A modest, government-owned demountable building in the Sydney suburb of Mosman is an unlikely place to expect to find "the Joker", the biggest gambler in the world, paying rent of just $100 a week.
In reality Zeljko Ranogajec, whose secretive world-wide gambling operation turns over more than $3 billion per year, rents one of his Sydney mansions to radio shock jock Kyle Sandilands. And the betting colossus currently resides in the world’s most expensive apartment block - One Hyde Park, in Knightsbridge, London.
Occupied by the world’s uber wealthy, one of the 86 apartments is currently for sale – its asking price $90 million. Other apartments have sold for twice that amount.
Commonly known only by his first name, Zeljko shares the same birthday - May 22, 1961 - and lives at the same addresses as a John Wilson. It is under the name John Wilson that Zeljko is on the verge of making an even greater fortune.
According to corporate records in the UK, John Wilson has a controlling interest in Colossus Bets. As of July, Colossus Bets will join forces with 55 racecourses to run British horse racing pools. The new venture, to be called BritBet, will challenge the UK Tote, whose decade-long monopoly ends in July.
After a fight with the Australian Taxation Office, the reclusive Zeljko moved his gambling headquarters to the Isle of Man, a tax haven in the Irish Sea off the coast of Britain. In early 2012, not long after his arrival, he set up Colossus Bets with Bernard Marantelli, the son of a Victorian bookmaker.
Every minute of every day, Zeljko’s gambling syndicate wagers on the outcome of sporting events all over the world. His outfit employs mathematicians, data analysts, computer scientists as well as racing observers to gain an edge. Once his algorithms have detected a pool or a jackpot reaching a certain amount, his syndicate, known as "the Bankroll", swoops.
But it is not successful wagering that is earning the Bankroll a fortune. It is the clandestine receipt of kickbacks from gaming companies, which effectively means that the likes of Zeljko can’t lose.
Fairfax Media can confirm that one of those to provide kickbacks or "rebates" to Zeljko and other leviathan punters is ASX-listed wagering company Tabcorp.
"It’s common knowledge that rebates are offered by totes around the world to high-volume customers," a Tabcorp spokesperson said.
Citing "commercial" considerations, the gaming company wouldn’t confirm the amount it rebates to Zeljko, who is widely believed to be its biggest client. Nor would Tabcorp disclose how much had to be wagered per annum to get a rebate.
Industry insiders estimate Tabcorp is giving Zeljko a kickback of between 8 and 10 per cent. So even if Zeljko’s syndicate makes a 2 per cent loss on betting, it is well ahead of the average punter when rebates are taken into account.
How it works
One of the Tabcorp’s products is the lottery-style game of Keno. Gaming experts say that, of the 44 Keno jackpots that have gone off in pubs and clubs in Australia over the past year, Zeljko’s syndicate or other big players appear to have won 40 of them. Tabcorp disputes this claim. The pattern is the same.
Take the jackpot that went off on March 29. Punters were spending a total of just above $900 per game until the jackpot grew to over $18,000 making it mathematically attractive to big punters. Suddenly the turnover surged 15-fold to above $13,400 per game. That amount was wagered on each successive game until the jackpot of $26,517 went off on game 503.
With Zeljko rumoured to be buying up 90 per cent of the tickets, the odds are heavily stacked against the average punters who don’t have his massive bankroll or computer algorithms at their fingertips.
The amount Hobart-born Zeljko is betting with Tabcorp and other gaming operations around the world is estimated to be in excess of $3 billion.
The size of the operation spilled into the public domain in court a decade ago.
"How much does the syndicate turn over per year?" Federal Magistrate Rolf Driver asked Zeljko, who in 2008 was making a rare public appearance as he moved to bankrupt his former business partner in a wagering company.
"My guess would be $1 billion," was the answer.
The magistrate could hardly believe his ears. "One billion?" he asked incredulously.
"One billion dollars, yes," Zeljko replied.
"We’re called Bankroll – Bankroll Punters Club, that’s what we call ourselves," Zeljko told the court. "Customers that bet on our level number in the handful in the world," he said matter-of-factly.
But, as he explained to the court, it wasn’t winning that kept them way ahead of the average punter – it was the rebates or "loyalty payments".
"It’s very simple," Zeljko told the court. "If you bet $100 and lost $5, but you get a 10 per cent rebate, you still make 5 per cent."
"You always win," he said. "I’m telling you that, if you bet very large, it’s a pari-mutuel pool, you depreciate it so far that you end up getting under fair odds. If you fix something at $8, you get six, but if you get a rebate that puts you into the positive."
