Knockout groups in this case will only work if the inside of the text is a fill.
I suppose, it isn't. So you need to make it a separate object.
Take the group selection tool and select the inner paths, then copy them and paste them in front one by one.
You can then fill them with any color, set their opacity to 0
Then group all the objects and make the group a knockout group.
Knockout groups are no basic stuff. You also might want to study the manual for some basics on how Illustrator works.