Prince­ton grads score mil­lions from US lot­ter­ies

Is it luck, spend­ing, or have they fig­ured how to game the game?

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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.

 ?? DC LOT­TERY ?? Manuel Mon­tori IV has been on an 18-month lot­tery win­ning streak.
DC LOT­TERY Manuel Mon­tori IV has been on an 18-month lot­tery win­ning streak.
 ?? COLIN BOYLE/USA TO­DAY NET­WORK ?? De­bra Crites, owner of Smoke ’n’ Lotto in Bloom­ing­ton, Ind., where Manuel Mon­tori bought one of the win­ning $10,000 tick­ets.
COLIN BOYLE/USA TO­DAY NET­WORK De­bra Crites, owner of Smoke ’n’ Lotto in Bloom­ing­ton, Ind., where Manuel Mon­tori bought one of the win­ning $10,000 tick­ets.
 ?? DC LOT­TERY ?? Han­nah Dav­in­roy holds a cer­e­mo­nial check for $1 mil­lion af­ter sub­mit­ting a win­ning scratch-off ticket to the DC Lot­tery in De­cem­ber. The prize was paid out to a cor­po­ra­tion called Black Swan Cap­i­tal, LL.
DC LOT­TERY Han­nah Dav­in­roy holds a cer­e­mo­nial check for $1 mil­lion af­ter sub­mit­ting a win­ning scratch-off ticket to the DC Lot­tery in De­cem­ber. The prize was paid out to a cor­po­ra­tion called Black Swan Cap­i­tal, LL.

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