If you ask a clever advantage player about the lottery, he'll most likely laugh in your face. It doesn't take James Grosjean to figure out that the lottery is just for suckers, dreamers, and grandmothers. After all, winning the ultimate prize has a 1 in 292-million chance of happening. To put things in perspective, your chances of being struck by lightning in your lifetime are 1 in 3,000. Fortunately, none of this information was shared with Stefan Mandel. He might not have gone on to become the world's most successful lottery player if it hadn't been for that.
Mandel has taken down 14 lotteries in at least three countries, raking in more than $40 million by relying on skill rather than luck. However, like any excellent AP, he tries to minimize his genius. He told the Romanian magazine Night & Day,
"I'm a weekend mathematician." “I'm an accountant with an excessive amount of education. However, properly used mathematics can ensure a fortune.”
He was working as a numbers cruncher for a big mining business at the time, hoping for a higher score that would allow him to live a more luxurious life. Perhaps it would even get him out of Romania, which was not the best place for smart Jews at the time.
Mandel began to concentrate on the state lottery for whatever reason. In the same manner that Edward O. Thorp attacked the supposedly unbeatable game of blackjack, he dissected it and looked for edges. Mandel, unlike Thorp, did not have access to a university's room-sized computer. He only had his mind, intellectual ambition, and the desire to make a difference in his life.
With the help of friends who believed in Mandel's brilliant mind, he was able to purchase the tickets and perform better than predicted. Mandel and his investors won first place thanks to a lucky chance. This netted them $30,000 in Romanian leu. Mandel was left with $5,000 in leu after paying taxes and mailing money to his investors, which equates to nearly $40,000 today.
This windfall may not appear to be a fortune, but it was the equivalent of eight years' wages for the ordinary Romanian at the time. Mandel was able to smuggle himself out of his motherland with the money. Before arriving in Israel, he spent the following few years traveling around Europe - and we wouldn't be surprised if he used his mathematical prowess at casino games across the continent. Mandel studied economics at Haifa University and graduated with a bachelor's degree.
Mandel had made his way to Australia by the 1980s. He was a homemaker who worked as an accountant and invested in precious metals. While he never forgot about the lottery, winning a drawing with 45 numbers and over 8 million possible combinations must have seemed impossible – even to Mandel.
What Was Mandel’s Idea for Winning the Lottery?
Stefan Mandel's concept was fairly straightforward, if you think about it. What is the only strategy to boost your odds of winning the lotto that has been proven? It's about getting more tickets.
Consider a lottery game in which the chances of winning the jackpot are 1:10,000,000. Even buying 1,000 tickets would only reduce your chances to 1:10,000, and those slips would be quite expensive. Mandel realized this, which is why he worked on the most effective mathematical formula to win.
Finally, he had an epiphany: he doesn't have to go for the jackpot. Instead, winning the second prize, which required accurately guessing five out of six numbers, would suffice. Stefan didn't have enough money to go on this trip, but he was able to persuade a few individuals to join him. He purchased a large number of tickets and hoped for the best.
Establishing a Company and Playing the Lottery
So he went back to the books and created a new algorithm. Mandel was able to cut the number of tickets required from 8 million to 3 million as a result of this one. It was more difficult, profitable, and a highly classified secret (Mandel never released details on phase II of his lottery-beating strategy). It seemed unbelievable as well.
Mandel, equipped with the indisputable reality of mathematics, understood better. He has stated that “not all lotteries are profitable from the player's perspective.” “The only guaranteed way to win is to consider every option. The one in Sydney allowed me to put up $7 million in exchange for a chance to win $27 million.”
Mandel was able to obtain investors for his project thanks to his clear-headed thinking. And technology helped the process in a way that it would not have been otherwise. It was 1987, and personal computers were becoming more widely available. He utilized them to finalize the specifics and print the millions of forms needed to purchase the tickets.
“When I announced [in 1987] that I would take the big prize in the Sydney lottery, everyone told me, ‘You won’t succeed,’” Mandel said. “I got angry and won the big prize 13 times in a row, with $400,000 in smaller prizes.”
Nobody seemed to take him seriously the first time. The Australians, on the other hand, passed a new law after realizing Mandel is a serious businessman. A single person could not purchase all of the tickets for a certain draw. The Australian government was enraged as well, and modified lottery legislation to prevent Mandel from continuing to beat the game. He was undeterred, and he set his sights on America. He concentrated on the Virginia lottery in particular. According to the Washington Post, his case is that “Virginia boasted fewer number combinations than other lotteries... According to the Virginia lottery's laws, it would cost only $7.1 million to buy every ticket” – which could be printed out at home in Australia.
However, the reward money has to be substantial enough to justify the expenditure. As a result, Mandel waited patiently and kept an eye on the pools.
Mandel pulled the trigger and set his plan into action as soon as one hit $27 million — with only three days to buy some 7-million tickets.
Thirty computers were used, as well as a dozen laser printers. To make all of the tickets, Mandel told
"How'd They Do It" that he required "20 or 30 tons of paper."
Then he spent $60,000 to have them flown from Australia to the United States aboard a private jet. A group of accountants boarded the ship to transport the tickets to lottery retailers and pay for those that had already been printed.
It went off without a hitch – until Mandel and his crew ran out of time and were only able to purchase a few million tickets at the time of the drawing. Even though the Virginia lottery was no longer a sure thing, Mandel remained a favorite, and everything went according to plan. He and his team took home the grand prize, as well as a million dollars in other awards.
The arrangement benefited Mandel – he received a $1.7 million fee for organizing everything – but it did not benefit the investors: those who put in $4,000 received only $1,400 after expenditures and taxes. Mandel was inspected by the US government, and the Virginia Lottery Commission tried to avoid paying him. The authorities had no choice but to make good on the money once it became evident that he had done nothing illegal. However, the rules have changed, and a Mandel-style gambit will never be possible again.