USA TODAY US Edition
Princeton grads score millions from US lotteries
Is it luck, spending, or have they figured how to game the game?
A group of recent Ivy League graduates is making a run on lotteries across America.
So far they’ve won more than $6 million from lotteries in Indiana, Missouri, Washington and the District of Columbia.
Exactly how they’re doing it – and how much they are profiting, if any – remains a mystery.
The unusual winning streak first came to light in Indiana after the apparent leader of the group, a 27year-old Princeton University graduate named Manuel Montori IV, cashed in 61 winning Hoosier Lottery scratch-off tickets on a single day in September.
All of the winnings came from the same game, $7,000,000 MEGA CA$H, which sells for $30 a ticket. Most of Montori’s winners were for $1,000, but three were for $10,000, bringing his total haul to $88,000.
But that was just one day. Just one state.
Montori has been on an 18-month winning streak, or so it would appear. It includes much larger paydays and is part of a scheme that includes at least three other Princeton alumni: Matthew Gibbons, Hannah Davinroy and Zoë Buonaiuto. All of them are associated with an obscure company
Montori founded last year called Black Swan Capital LLC.
Their biggest payday came a week after the Hoosier Lottery bonanza. Montori collected a $5 million top prize from a scratch-off ticket in Missouri on Oct. 6. Other winnings identified by IndyStar include:
• $121,000 Davinroy collected from the Missouri Lottery in September.
• $1 million Davinroy collected on behalf of Black Swan from the DC Lottery on Dec. 16, 2019.
• $100,000 Montori collected from the DC Lottery on March 25, 2019.
They also had a 1-in-5 shot at another $1 million in a Hoosier Lottery second chance drawing at the Indiana State Fair last year. Gibbons was one of the finalists selected from players who submitted non-winning tickets. He didn’t win that one, but did collect a $500 consolation prize.
It’s a good bet, however, they’ve had other big paydays that haven’t come to light yet.
Their record raises several questions. Are Montori, Gibbons, Buonaiuto and Davinroy really that lucky? Have they found a way to beat the lottery at its own game? Or are they investing far more money than they are winning in a scheme doomed to fail?
‘They would clean us out’
In Indiana, the group appears to have gone on a frenzied buying spree in the final months of the MEGA CA$H game.
“Basically, they would clean us out,” said Darian Crites, a manager at Smoke ‘n’ Lotto in Bloomington, which sold one of the winning $10,000 tickets Montori claimed in September.
She said two women who identified themselves as Hannah and Zoe were involved in purchasing as many as 400 tickets at time during several visits that began in May. They said they were working for a man conducting a study and the results would later be shared on YouTube.
After emptying the store’s inventory on their initial visit, Crites said one of the women asked to be notified when a new supply of tickets arrived. The woman would then return to buy up the new tickets. The pattern continued until the lottery informed the store that the game was sold out.
Ultimately, they purchased about 1,600 tickets at a cost of $48,000, Crites estimated.
And that was just at her store. The other 60 winning tickets Montori cashed in were purchased from more than four dozen different gas stations, liquor stores and other lottery outlets all over Indiana, the Hoosier Lottery website shows. If they purchased similar amounts at each store, Montori and his group would have spent at least $2.3 million. And that doesn’t account for the time, travel or people needed to scoop up tickets from places as far flung as Mishawaka, Corydon, Indianapolis, Richmond and Terre Haute.
A winning $7 million ticket might have made Montori and his friends rich. But without the top prize, the group’s expenses may very well have exceeded its winnings in Indiana. Without knowing the size of the initial outlay, it’s impossible to know.
In other states, however, the group appears to have struck pay dirt.
This summer in Missouri, two women snatched up thousands of $5,000,000 Cash Extravaganza tickets during a series of visits to Break Time, a convenience store and gas station near a busy I-70 interchange in Columbia.
The spree unfolded as the lottery was preparing to close the game. It had been in operation for several years, but at least one of the three top prize tickets remained unclaimed as the clock ticked down.
“I know they were buying 20 books a day, three times a week here,” said a store manager who asked that her name not be used. “It was several weeks.”
