For some sports activities gamblers, betting on the Super Bowl coin toss is about nearly as good as the percentages can get. But for Jim McIngvale, the Houston furnishings mogul referred to as “Mattress Mack,” putting multimillion-dollar wagers on the large sport and different marquee sporting occasions provides a unique technique—heads I win, tails I win.
For years, McIngvale, who owns the three-store chain Gallery Furniture, has made his headline-grabbing wagers not for playing glory, however as wise hedges towards his massive gross sales promotions. During the Super Bowl, March Madness, the World Series, and different occasions, Mack will place an enormous guess on one workforce—both a Texas membership or one closest geographically to his dwelling state—and provide clients a full refund in the event that they win.
During this 12 months’s NCAA Men’s Basketball Tournament, for instance, he wagered $5.5 million on Kansas and ran a promotion to refund all clients who spent $3,000 or extra on sure kinds of mattresses and furnishings if the Jayhawks gained. Right after Kansas beat the University of North Carolina on Monday evening, Mack and his 20-person gross sales workforce acquired a stream of textual content messages from their clients: We gained! We gained! “When does a furniture salesman get a text at midnight from a customer?” McIngvale asks.
One buyer purchased seven mattresses for a complete of $38,000 and one other purchased $40,000 value of furnishings to outfit a brand new dwelling. “I’ve always heard about his promotions on the news, but I never needed furniture until now,” says Robert Cruz, who has a brand new home full of latest, free furnishings. “When I heard the score I said, ‘Wow. That’s cool.”
The telephone rang. It was his spouse. “I said, ‘Did Denver win?’ She said, ‘Seattle won, dummy. We’re out $9 million.’”
McIngvale’s promotions and sports activities bets have helped him develop his enterprise, which he began together with his spouse, Linda, in 1981. In 2019, Gallery had $164 million in income and by the top of final 12 months gross sales grew by about 40% to greater than $230 million.
The economics of McIngvale’s technique has principally paid off. During his March Madness promotion he guess a complete of $9.86 million throughout 4 bets and gained $13.5 million. (Mack’s bets have been a $1 million futures guess on the East bracket to win $1.7 million, the one guess he misplaced, then $2.25 million on Kansas at +190 to win $6.5 million; $3.31 million on Kansas at +190 to win $6.3 million; and $3.3 million on Kansas at -200 to win $1.7 million.) Gallery bought a complete of $12.9 million value of furnishings throughout the promotion, so as soon as he refunds all of his clients, which he’ll do on April 24 throughout a giant occasion in his retailer, he’ll have greater than a $500,000 revenue.
“Now, it doesn’t always work this cleanly,” says McIngvale. “The reason is that I got ahead of it.”
McIngvale guess on Kansas on Thursday, earlier than the Final Four, and obtained his cash down at +190. If McIngvale waited till Kansas, which was No. 1 seed, had gained its Final Four sport towards Villanova, the percentages would have been -190 or worse, and he would have wanted to guess $25 million to win $12 million. “There’s no advantage in doing this if you take a negative proposition wager to cover the losses,” McIngvale says.
Whether the guess itself pays off, the publicity-generating promotions transfer a ton of furnishings. Mack says about 30% of the shop’s stock bought out on Monday alone. The March Madness promotion super-charged what ought to have been a lackluster day on the showroom ground. “Normally on Mondays we do about $200,000 at this time a year,” says McIngvale. “Yesterday we did $1.4 million.”
Similarly, throughout Super Bowl LVI, McIngvale guess $9.5 million on the Cincinnati Bengals to beat the Los Angeles Rams. If the Bengals had gained, McIngvale would have refunded any buyer who purchased a $3,000 mattress or recliner earlier than kickoff. He had an enormous spike in gross sales and bought $20 million value of stock. He misplaced that $9.5 million wager, nonetheless, which means he didn’t must refund any clients—and he was up $10.5 million.
Mack says his promotions additionally entice a deep-pocketed clientele. During the Super Bowl, clients spent a mean of $5,800. For 4 weeks in June 2021, when Gallery held no promotions, McIngvale did $7 million in gross sales with the typical buyer spending round $4,000. During March Madness, Gallery introduced in 842 new clients and 1,234 repeat clients. The new clients spent a mean $6,764 and repeat shoppers spent a mean of $5,882. The share of shoppers who get permitted for in-store additionally financing jumps about 10% throughout his sports activities gross sales occasions.
“These promotions bring in a better-quality customer,” he says, “a customer who spends more money, who is more affluent and is more credit-worthy.”
The genius behind the self-described huckster’s promotions is that they’re equal components advertising and marketing gimmick and sound enterprise sense. And he’s not the one one taking a danger. Even for purchasers who wouldn’t know a parlay from a prop, Mack has created common gross sales occasions that appears like playing—his clients basically lay down $3,000 or extra for the prospect to win a free mattress. And win or lose, they go dwelling with one thing. But McIngvale says that it’s not the attract of playing that attracts in clients: “It’s about the strongest word in the English language which is ‘free,’ ‘free,’ ‘free,’” he says. “The opportunity that they might buy this, and they might get it free brings them in.”
Most gamblers lose, after all, and Mattress Mack needed to study the laborious means. Twenty years in the past, McIngvale ran his first sports-related promotion, providing refunds to clients if the Houston Texans beat the Dallas Cowboys within the Governor’s Cup. He didn’t hedge the promotion with a guess, however the Cowboys gained anyway. In 2014, Mack suffered his largest loss. He provided a promotion that will give clients no matter they purchased totally free if the Denver Broncos beat the Seattle Seahawks in Super Bowl XLVII. He didn’t hedge that point, both, and he nonetheless can recall the ache vividly. “The snap went over Peyton Manning’s head on the first play, and it went downhill from there,” says McIngvale. “That was a huge hurt—no insurance, no bets, no nothing. I look all the liability.”
His shops bought a lot furnishings throughout that two-day promotion that the showroom was empty by Saturday. “I’ll never forget it: we had to close the store at six o’clock,” he says. “We had no furniture left.” He was too nervous to observe the sport, so he walked on the treadmill for hours. The telephone rang. It was his spouse. “I said, ‘Did Denver win?’ She said, ‘Seattle won, dummy. We’re out $9 million.’”
In 2017, when McIngvale’s hometown Houston Astros have been headed to the World Series, he lastly determined to hedge a promotion with sports activities wagers. He went to a couple sportsbooks to get as a lot cash down as doable on the Astros, however he couldn’t get nice odds—the most effective was -120. The Astros gained and he refunded his clients, however “scraped by” with a revenue.
Mack’s urge for food for danger is excessive, however he gained’t take his personal motion anymore like he did throughout that Seahawks-Broncos Super Bowl. He now is aware of nicely sufficient to hedge his massive gross sales with an enormous guess, and he’ll additionally wager extra if gross sales are surpassing his potential win complete. Back in 2014, when his promotion misplaced the enterprise $9 million, his spouse advised him one thing he’s by no means forgotten. “She said that I have a gambling problem,” McIngvale remembers. “I said, ‘No, I have a promotion problem.’”