Mattress Mack’s huge win as Astros take title seen hitting every U.S. sportsbook

CBRE believes Mattress Mack big win will likely affect every U.S. sportsbook’s Q4 contribution and margin

Jim “Mattress Mack” McIngvale won what is believed to be the largest payout in sports betting history, about $75M, as the Houston Astros clinched the World Series with a 4-1 victory over the Philadelphia Phillies in Game 6 this past weekend. Afterward, CBRE Equity Research analyst John DeCree noted that multiple companies cited wagers from Mattress Mack on the Astros on third quarter earnings calls, with Penn Entertainment (PENN) going so far as to call out the outcome of the Astros as being the determinant between breakeven and profit in their digital segment in the fourth quarter.

BET ON ASTROS: The Texas furniture store owner placed a $3M bet on the Astros to win the title at 10-1 odds on Caesars (CZR) Sportsbook’s mobile app. While that was his largest single bet, Jim “Mattress Mack” McIngvale also placed approximately $7M more in bets on the team over the summer at various sportsbooks. According to ESPN, McIngvale uses the betting market to mitigate risk on promotions at his Gallery Furniture store that are based on the winner of big sporting events. Sportsbooks Betfred took a $1M bet on the Astros from McIngvale in Iowa.

$75M TO HIT SPORTSBOOKS IN Q4: Commenting on Mattress Mack’s big win, CBRE Equity Research analyst John DeCree highlighted that while the furniture empresario placed bets across various sportsbooks to accommodate the $10M in wagers placed, Caesars Sportsbook was the primary platform, taking a $3M wager at 10-to-1 odds to pay out $30M. Caesars’ payout to Mack is the largest legal sportsbook win in the U.S., the analyst noted. Secondary books also have obligations. U.K.-based sportsbook Betfred took a $1M bet at 5-to-1 odds in their Iowa online sportsbook, totaling a payout of $5M, “significantly larger” than any bet the company has taken since launching in the U.S. Both Penn Entertainment and BetMGM (MGM) are estimated to have taken about $2M wagers from Mack with $10M payouts, followed by several other sportsbooks, including Wynn Interactive (WYNN) on the hook for $5M on a $1M bet, DeCree wrote.

While the analyst acknowledged that it’s difficult to validate the specific exposure across each book, he also pointed out that multiple companies cited wagers from Mattress Mack on the Astros on third quarter earnings calls. Penn went so far as to say the outcome of the Astros would be the determinant between breakeven and profit in their digital segment in the fourth quarter, with a “couple of million” on the line and a payout around $10M.

This will likely affect every sportsbook’s fourth quarter contribution and margin, even those without Mack’s wagers. DeCree said, adding that it is estimated the majority of World Series wagers were on the Astros. Even with a widespread hit from the World Series outcome, in the long-term the analyst anticipates 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.

PRICE ACTION: In Monday morning trading, shares of Caesars have dropped almost 2% to $41.90, while Penn Entertainment and Wynn stocks have gained a little over 1% to $33.10 and $71.79, respectively. DraftKings (DKNG), meanwhile, has slid almost 3% to $11.05.  

Keywords: sports betting, MLB, Houston Astros, World Series, sports gambling, Philadelphia Phillies