Jim “Mattress Mack” McIngvale, of Houston, holds among the tickets in Atlantic City N.J., Tuesday, Nov. 1, 2022, showing bets he has made on the Houston Astros to win the baseball World Series.
Wayne Parry | AP
Mattress Mack’s record-breaking $75 million payout on a wager that the Houston Astros would win the World Series will cost Caesars and Penn Entertainment big of their digital businesses this quarter.
Jim “Mattress Mack” McIngvale, the Texas furniture salesman who famously hedges his sports bets with furniture promotions, placed $10 million on his beloved Houston Astros to win this yr’s World Series, across several wagers.
With the Astros’ second-ever World Series win on Saturday, McIngvale clinched a $75 million payout. Of that total, Caesars will take the largest hit, paying out $30 million from McIngvale’s May 13 bet on the Astros for $3 million at 10-1 odds.
“I believe most of you might be aware, we have a reasonably high-profile liability on the market with the Astros. In order that can be a swing think about whether fourth quarter is positive as an entire,” Caesars CEO Tom Reeg warned on the corporate’s Nov. 1 earnings call.
Penn Entertainment CEO Jay Snowden on the corporate’s Nov. 3 earnings call similarly warned concerning the company’s profitability in light of McIngvale’s bet via Penn’s sportsbook Barstool — and urged listeners to root for the Philadelphia Phillies as an alternative.
“I think if Mattress Mack doesn’t hit, we’ll be profitable in Q4,” Snowden said then. “If he does, then it’ll probably be closer to break-evenish.”
The corporate now has to pay out $10 million.
Wynn, which also hosted considered one of McIngvale’s bets, said it’s going to comment further on the wager on its Wednesday earning call.
McIngvale said he placed other wagers on the Astros at sites including BetMGM, Unibet and Betfred. Texas doesn’t allow legalized gambling, so the mattress salesman often travels to states where it’s legal to wager.
Despite the costly hit, Caesars said Saturday after the Astros’ win that the wager was value it.
“What can we are saying? We just wrote the largest check in sports betting history to Mattress Mack for $30,000,000. Would we do all of it again? You bet,” said Ken Fuchs, chief operating officer of Caesars Digital.
Fuchs said a casino the dimensions of Caesars is accustomed to taking big risks.
“You understand, for us it’s one other day on the office in some respect,” he said.
Caesars and Penn are each on a path to profitability of their growing digital segments — and investors are adding immense pressure.
DraftKings stock plummeted Friday after CEO Jason Robins predicted higher losses next yr than expectations and reiterated that the corporate doesn’t anticipate profitability until the fourth quarter of 2023.
McIngvale, for his part, now has to pay back all of the shoppers who took advantage of his promotion: Those that spent $3,000 or more on a mattress got their purchase free with the Astros win.
The Gallery Furniture owner says he’ll get back his initial $10 million he put in and the remainder will return to the shoppers.
“It’s gonna be just about a wash of giving the shoppers their a reimbursement, which is what we really need to do because then word of mouth promoting lasts for 20 or 30 years,” he told CNBC ahead of the World Series.
“My real interest is ensuring the shoppers win because the shoppers can be completely happy and thrilled and smiling,” he said.