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