The Odds Of Winning The Lottery Are Not Good, But This Man Managed To Flip Them
AILSA CHANG, HOST:
Tonight's Mega Millions jackpot is at a record $1.6 billion. Audie, I don't know about you, but I have not even bothered buying a ticket because I'm a total pessimist about the lottery. I don't even try anymore. What about you?
AUDIE CORNISH, HOST:
I've got to admit, I'm actually risk averse.
CORNISH: Also, I don't believe any - like, does anyone think they're really going to win? I don't know.
CHANG: I mean seriously, mathematically speaking, the odds are ridiculously against us. However, our next story is about a guy who flipped those odds over and over again. Here's Alex Goldmark from our Planet Money podcast.
ALEX GOLDMARK, BYLINE: It's 1992 in Virginia. The pot was $27 million - big for the time. And when a winner comes forward, it seems like something is unusual, that someone managed to buy every single combination of tickets to guarantee a win. And this totally perplexes the people who run the lottery system, like Ken Thorson. This is him on TV shortly after.
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KEN THORSON: The very idea of spending over $7 million to buy all the shares in the lottery just seems preposterous.
GOLDMARK: The man behind the plan was Stefan Mandel. I tracked him down a couple of years ago the last time there was a big lottery jackpot.
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GOLDMARK: He was living on an island in the South Pacific, Vanuatu.
STEFAN MANDEL: Hello.
GOLDMARK: Hi. Is this Stefan Mandel?
GOLDMARK: He says that Virginia thing, it took decades to get to that level. The story starts in Romania. In the late 1950s, Stefan Mandel has a young family, and he wants to get out of the country.
MANDEL: I mean, you know, I was earning, at the time, something like 360 lei a month, which was equivalent of a good pair of shoes (laughter).
GOLDMARK: He decides the lottery is his way out. He's a pretty natural math whiz. So he goes to the library, and he starts reading math paper after math paper. And he realizes something about the lottery there - that if he buys certain blocks of tickets in certain combinations, he can guarantee himself at least a second prize. So he pools his money with three friends, and he buys the tickets.
MANDEL: We won 72,783 lei, which was the equivalent of about 18 years of salary.
GOLDMARK: All right, big score. That was on your first try.
GOLDMARK: He takes the money, and he leaves Romania for Australia. He finds more investors. He raises more money, enough to buy all the combinations of numbers for the bigger Australian lottery. And he turns lottery winning into a business for a while.
MANDEL: In Australia, I won 12 times.
GOLDMARK: Eventually, Australia passes a law that blocks him from buying up all the tickets, so he sets his sights on the big prizes in America. He decides Virginia is the place. At the time, there were 7.1 million combinations of lottery tickets. He waits until the jackpot is 25 million or above to make sure that he still turns a profit, even if there's a split pot. The biggest problem with buying all the tickets, though, isn't money. It's logistics - filling out millions of tickets, each one different; keeping track of where they are so you can find the winning ticket; and then turning them all in.
So his secret was get the tickets ready ahead of time. Back then, it was legal to print your own tickets already filled out. So he set up printers going for over a month making the millions of tickets then negotiated with stores across the state to let him turn in stacks of 10,000 tickets at a time - and waited.
MANDEL: I knew that I would win one first prize, six second prizes, 132 third prizes and thousands minor prizes.
GOLDMARK: He says he couldn't do it again. Lotteries have now added extra numbers, and there are just too many combinations. So the great lottery play of 1992 will likely stay the last great lottery play.
Alex Goldmark, NPR News. Transcript provided by NPR, Copyright NPR.