Each book included 20 scratch-off tickets, which sold for $20 each. That meant the women were dropping $8,000 a visit. The manager said they paid with cash or cashier’s checks, and they weren’t just buying at Break Time.
“They were doing the same thing I think at least at two other stores,” she said. “And I think there’s another store in another town that they were doing it, buying from them, too.”
This time, the gamble paid off. Big. They found the unclaimed $5 million winner. And Montori swooped in to collect.
‘Needle in a haystack’
The group’s activity bears the hallmarks of a longstanding strategy for improving the odds to beat scratch-off games. The approach relies on publicly available data on ticket sales and unclaimed prizes to determine if and when it is advantageous to jump in and buy up tickets, several lottery experts and statisticians told IndyStar.
The Hoosier Lottery, for example, updates its website daily with information about how many prizes have been claimed for each scratch off game.
“I think a good analogy is that needle-in-the-haystack type of thing, where the more information you have, the more hay you’re likely to be able to remove, to where your chances of finding the needle are much, much better,” said Jeffrey C. Miecznikowski, a professor in the Department of Biostatistics at SUNY University in Buffalo, New York. “I think that’s most likely what’s going on here.”
But pulling such a plan off on a large scale, he said, takes a gambler’s nerve and a fat bankroll.
That may be how Black Swan Capital, LLC, fits into the picture.
Montori and Gibbons registered the corporation in Delaware on June 27, 2019. Buonaiuto’s LinkedIn page and other online sources list her as portfolio manager and director of operations from April to October. The business address listed in a report filed in January is a nondescript, white frame house next to a cemetery in Princeton. It is the same address Montori used to register to vote.
The company is classified as an open-end investment fund. If its name is any indication, the Princeton grads appear to believe they’ve found a formula for playing the odds that could shake up the lottery industry. In the world of economics, the term “black swan” refers to an extremely rare and highly consequential event that is easily explainable, but only in hindsight.
Black Swan Capital first comes up in connection with the lottery winnings in a news release from the DC Lottery in December. It shows Davinroy posing with a giant $1 million check made out to the company. The winning ticket was purchased at the same liquor store as a $100,000 winner Montori cashed in nine months earlier.
Beyond that, little is known about the company.
‘Call me back in a year’
Montori and his Ivy League chums aren’t talking about their lottery gambit. All four have avoided interviews and generally kept a low profile regarding their winnings across the country.
Montori appears to have posed for just one of the ubiquitous jackpot winner photographs. In a promotional shot for the DC Lottery, he has a big grin as he holds an even bigger check. He is wearing a black T-shirt and dark-rimmed glasses with a faint beard and hair down near his shoulders.
Public records and social media sites indicate Montori has lived in Florida and New Jersey and is the son of a prominent Peruvian businessman who lives in Florida. He has no obvious connection to Indiana or other locations where he’s won big lottery prizes.
He attended the Phillips Exeter Academy in New Hampshire, one of America’s most elite boarding schools and alma mater of President Franklin Pierce, 19 U.S. senators and Facebook founder Mark Zuckerberg. He was co-president of the Republican Club and on a fourmember team that won the Yale University Economics Association’s annual High School Economics Competition during his senior year.
At Princeton, he majored in philosophy. He graduated in 2017 and landed a job as an analyst at the Princeton University Investment Company, which manages the New Jersey school’s endowment.
Montori did not respond to phone and email messages from IndyStar. Attempts to reach him through his family and Gibbons were unsuccessful.
It was at Princeton where Montori appears to have met his partners in the lottery scheme. Like him, they’re young, smart and come from affluent backgrounds.
Gibbons, 26, is from Short Hills, New Jersey, and was an Eagle Scout. He was elected president his senior year at Delbarton, a private Benedictine preparatory school for men in Morristown, New Jersey, where he played golf and was an Advanced Placement Scholar. He majored in computer science and history at Princeton, then went to work for ZX Ventures, a New York City investment banking company.
He declined comment when contacted by phone on Nov. 2. “I’d rather not speak to a reporter,” he said. He locked down his LinkedIn page later that day.
