Stefan Mandel: How math genius outsmarts lottery for over $27 million

One way to ensure a lottery bet will pay off is to play every possible number combination for that game. However, that’s easier said than done as there can be millions of possible number combinations.

Which is an absurd strategy, unless you come up with a math-based algorithm that can pare those odds down to a manageable size. Still not easy, but that’s exactly what one amateur mathematician from Eastern Europe did.

Stefan Mandel is an economist who won the lottery 14 times using a math algorithm he created. Born in communist Romania, Mandel used his first winnings to buy his way to freedom. In Australia, he won 12 jackpots and one in America, earning over $27 million before officials shut down his strategy.

Using a strategy like Mandel’s to “game the system”—winning lottery after lottery—raises questions. There’s a vague feeling that cheating might be going on somewhere. But if it’s legal, is it really wrong? More importantly, is it something that anyone could do? In this article, we’ll reveal Mandel’s strategy and answer that question.

The mathematician who outsmarted the lottery

In the late 1960s, the Union of Soviet Socialist Republics (USSR) dictated the destinies of millions. Countries like Ukraine, Georgia, and Romania kept a watchful eye on the most insignificant doings of their citizens. Almost every aspect of daily life was rigidly controlled, and the chances of becoming truly successful were slim.

Many of the people born in the former Soviet Bloc would live out their lives in a dingy grind of poverty, fear, and loneliness.

It was no different for Stefan Mandel, an outwardly average young Romanian man with more hopes than prospects. Although trained for a lucrative-sounding profession—economist—Mandel was hard put to keep body and soul together on a salary equivalent to $10USD a month.

He needed a way to, “get some serious money, quickly.” But how?  

Mandel had two hobbies when he wasn’t trying to make every cent count. He read papers on advanced mathematics and watched the Romanian lottery. There had to be some way to make order out of chaos.

The lottery was just math, after all, probability and averages, numbers and odds. Surely there was a way to ensure a win.

After several years of diligent research, Mandel was sure he’d cracked the lottery code.

Combinatorial condensation theory 

Really, that’s just a fancy-pants way of saying, “mathematical risk reduction to allow high-volume betting.” Like a few others who’ve made a habit of beating lotteries, Mandel’s method required the right game, the right odds, and the right number of investors.

His winning formula was easy enough to understand:

First: A jackpot had to be three times larger than the possible ticket combinations.

Second: He had to buy tickets for all those possible combinations.

Third: Find people smart enough (or desperate enough) to take a chance with him by becoming investors.

Fourth: Share the profits with these investors.

No matter the logic behind Mandel’s strategy, the reason most people don’t really game the lottery is because the odds are astronomical. In a game where you pick numbers between one and 40, and six numbers are needed to win, there are 3,838,380 possible number combinations.

However, the algorithm that Mandel had worked out reduced the number of combinations he needed to play to only 5,005.

One problem. He didn’t have the money to buy the huge number of tickets to make his strategy work.

So he asked four of his friends to go in with him, forming his first lottery pool (also known as a lottery syndicate). The idea was they would each be reimbursed for their initial investment in lottery tickets, and then split the remaining profits equally.

The broke Romanians didn’t have enough money to cover all the number combinations, but they were desperate enough to each buy 228 tickets per draw.

With some incredible luck, and Mandel’s algorithm, they did better than they’d hoped, winning roughly $19,000.

After covering expenses and splitting with his friends, Mandel wound up with $3,700, cash. He would’ve had to work 18 years to earn that much in a regular job in Romania.

Need more details on how Mandel accomplished his lottery-busting strategy? This humorous and well-done video from NPR highlights everything you need to know:

A new life for Stefan Mandel

Mandel used his winnings to bribe the right officials to look the other way. He and his family — wife and two children — emigrated to the West.

For about four years, it seemed that Mandel had gotten all he wanted out of the lottery. He traveled around Europe, enjoying his newfound freedom. Then, he moved to Australia.

Australia’s national lottery seemed to match the requirements to put his method into play.

Only this time, Mandel wasn’t about to settle for anything less than a guarantee.

How Stefan Mandel mastered Australia’s lottery

No longer broke and desperate, Mandel double-checked his combinatorial condensation algorithm against the rules of the Australian national lottery and prepared to play to win.

However, he first had some barriers he needed to overcome. Australia’s lottery required choosing numbers manually, and since Mandel was playing all the number combinations, it was physically impossible.

And even though he had his freedom in the West, he still didn’t have enough money to buy enough tickets to guarantee victory. So, he went back to his original solution of creating a lottery syndicate with investors.

