Codie SanchezFounder @ Contrarian Thinking

Genius or Lucky?

11 Feb 2025 · 1 min

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0:56

Mattress Mack's multimillion-dollar sports bets look like gambling losses but are actually hedges. He runs promotions that refund customers $3,000+ if a team wins, then bets against that outcome to cap his downside while getting massive free press. A $13M Astros loss in 2019 was really a $25M marketing spend.

Questions this video answers

The Bengals (approx. $5.5 million).

About $13 million, in 2019.

Purchases over $3,000.

About $25 million.

Chapters

I know a guy who makes multimillion dollar bets but actually profits off them pretty much every time. Everybody says Mattress Mack is a gambler, but it's the opposite. He's famous for placing these huge bets, like when he lost five and a half million betting on the Bengals to win the super bowl or losing like 13 million, I think, on the Houston Astros in 2019. But the truth is his huge bets are just a sophisticated hedge. Hedging means that you reduce risk by betting the opposite side of a wager. Mattress Mac basically owns a furniture store where he runs a season long promotion that refunds all his customers with purchases over 3,000 if, let's say the Astros win the World Series. This means he had a downside of $25 million for this promotion if he didn't hedge against it and everybody bought those mattresses. So he says, I'm gonna make a bet on the opposite side. The bet actually protects Mattress Mac, and then he gets a ton of free press from him being a crazy gambler. So sometimes I think, like you ask, how can you win even when you lose?