A reclusive tsar
Nicknamed "the Loch Ness Monster", the gambling tsar is rarely seen. He uses a series of corporate mazes and front people, including a self-employed seamstress from Tasmania and a former technology writer for The Age and the Herald to make sure he remains in the shadows.
Instead of a self-portrait on his locked Twitter account, there’s a picture of his million-dollar sports car, a Lamborghini Aventador coupe with the Sydney Harbour Bridge in the background.
His Twitter profile states simply: "Allegedly the worlds (sic) biggest punter and high stake professional gambler."
The Punters Club
Zeljko’s move to the Isle of Man followed a spectacular clash in 2012 with the Australian Taxation Office, which was pursuing Zeljko and the 18 other members of what that ATO came to refer to as The Punters Club. The ATO was chasing the Tasmanians for close to $600 million in taxes and penalties. The syndicate argued that theirs was not a business and therefore no tax was payable on their gambling winnings.
After the syndicate settled with the ATO on terms not to be disclosed, The Australian Financial Review obtained a document that revealed that, as early as 2003, the Punters Club was concerned about being interrogated by the ATO.
The document suggested that, should members be asked how much the syndicate wins, the punters should answer that "no records are kept therefore difficult to estimate turnover or profit and I would prefer not to make a guess".
The punters were also schooled to say they "are not aware of all the members" of the syndicate, would need to check who distributed the funds and which bank account they came from, the Financial Review reported.
Some of the members - including Mark Davies, Elizabeth Aitken and Zoe Davis - are current shareholders in Colossus Bets.
Caught up in the ATO stoush was Zeljko’s closest friend David Walsh. The pair met during their university days in Tasmania. Walsh’s privately-owned Museum of Old and New Art (Mona) in Hobart owes its existence to Walsh’s complex feelings of guilt about deriving his fortune from the Punters Club.
"Winning gamblers," he wrote in his 2014 autobiography A Bone of Fact, "end up with money but have achieved nothing else.
"It’s fair to argue that I built Mona to absolve myself from feeling guilty about making money without making a mark," he wrote.
In 2009, when Walsh was struggling with Mona’s monthly construction costs, Zeljko "decided to go for broke" on the Melbourne Cup because of the size of the pool, Walsh said in his book.
While he mentions no figures, Walsh was reputed to have collected $17 million when the Mark Kavanagh-trained Shocking romped home.
Kicked out of casinos
From the early 1980s, the mathematically-gifted Walsh provided the solutions to Zeljko’s entrepreneurial bent for gambling. Initially Walsh’s calculations were deployed to lethal effect on the blackjack tables at Wrest Point Casino in Hobart.
In May 1984, they were banned for counting cards.
Correspondence obtained by Fairfax Media reveals that the then 23-year-old Zeljko vigorously disputed his banning.
"I have considered the Rules of Blackjack and I will be pleased if you will let me know on what basis the application of 'card counting' to the game of Blackjack has been ruled un-natural (sic) play," complained his solicitor Damian Bugg, who later became the Commonwealth Director of Public Prosecutions.
The Acting Commissioner for Gaming said that card-counting gave the player an advantage over "the house" as memorising cards enabled players to predict the odds when it came to betting on a particular hand.
Zeljko was also kicked out of Jupiters Casino on Queensland’s Gold Coast on its opening day. The former head of security confirmed they had a handwritten file note identifying Zeljko, also known as "the Joker", as a "known card counter".
Walsh described the late '80s as tough years. Following their casino banning, Zeljko, his wife Shelley Wilson, whom he’d met at the casino, and Walsh moved to Sydney. The trio kept themselves afloat with forays to Korea to play blackjack while they refined their gambling systems.
By 1994, they were betting millions of dollars a week on lotto, Keno, the horses, and the greyhounds.
In July of that year, an audacious but calculated betting splurge saw him splashed over the front page of The Sydney Morning Herald. Dubbed "the King of Keno", Zeljko was aware that the jackpot at North Ryde RSL had reached $4 million. For six days straight he ploughed an estimated $10 to $13 million to win the $7.5 million jackpot. Since Keno returns players smaller wins of about 48 per cent of their outlay as an incentive to keep betting, Zeljko ended a few million dollars ahead.
'He backed the whole field'
One racing insider pointed to Zeljko’s shadowy presence in the betting on the world’s richest turf race, The Everest. Last October, the 1200-metre sprint at Randwick had a jackpot of $600,000 to pick the first four horses. When the race jumped, the pool had about $1.5 million. By the time the race was finished, $1.5 million more had flooded in from the Isle of Man.
Zeljko "crushed" the pool, the racing insider said. "He was almost guaranteed a win because he has backed the whole field … as well as collecting a rebate of $150,000."
