By Joe Wallace and Katherine Sayre

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 and 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.

The secret, however, didn't stay secret for long. State officials were outraged when they learned how the operation went down. State Sen. Bob Hall blamed the Texas Lottery Commission, saying the incident signaled "the possibility of an organized crime ring being embedded in the Texas government."

This February, Gov. Greg Abbott ordered the Texas Rangers to investigate, saying the state's residents deserve "a lottery that is fair and transparent for everyone."

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.

State lotteries like the one in Texas are in a sweet spot for the pros. The jackpots are big enough to be worth shooting for, and the number of possible combinations minimizes the risk of multiple winners. Multistate games such as the Powerball often have far bigger pots, but there are so many combinations that buying them all would be unwieldy and cost too much.

In Oklahoma, the Black Swan team recently made a play at a scratch-off game with a $5 million prize on the line. They set up at a hotel and spent three weeks scratching off tickets, but left the state without getting the top prize, according to Jay Finks, Oklahoma Lottery Commission executive director.

Maryland lottery director John Martin, on a January podcast, said of such groups: "How is this any different than an investment group buying stocks to gain an advantage over time in the marketplace? I don't know that it is. You can take a holier-than-thou attitude and say, well, 'It's not right, it's not fair.' But again it's not illegal, and it's probably not a bad business strategy."

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

Punters Club

Ranogajec was 12 years old when he began playing with a toy roulette wheel, according to a statement he gave to a Sydney court in 2012 when he was fighting Australian tax authorities over his winnings . He helped his father, a regular at a seaside casino in Tasmania, try to devise winning gambling systems.

Around 1980, while a college student, he approached David Walsh -- a math whiz who was a friend of a friend -- seeking help with blackjack probabilities. "They wanted me because I could do sums," Walsh recalled at a 2022 investment conference. "And I wanted them because they could talk to girls."

The duo soon started winning big, Walsh recalled in a 2014 memoir. They both dropped out of school, and the college gambling gang evolved into a group called the Punters Club, which pooled funds to bet on horses, slots, keno and other games.

One early score came when some friends told Ranogajec about a lottery in New South Wales with a big jackpot they could take if they found a way to buy all the numbers. Ranogajec corralled friends into filling out tickets and arranged for a newsstand to stay open all night to sell them. They won $1.2 million, minus a 10% fee to the buddies who spotted the trade.

By the mid-2000s, the Punters Club was wagering huge amounts around the world and around the clock, trying to use their data-crunching smarts to identify favorable opportunities. Ranogajec administered the finances. Walsh designed software to analyze data and max out returns, according to the Australian tax authority.

Walsh told the conference the syndicate once won $63 million on a Tokyo horse race, took down a German lottery and would frequent Las Vegas on the nights of big boxing matches to take advantage of increased betting limits at the casinos.

In 2011, Australia's tax authority said Ranogajec and Walsh needed to pay income tax on tens of millions of dollars of winnings from previous years. The case was settled under undisclosed terms.

Walsh's passion for gambling faded. With backing from Ranogajec, he built the Museum of Old and New Art, now one of Tasmania's top tourist attractions. Walsh has described the museum, which is dedicated to sex and death, as a subversive adult Disneyland.

Ranogajec never stopped gambling. In Las Vegas, where he earned a reputation as a relentless blackjack player, he is something of a legend. "Everybody respects him for what he's done, and he's also just very professional, very honest, very trustworthy," said Anthony Curtis, publisher of the Las Vegas Advisor newsletter.

Intensely private, Ranogajec has been dubbed by Australian and U.K. tabloids "the Loch Ness Monster" because he is so rarely photographed.

After getting married, he took his wife's surname, becoming John Wilson. In London, where he had moved before the tax dispute, he found a new business partner.

Marantelli had been exposed to gambling at an early age by his father, a bookie in Melbourne. He and his father would study greyhound racing videos to figure out when the odds were in their favor, he later told U.K. bookmaker Star Sports in an interview. One lesson: Always bet with an edge.

After a stint trading equity derivatives for Deutsche Bank in London, Marantelli set up an online platform in 2012 where gamblers could bet on soccer and cash out early as odds shift. Ranogajec took a stake in the business, which they called ColossusBets.

A few years later, Marantelli quietly set up another company, White Swan Data. While Colossus courted publicity, White Swan tried to avoid it. Mathematicians scoured global betting markets for opportunities, then sold advice to gamblers.

In the spring of 2023, the Texas lottery caught their attention.

'Considered cheating'

Once the teams on the ground in Texas had their ticket-printing operation in full swing, Lottery.com executive Greg Potts texted an associate: "Things are going great."

Thanks to the mass buying, the size of the jackpot was soaring. The Texas Lottery Commission put out news releases saying it was the biggest since 2010. "Lotto Texas fever is sweeping across the Lone Star State," it said.

Dawn Nettles, a self-appointed watchdog who has published the Texas Lotto Report since soon after the lottery's inception in 1992, headed out to stores in Dallas and Garland. She didn't see any evidence of lottery fever, and figured a pro gambling outfit was vacuuming up tickets. Nettles bought several dozen tickets in a long-shot bid to split the winnings.

"I said, come on God, let's let me hold the winning ticket so we split it and they don't come out with a profit," Nettles recalled.

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.

By Monday, though, Potts was urging colleagues not to mention the success in a press release they were drafting to mark the company's resumption of operations.

"This type of business is legal and compliant but is not something we publicize," he wrote. "It is considered cheating by lottery players, and we do not want to raise attention to it."

Sure enough, 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.

Yet pro gamblers, it appears, haven't lost interest.

In December, after months without a winner, the Texas lottery jackpot neared $60 million. Lotto retailers around the state received letters from someone calling himself "Adrian."

The letter outlined what it called "an unusual proposal": to "occupy your Lotto machine from store open until store close (even 24 hours a day), printing as many tickets as your vending machine has capacity." The letter writer proposed arranging for electronic payments, and to meet in person to discuss details.

Some retailers declined to get involved, while others were eager for the business.

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

Write to Joe Wallace at joe.wallace@wsj.com and Katherine Sayre at katherine.sayre@wsj.com

(END) Dow Jones Newswires

April 12, 2025 21:00 ET (01:00 GMT)

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