Once he had the money, he invested in printers. At the time, it was legal to print your own lottery play slips at home, and Mandel printed millions.

Using this system, Mandel won. And won. And won.  

How much money did Stefan Mandel win playing the lottery?

It’s estimated Stefan Mandel won over $27 million from 13 different lotteries in Australia and the U.S. It’s difficult to know exactly how much Mandel personally made from his lottery algorithm. For one thing, he never kept 100% of the profits since he shared the proceeds with lottery pool members.

Mandel reputedly refused to play until the jackpot got bigger than three times the cost of buying all possible combinations (at least all combinations dictated by his special algorithm).

Most of his Australian jackpots were fairly small, with one of his biggest single wins being a $1.1 million prize in 1986. He also often won second and third-tier prizes as well, which raised the overall value of each game.

His largest single win was in the Virginia state lottery. Playing that lottery long-distance required 16 employees to run 30 computers and 12 printers. The resulting one-ton of lottery tickets cost $60,000 to ship to America.

Mandel also set up offshore bank accounts in Hong Kong and created his lottery pool in the image of a “10-year insurance policy.”

Using a point-man, Mandel managed to legally purchase all the right tickets. His strategy paid off. He won:

  • The $27,036,142 Virginia lottery jackpot prize, plus,
  • $900,000 in secondary prizes

How Stefan Mandel changed the lottery game forever

There’s a great line in the classic movie The Sting: “What was I supposed to do? Accuse him of cheating better than me in front of the others?”

Everyone admits that lotteries are an impractical and improbable way to get rich. The odds of winning are astronomical, and the highs that habitual players get can become a type of drug. The only ones who win consistently are the ones who set up the lottery, usually the government.

The house doesn’t like to lose. At least, not consistently to the same person who is somehow working the game better than they do.

Maybe it’s the loss of revenue, although some lotteries actually benefit from the increased business of gamers like Mandel. Maybe it’s just pride: the frustration of having someone beat you.

Whatever the reason, Mandel’s consistent winning streak annoyed the authorities in Australia to the point of changing national law multiple times. Repeated investigations showed that what he was doing wasn’t—technically—illegal. However, it wasn’t in the spirit of the lottery game either.

Politicians first made it illegal for one person to buy all the tickets. Mandel then started buying tickets in the names of his investors.

Then it became illegal to print out your own tickets at home.

Could you use Mandel’s methods today to win the lottery?

Mandel’s last victory, in Virginia, managed to irritate both the CIA and FBI. And while they never found him to be guilty of anything, Mandel had created a new problem which did put him out of business. Some of his 2,524 investors were becoming increasingly disenchanted.

Mandel’s advertising for his investors had promised payouts that would be sixfold the amount invested (with the minimum outlay of $12,500). Yet, individual investors received around $1,400.

Meanwhile, Mandel paid himself a consultant’s fee of $1.7 million.

Whether because of the astronomical odds of calculation, increased regulations, or wariness by potential investors, winning the lottery Stefan Mandel’s way is highly unlikely in today’s world.

Since Mandel’s staggering jackpot wins, both Australia and the United States have enacted laws preventing a person or syndicate from purchasing every single number combination.

Did Stefan Mandel lose all his money?

Stefan Mandel declared bankruptcy in 1995. Some of his money woes were likely caused by the legal expenses he faced defending himself from numerous lawsuits and legal inquiries into his lottery-winning strategy.

Today, he reportedly makes his home in a beach house on one of the tropical islands of Vanuatu—a country about 1,100 miles east of Australia.

Not exactly a lifestyle that suggests money problems.

Mandel might’ve been on the up-and-up. It appears he never spent any time in prison, despite multiple encounters with the law. People in his lottery syndicates did get paid… just not the vast sums Mandel promised. And no one was hurt. Even the lottery didn’t suffer too badly.

He was a man born under an impossible system who beat the odds to become not only free, but wealthy.

He was a family man who made a good living gambling. He was a businessman who had investors to manage. Yet the taint that he might have been some kind of conman never totally went away.

Whether that was because of secretive offshore bank accounts, or the sheer improbability of what he was doing, we may never know. What we do know is that Stefan Mandel beat the lottery 14 times in three different countries, and — now pushing 90 — he reportedly lives in quiet retirement in a tropical paradise.

Suzanna Fitzgerald

Suzanna Fitzgerald is a professional content writer specializing in crafting your stories into irresistible online marketing blueprints.

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