This past Sunday was Super Bowl Sunday and the pinnacle of America’s hottest new past time, sports gambling. The American Gaming Association estimates that Americans wagered $4.3 billion on the big game. One man, Jim McIngvale, won a whopping $2.72 million! At first, this looks like extravagant, rich guy gambling, but there is more going on.
Jim McIngvale, also known as Mattress Mack, is a furniture store owner in Houston Texas, and he bet $3.46 million that the Tampa Bay Buccaneers would cover a 3.5 point spread. To win this bet, he needed Tampa Bay to win or to lose by less than 3.5 points. Since Tampa Bay won, he cashed in a net $2.72 million. But even if he had lost, it was a genius bet.
Alongside his bet, he ran a promotion at his furniture store. Leading up to the Super Bowl, any customer who spent more than $3,000 on certain mattresses would get their purchase refunded if Tampa Bay won the Super Bowl. With the promotion Mattress Mack certainly saw increased sales, and rightfully so. If I needed a new mattress, I’d buy from him hoping that the Bucs would win and that I’d get the mattress for free. If they lost, well I needed a new mattress anyway.
For the sake of his business during the promotion, Mattress Mack would want Tampa Bay to lose so he’d get to keep the revenue from the increased sales. That’s why he made the bet. Provided he saw a large enough increase in sales from his promotion (and if he didn’t he could have easily hedged his bet by wagering on Kansas City), he couldn’t lose. Since Tampa Bay won, he won $2.72 million which he presumably used to pay for the promotion. If Tampa Bay had lost, he would have lost the bet but kept the increased revenue. Either way, he would have gotten great publicity and developed customer loyalty.
But the real genius behind his tactics is that not only could he not lose, he also had a chance to win big. He was smart to bet on the underdog to cover the spread. He just needed Tampa Bay to not lose by more than 3.5 points to win his bet, and for the promotion, he would only have to refund the mattress purchases if Tampa Bay won the game. So if Tampa Bay had lost by 3 points or less, he would have won his bet and also kept the revenue from the increased sale in mattresses. He leveraged Vegas in a shrewd business deal!
Is this going to be a new trend? Are Sportsbooks going to become an alternate way to finance business ventures? I’m not sure, but I’m certain about one thing: sports gambling is not going away, and it will be fascinating to watch how it evolves.