Jim “Mattress Mack” McIngvale made what is believed to be the largest losing wager in horse racing history Saturday, as a $2.4-million win bet on Essential Quality (Tapit) went down in flames as the favorite in the GI Kentucky Derby finished fourth. But, for McIngvale, there were no wounds to be licked.
The bet was tied into a promotion at his Gallery Furniture Stores in Houston. Anyone buying a mattress worth $3,000 or more prior to the Derby would get the mattress for free if the betting favorite won the Derby. The promotion was so successful that McIngvale sold about 2,000 mattresses, making their combined value $6 million. McIngvale said the markup on the mattresses was 100%, meaning he would have been out of pocket about $3 million on the mattresses if the horse had won.
Once McIngvale started to do the math, he realized he could create what amounted to a no-lose situation.
With Essential Quality going off at 2.90-1, McIngvale's $2.4-million bet would have turned into a profit of $6,960,000 had he won. That would have been enough to cover the costs associated with giving away so many mattresses for free. The defeat meant that McIngvale was out $2.4 million, but that is less than the near $3 million he made by selling so many mattresses.
“I'm very glad I did it,” McIngvale said Monday. “It made the store really busy for two weeks. Not only did they buy mattresses, they bought a lot of other things. In this crazy age of Amazon retailing, if we don't do something that sets us apart we're going to be put out of business by the Amazon people or by people that sell these inexpensive mattresses in a box. The promotion was great for bringing people out. It was fun. It's too bad Essential Quality didn't win but it was an exciting race and I hear the ratings were good. It was something that gave horse racing a shot in the arm.”
McIngvale has run similar promotions that tied into bets he made on the World Series, the Super Bowl and the NCAA tournament. He made a successful $3.46-million bet on the Tampa By Buccaneers to cover the spread in this year's Super Bowl.
“I was really amazed to find that out that we sold as many mattresses for this as we did for the Super Bowl,” he said.
McIngvale made all $2.4 million of his bets on track at Churchill Downs rather than through an ADW or in Las Vegas. The cut for purses for on-track bets is 10%, which adds up to $240,000 infusion into the purse account. The cut from an ADW bet is just 5%, and had someone in Las Vegas booked his bet, the horsemen would have gotten no money.
“The people in Kentucky were very happy that I bet all this money on track,” he said. “I could have gone to Las Vegas and bet the money with someone out there or bet it offshore. If I did that, the track would have gotten nothing. I wanted to support the ecosystem of horse racing so I made the bet at Churchill Downs. That way we maximized the amount of money that horsemen got, that the ecosystem got. It's crazy that some people in the horse racing business bet with a bookie or go offshore to a place like Costa Rica. They're not supporting racing.”
Prepared to bet more than the $2.4 million, McIngvale had $4 million wired to Churchill Downs before his arrival. He made his bets over time and in increments, starting with a $500,000 wager on Friday.
“We wanted to seed the money into the pool where it wasn't such a shock to the system,” he said. “I didn't want to bet it all early and I didn't want to bet it all late. I wanted to give the betting public a chance to react to my bet.”
With the money having been wired to Churchill before the race, McIngvale wasn't required to make his wagers through a mutuel clerk. He did, however, make a $100,000 win bet at the windows that was staged for the benefit of the NBC cameras.
McIngvale said he will consider bringing the promotion back for future runnings of the Derby.
“The difference between this bet and the sports bets is the best you're going to do on a sports or football bet is +140 or +150,” he said. “With this, I got +280 on the favorite. That's a pretty good deal. The problem is that not too many horse races can handle a bet that big.”
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