Algorithm helps Romanian man win lottery 14 times

In the 1990s, Romanian-Australian economist Stefan Mandel and his colleagues played the lottery and won repeatedly.

Stefan Mandel in a photo he shared on his personal page in 2020. Photo: Twitter

In the late 1960s, young economist Stefan Mandel struggled to make ends meet. His salary was only around $10 a month, barely enough to meet basic needs. He needed a quick way to make a lot of money and decided to buy lottery tickets. With an innate aptitude for numbers, Mandel spent his free time analyzing articles on the probability theory of the 13th-century mathematician Leonardo Fibonacci. After years of research, he wrote a "number selection algorithm" based on a method called "combinatorial condensation."

Accordingly, if a player chooses 6 numbers from 1 to 49, the odds of winning are 1 in 13,983,816. If that person chooses 15 numbers, the chance of winning increases to 1 in 2,794. With his algorithm, Mandel was certain he could at least win a second prize along with hundreds of smaller prizes, and the chance of winning the jackpot was 1 in 10. Mandel partnered with four friends, each buying 228 lottery tickets. He was lucky enough to win the jackpot worth approximately $2,000 at the time. After deducting expenses, he had enough money to take his wife and children abroad. After four years wandering across Europe, Mandel settled in Australia and began playing the lottery in a different way.

Mandel realized something: In some lotteries, the jackpot is three times the cost of buying every possible set of numbers. For example, a lottery requires choosing 6 numbers from 1 to 40, meaning there are 3,838,380 possible combinations. At one dollar per ticket, buying every possible combination would cost over $3.8 million. But if the jackpot is $10 million, after taxes, the player would still make a huge profit.

In a regular lottery, a set of numbers is randomly selected from a sequence of numbers, for example from 1 to 50. If a player chooses a set of numbers that matches the result, they win. But Mandel noticed that in some lotteries, the jackpot is three times the cost of buying every possible set of numbers. For example, a lottery requires choosing 6 numbers from 1 to 40, meaning there could be 3,838,380 possible sets of numbers. With each ticket costing one USD, buying every possible set of numbers would cost a player $3.8 million. However, they would still make a huge profit if they win the $10 million jackpot (after taxes).

Mandel's strategy was successful. He and his investors won the lottery 12 times in Australia during the 1980s. However, his methods quickly attracted the attention of Australian authorities, who introduced new regulations and laws to prevent Mandel from continuing his streak of winning. But 13 lottery wins in Australia and Romania weren't enough for Mandel; he set his sights on the Virginia state lottery in the United States.

Over time, Mandel convinced hundreds of investors to pool their money, promising them a share if he won the lottery. He then developed an automated system: a room filled with printers and computers running algorithms that printed out every possible combination of numbers. The computers revolutionized Mandel's process. Previously, he was limited by having to manually write out millions of combinations; a single mistake could ruin eight months of work. But now he could delegate the task to a machine.

In the 1980s, Mandel and his investors won the lottery 12 times across Australia, including a $1.1 million prize in 1986. His consecutive wins prompted Australian authorities to change lottery regulations. Therefore, Mandel set his sights on the bigger picture: lotteries in the United States.

At the time, the Virginia lottery had several advantages. Being relatively new, players could buy an unlimited number of tickets and print them themselves at home, then take them to places like stores or gas stations to redeem. Most importantly, the number range was limited to 1 to 44 (other states had up to 54). Players chose 6 numbers from that range, corresponding to 7,059,052 number combinations, far fewer than the usual 25 million combinations. At one dollar per ticket, Mandel would have needed to spend nearly $7.1 million to be sure of a winning ticket.

Mandel convinced 2,560 investors to pool their money. At a warehouse in Melbourne, Australia, he set up 30 computers and 12 laser printers, and hired 16 full-time employees to print millions of lottery tickets with every possible number combination over a three-month period. He then shipped a ton of tickets to Virginia, USA, at a cost of $60,000. However, Mandel had to wait for the jackpot to reach a high enough value to be profitable after deducting taxes, expenses, and investor interest payments. On Wednesday, February 12, 1992, when the Virginia lottery jackpot reached $15.5 million, Mandel and his partners decided to act. The drawing took place on a Saturday, meaning they had three days to buy 7.1 million tickets.

Mandel enlisted businessman Anithalee Alex Jr. to send dozens of people to gas stations and grocery stores to pay for all the lottery tickets with checks. The process went smoothly for two days. However, on the final day, just hours before the deadline, one establishment stopped paying out the lottery tickets. They were unable to claim their 140,000 tickets (corresponding to 700 sets of numbers). In the end, they only had about 6.4 million sets of numbers in their possession. Winning the jackpot still depended partly on luck.

On February 15, 1992, luck smiled upon Mandel and his associates; they won the $27 million jackpot and nearly another million dollars from smaller prizes. After taxes and fees, each investor received approximately $1,400, while Mandel himself paid his consulting fees of $1.7 million. A total of 14 international agencies, primarily from Australia and the United States, launched an investigation into Mandel, including the CIA, FBI, IRS, the UK National Crime Agency (NCA), and the Australian Security Commission. Ultimately, they concluded that Mandel had not committed any crime.

A few years later, in 1995, Mandel declared bankruptcy. He spent a decade involved in various investment projects, but without success. Today, Mandel lives a peaceful life in a beachfront house on the tropical island of Vanuatu and no longer gambles.

An Khang (According to IFL Science )

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