Davinroy, 25, was an honor student and captain of the track team her senior year at Centaurus High School in Lafayette, Colorado, a wealthy suburb about 10 miles east of Boulder. She studied physics at Princeton, graduating with Montori and Gibbons in 2017. She then got a job in New York at BloombergNEF, which provides research on clean energy, advanced transport, digital industry, innovative materials and commodities.
She did not respond to a phone message or attempts to reach her through family and social media.
Buonaiuto, 29, attended Piedmont High School in the San Francisco Bay area and studied history and French at the University of California, Los Angeles. She entered a graduate history program at Princeton in 2013 and earned her Ph.D. in 2018.
She declined to comment when contacted by phone. “Call me back in a year,” she said. “I’m happy to talk to you in a year. ... It’s exciting.”
‘Shooting in the dark’
Even if the group developed a system for using public information to improve their odds, experts expressed skepticism that it could result in reliable profit.
For example, the odds of winning the $7 million jackpot in the Hoosier Lottery scratch-off game was about one in 2,691,807. Even if the group improved those odds and purchased thousands of tickets, they would still face a significant risk of missing the jackpot.
“That would still be shooting in the dark with better odds, but not with a real strategy for winning,” said Phillip Stark, a statistics professor at the University of California-Berkeley, who studies lottery odds.
“Somebody doubled their odds, but they haven’t made their odds into a reasonable investment.”
How much players can improve their odds “depends a lot in terms of how much information you’re bringing into the problem,” said Miecznikowski, the SUNY biostatistician.
“To win multiple jackpots, I think it’s incredibly rare. But there’s a lot of variables that go into that in terms of how many tickets are they buying and so on,” he said. “I don’t know how they’re doing it, but they must have access to information most likely that the average person doesn’t ... my guess is that (lotteries) are not putting out enough information that you could use some fancy data science algorithms to figure this out.”
The lotteries, however, do not seem concerned about the group’s winning streak.
‘Nothing out of the ordinary’
The four participants have not been accused of any crime. In fact, lottery officials in Indiana, Missouri and the District of Columbia told IndyStar that Montori and Davinroy, like all major prize winners, were vetted before receiving their winnings.
“We have not conducted an investigation that fell outside our standard clearance processes for big winners.” Wendy Baker, communications manager for the Missouri Lottery, said in an email to IndyStar last week.
Lottery officials said there is nothing wrong with players using data about the number of prizes outstanding during the lifetime of scratch-off games, which is regularly updated online.
“We do it so that there’s transparency to our players, so they understand what tickets that they’re playing and what money still left on those tickets. It’s an industry standard,” explained Nicole G. Jordan, director of marketing and communications for the DC Lottery.
Jordan said the information also can be a resource for players, if they choose to use it. “Some people are better gamblers,” she said.
“So they’re looking to see what top prizes are still available.” It is not uncommon for some players to buy large numbers of tickets, she added, but the amount purchased by the Black Swan group is not something most individual players could do.
And just because a prize hasn’t been collected doesn’t necessarily mean the ticket is still in the field, said Baker, the Missouri Lottery spokeswoman.
“Until a Scratchers top prize is actually claimed at one of our offices,” she said, “we don’t know if a top-prize ticket has been sold or whether it’s sitting in someone’s safe deposit box or has even accidentally been thrown away.”
Julie Henricks Mahurin, director of public relations for the Hoosier Lottery, said Montori’s 61 claims were received and approved “consistent with our statute and administrative rules.”
She said it’s not uncommon for a player to submit several winning tickets.
There are several potential explanations, such as tickets being purchased over an extended period and/or an individual claiming on behalf of a group.
“There was nothing out of the ordinary on the way this game was designed,” she said. “As is indicated on each ticket and on the Hoosier Lottery website, scratch-off tickets with higher price points (such as the $30 ticket you mention) tend to have better overall odds.”
At this point, it’s impossible to know exactly how much Montori and his pals have profited from the $6 million they’ve collected so far.
They appear to have spent tens of thousands of dollars, if not much more, and may have lost money in Indiana.
The answer, like the explanation of a Black Swan event, will apparently only be revealed by the benefit of hindsight.