‘Mattress Mack’s’ $75M Astros Haul Seen Imperiling Q4 Sportsbook Profitability

Posted on: November 7, 2022, 03:59h. 

Last updated on: November 8, 2022, 05:03h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Jim “Mattress Mack” McIngvale won a cool $75.7 million when the Houston Astros clinched the World Series last Saturday. That haul could ensure some sportsbook operators won’t be profitable in the fourth quarter.

Mattress Mack
Jim “Mattress Mack” McIngvale at the World Series. His futures bets on the Astros likely ensure some sportsbooks won’t be profitable in the current quarter. (Image: ABC7)

The Gallery Furniture founder was the largest single-event liability on record for US sportsbooks because, throughout the 2022 Major League Baseball (MLB) season, he made a series of futures wagers on the Astros to win the title at odds ranging from 5-1 to 10-1.

Caesars Sportsbook, which has been nearing profitability, took a $3 million bet from McIngvale at 10-1 odds, meaning the furniture scion netted $30 million on that play — the largest single payout in US sports wagering history.

He also placed Astros World Series futures bets with Barstool Sportsbook, Betfred, BetMGM, Unibet, and WynnBET. Mattress Mack placed $2 million wagers with Barstool and BetMGM, meaning his payouts from those books are $10 million plus the amount wagered. He bet $1 million apiece at Betfred, Unibet, and WynnBET, meaning he netted $5 million on each of those tickets.

And I think if Mattress Mack doesn’t hit, we’ll be profitable Q4 if he does, then it will probably be closer to breakeven-ish somewhere in that range,” said Penn Entertainment (NASDAQ:PENN) CEO Jay Snowden on the company’s recent third-quarter earnings conference call.

That company owns Barstool Sportsbook.

Sportsbook Losses, But They Still Win

McIngvale has a history of using massive sports bets to drive traffic to his two Houston-area stores and the company’s website.

Much to the delight of sportsbook operators, at least before Saturday, November 5, his wagering track record was poor, with losers including a combined $9.5 million on the Cincinnati Bengals to win last season’s Super Bowl, $2 million on the New England Patriots to win the Super Bowl, and $1 million on the Houston Cougars to win the NCAA men’s basketball title in 2021.

His current promotion is refunding mattress sales — on select brands — of $3,000 or more if the Houston Astros win the 2022 World Series. Although the books took a big hit on Mattress Mack’s World Series wagers, some analysts see other tangible benefits for the industry.

“Even with a widespread hit from the World Series outcome, in the long term we anticipate the viral sensation of Mattress Mack’s payout to be an effective marketing headline, as well as further evidence of the wide social acceptance of sports betting,” wrote CBRE’s John DeCree in a note to clients.

Profitability Paradox

Amid the proliferation of mobile sports betting across the US, some operators have come under fire for declining action from sharp bettors. In other words, there’s a difference between big bettors and sharps, and in the eyes of the aforementioned books, Mattress Mack likely resides in the former category.

Still, profitability is the name of the game for operators, and it’s been elusive. To date, FanDuel notched the only profitable quarter — the second of 2022 — in US sports wagering history. Barstool, BetMGM and Caesars Sportsbook were getting close, indicating McIngvale’s Astros wins could temporarily disrupt those companies’ pursuit of shedding their money-losing ways.

With profitability in focus across the sports wagering industry, shareholders of some operators are likely breathing sighs of relief Mattress Mack didn’t wager with those books.