing tickets en masse. The sheer volume of their activity raised eyebrows and even sparked an initial investigation by lottery officials. However, as the syndicate had not technically broken any rules, their win was ultimately deemed legitimate.

This audacious move, though successful, had a significant impact on the Irish Lottery’s structure, leading to changes designed to prevent similar attempts in the future, such as increasing the number of possible combinations.

Also in 1992, the Virginia Lottery $27 million jackpot was won by a 2500-person Australian based syndicate headed by a mathematician named Stefan Mandel. In that case, the syndicate bought around 5 million entries. While reports suggested the involvement of Ranogajec, his direct participation at the time was never definitively confirmed.

What are the odds a 2,500 man strong buy-the-game syndicate out of Australia did not involve Ranogajec?

More recently, the activities of groups like Black Swan Capital, a syndicate reportedly comprising individuals with backgrounds in mathematics and finance, have come to light in the United States. While their exact methods are often shrouded in secrecy, their repeated multimillion-dollar wins in various state lotteries (including Missouri, North Carolina, and Maryland) suggest a highly analytical and potentially volume-based approach.

There’s no known link between White Swan Data and Black Swan Capital.

Likely Failures in the High-Stakes Lottery Game

The allure of a guaranteed jackpot win by purchasing all or a near-total set of lottery combinations is undeniable. But instances of successful ‘buying the game’ strategies are rare precisely because the risks, logistical nightmares, and sheer financial outlay involved make failure a far more probable outcome.

For every publicised win, there are likely numerous unseen attempts that have fallen short, resulting in significant financial losses.

One of the most significant hurdles is the logistical labyrinth of executing such a massive ticket purchase. For lotteries boasting tens, or even hundreds of millions of possible combinations, the sheer volume of tickets required presents an almost insurmountable challenge. Imagine the manpower needed to fill out or print, store, and then meticulously check millions of individual tickets within the limited timeframe before a draw.

The potential for human error – a missed number, a printing malfunction, a delay in acquisition – is enormous. Even the well-oiled machine of the Texas syndicate encountered logistical complexities, highlighting the inherent difficulties in such large-scale operations.

The cost of certainty is astronomical. Jackpots on 6-number lottery games need to reach truly staggering figures to make buying all combinations a potentially profitable venture, even before considering taxes and the ever-present risk of multiple winners.

Even if a syndicate manages to overcome the logistical and financial barriers to near-complete coverage, the peril of plenty – the risk of multiple winners – looms large. If other individuals or groups independently select the winning numbers, the jackpot prize is split, eroding the syndicate’s profit margin to the point of making their endeavour unprofitable. This is an inherent risk that no amount of planning or financial investment can entirely eliminate.

The Ethics of Engineered Wins and How Lotteries Are Dealing with Syndicates

The act of a professional syndicate systematically buying a significant portion, or all, of the possible combinations in a lottery jackpot raises complex ethical questions.

On one hand, proponents might argue that it represents a clever application of mathematical probability and financial resources to gain an edge over a game that typically offers a horrible return to player rate.

If the syndicate operates within the existing rules and laws of the lottery, they are simply exploiting a loophole or an inefficiency in the system. From this perspective, it’s a form of arbitrage, albeit in the realm of gambling. They are undertaking a significant financial risk and logistical challenge for a return that is not guaranteed.

They are also contributing substantially to the jackpot pool for future draws in the event they do not win.

The opposing view often resonates more strongly with the general public. Lotteries are fundamentally designed as games of chance, where individuals with modest investments have a small possibility of winning a life-altering sum. The entry fee for a ticket is often seen as the price of a dream.

When a wealthy syndicate effectively removes the element of chance and turns the lottery into a calculated financial transaction, it undermines this fundamental premise. It can be perceived as unfair, as it diminishes the already slim odds for regular players and can foster a sense that the ‘game’ is being rigged, even if legally.

The public outcry following the Texas win clearly illustrates this sentiment, with many feeling that the spirit of the lottery had been violated. The potential for reduced jackpot sizes in future draws, as fewer casual players participate due to a perceived lack of fairness, could negatively impact the overall lottery ecosystem.

Lottery commissions around the world have become increasingly aware of the potential for professional syndicates to exploit their systems and are taking various measures to prevent jackpots from being effectively bought.

One of the most common strategies is to limit the number of tickets that can be purchased in a single transaction or within a specific timeframe at individual retail locations and, more recently, through online platforms. The software restrictions implemented in Texas post-2023 are a prime example of this approach. By capping the number of tickets a single terminal can process daily, lottery operators make it significantly more difficult for syndicates to amass the millions of tickets needed for near-complete coverage within the limited time before a draw.

Another tactic involves increasing the number of possible combinations in a lottery game. Good luck trying to buy a 7-number Powerball jackpot!