Even if the Bankroll syndicate merely breaks even or slightly loses, it is still coming out ahead because of the rebates. And the more that is returned to Zeljko’s punters' club, the less is left in the pool for the average punter.
And this is what is about to make the reputed billionaire even richer. To date, Zeljko/Wilson’s British company Colossus Bets has operated as a pool betting product, which allows punters to predict the scores and outcomes of sporting events. The amounts staked are placed into a pool, and winning players receive the pool amount less any deductions.
"Colossus Bets offers the world’s biggest sports jackpots, featuring top-tier European football and headlined by weekly multi-million prizes," its website claims.
"World-domination is our plan, making our million-pound plus pools a leader in the sports betting and lottery market for years to come," chief executive officer Bernard Marantelli says on the Colossus website.
British gambling experts suggest that Colossus will take out 20 per cent of the pooled funds before the winnings are paid out. Zeljko has a controlling interest in Colossus through his alter ego John Wilson.
"John Wilson" first appeared on corporate documents in December 1997.
Earlier that month, a board of inquiry had revealed that a privately owned Vanuatu-based gambling company VITAB had "procured by fraud" a contract with the ACT’s TAB, which gave VITAB access to the Victorian TAB.
The damning report by commissioner Richard Burbidge, QC, revealed that VITAB would never have passed probity checks because, among its hidden owners, were Australian gambling figures Peter Bartholomew and his brother-in-law Alan Tripp, who had a string of criminal convictions for their gambling activities.
Former prime minister Bob Hawke owned 12 per cent and, hidden via a Vanuatu-registered company controlled by a straw director, were Zeljko and Walsh who owned 20 per cent.
Despite the commission’s best efforts to get Zeljko, Walsh, Tripp and Bartholomew to give evidence, they were nowhere to be found.
A summons was served on Zeljko’s and Walsh’s law firm, which was run by now federal Senator Eric Abetz and his partner Roger Curtis.
Mr Curtis told the inquiry that, on September 10, 1997, the week before the commission’s summons arrived, Zeljko had collected the crucial VITAB file from Mr Curtis’ office. Mr Burbidge was furious. He said in his final report that the file removal was nothing more than an attempt to "handicap" and "frustrate" his inquiry.
The final report found there was not enough evidence to conclude that Hawke, Zeljko or Walsh were aware of the initial fraud when VITAB signed the contract with ACTTAB.
After the VITAB fiasco, Zeljko and Walsh joined forces with an ex-employee of the Waterhouse bookmaking clan, Irish-born Karl O’Farrell.
"My name is John Wilson and I live at … Mosman and I’m an investor," Zeljko told the court in November 2008 when he was moving to bankrupt his partner O’Farrell.
Asked if he was also known as Zeljko Ranogajec, he replied, "That is correct. I changed my name to my wife’s name when I got married."
O’Farrell had an ambitious scheme to wager in the US through his company Capital Play, which was majority owned by Zeljko through a front company.
In January 2004, gaming regulators wanted to know who was behind that front company.
In court, Zeljko agreed that members of the Bankroll syndicate were "unwilling or unable" to supply the information requested by the gaming regulator.
The legal dispute was over O’Farrell’s promise to pay Zeljko rebates from the US wagering operation. Although the payment of these rebates was based on a verbal agreement and may have involved some "illegality in the US", Magistrate Driver found for Zeljko and allowed him to bankrupt O’Farrell.
It was onwards and upwards for Zeljko. The week after his rare public appearance via his stint in the witness box, Zeljko paid just under $20 million for adjoining clifftop mansions in Mosman with gun barrel views out to Sydney Heads.
One of the houses, which are both in his wife’s name, is rented by Kyle Sandilands.
Zeljko, through various entities, owns a string of other prestige properties in Sydney, and a holiday house in Wamberal which he bought for $4 million in 2007.
In 2013 he added to his Tasmania property portfolio with a $5.3 million purchase of a five-bedroom penthouse in Hobart. On paper the property is owned by London Met. The single shareholder, Zenon Pasieczny, is a long-time friend from Hobart days. Mr Pasieczny, once a contributor on technology for the Herald and The Age, is a director of a number of Zeljko/Wilson’s Australian entities.
Meanwhile, Tasmania’s tourism industry is tied to the continuing gambling success of Zeljko’s Bankroll. With Mona losing millions of dollars each year, Walsh acknowledges Mona’s fate relies on continuing gambling success.
"If I died now, it would take some clever decision from Zeljko to keep the funding in place, but it would be possible," he told the Financial Review this year.
Walsh’s book A Bone of Fact has a dedication to Zeljko. "This book is about you … because my life is inextricably bound to yours.
"Not many people have their fantasies become reality, you made my fantasy come true. Thank you."