How the Houston Astros' World Series win could damage Caesars Palace's owner
"The house always wins" might be the motto of Las Vegas gamblers who say games always favor the casino over the players. But Caesars Entertainment, owner of brands like Caesars Palace, has a different take these days.
A Houston furniture store owner's payout on a World Series bet is so big that it is making a significant dent in Caesars Entertainment's profit margins.
"I think most of you are aware we've got a fairly high-profile liability out there with the Astros," Caesars Entertainment CEO Thomas Reeg said on an investor call early this month prior to the World Series win. "That will be a swing factor in whether the fourth quarter is positive as a whole."
Jim McIngvale, better known as "Mattress Mack," might have one of the biggest reasons to celebrate the Houston Astros' World Series win over the Philadelphia Phillies earlier this month. Thanks to a series of bets that added up to $10 million, McIngvale won $75 million off of the Astros victory — a financial win reportedly the largest payout in the history of sports betting.
McIngvale isn't taking the winnings for himself, however. The Gallery Furniture chain owner routinely ties sales promotions to Astros wins.
Customers who spent $3,000 on a mattress up until July 5 were promised double their money if the Astros took the World Series. He later tapered that down to 100% of their money back and eventually had to halt the promotion altogether because he sold through the potential $75 million winning, according to a Caesars Sportsbook blog post. At least 3,000 Gallery Furniture customers will be rewarded from the bet.
Not all of the $75 million payout will come from the Caesars Entertainment purse, but a hefty chunk will. McIngvale bet $3 million in early May on the Astros win through Caesars, which means the casino conglomerate is on the hook for $30 million. He also placed a $1 million bet with WynnBet, the sportsbook of Wynn Resorts, early in the baseball season, according to the sports betting website Action Network.
McIngvale rounded out his series of bets in July with a $2 million wager with MGM Resorts International's BetMGM, $2 million at Barstool, and $1 million bets apiece at Unibet and Betfred.
The CEO of Penn Entertainment, the parent company of Barstool, also noted on an investor call this month his company would be profitable if McIngvale didn't win and would be "closer to breakeven-ish" if he did.
Caesars is on the hook for the biggest piece of the winning pie, but it doesn't appear the company is losing much sleep.
"What can we say? We just wrote the biggest check in sports betting history to Mattress Mack for $30 million," Ken Fuchs, Caesars Digital's chief operating officer, said to CNBC. "Would we do it all again? You bet."