The Houston Astros won the World Series on Saturday night to give Jim McIngvale a.k.a. Mattress Mack the largest ever single payout at U.S. sportsbooks at $75M and create a splitting headache for sports betting operators with unbalanced books.
Mattress Mack placed futures bets across various sportsbooks, with Caesars Sportsbook (CZR) reported to be the primary platform taking his action. CBRE Equity Research analyst John DeCree reported that Caesars will pay out $30M on the $3M wager Mattress Mack made at 10-to-1 odds. Caesars' payout to Mack is said to be the largest legal sportsbook win in the U.S.
Other sportsbooks on the hook include Betfred, which took a $1M bet at 5-to-1 odds in their Iowa online sportsbook, and Penn National Gaming (NASDAQ:PENN) and BetMGM (MGM) with payouts estimated at over $10M. Even Wynn Interactive (WYNN) was on the hook for $5M on a $1M bet.
The huge payouts are enough to impact Q4 earnings reports for the casino giants with hold rates likely to come in much lower than anticipated for both the World Series and sports betting overall.
Penn National Gaming (PENN) CEO Jay Snowden broke down the wildcard on the recent earnings call. "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," he noted.
However, Mattress Mack's gigantic World Series payout could be an effective marketing tool for the sports betting industry in the long run despite the Q4 earnings hit. "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," advised CBRE's John DeCree.