Inside the world of high-stakes political betting.
This Guy Lost $10 Million Betting On The Election
Inside the world of high-stakes political betting.
If you’ve spent any time in Texas, you probably know Jim “Mattress Mack” McIngvale. The owner of Gallery Furniture started his business in 1981 with $5,000 and a pickup truck, and without the money to produce slick TV commercials, resorted to starring in them himself.
Jim’s nervous, fast-paced delivery helped draw attention to his new store, and his unimaginative catchphrase — “Gallery Furniture saves you money!” — has closed hundreds of commercials airing on late-night TV in the last 30 years. The store dependably ranks among the most profitable per square foot in the country, and Mattress Mack has become a pillar of the community, with charitable donations and other good deeds.
As Mattress Mack prospered, he launched increasingly over-the-top promotional gimmicks. The store was making money hand over fist, and furniture is a big-ticket, high-profit item. Once people are in the store and the cash register chimes, they’re spending hundreds of dollars at the very minimum. The trick is getting them into your store instead of somebody else’s.
So Jim McIngvale decided to start making big bets with his customers. His promotions all worked the same way: If you made a purchase above a certain amount at Gallery Furniture, Mattress Mack would give you your money back if a bet went a certain way.
In 2014, Gallery let customers lay money down on the Seahawks winning the Super Bowl (Mattress Mack picked the Broncos). A thousand people took Mattress Mack up on it and won, costing him in the neighborhood of $7 million dollars.
In 2015, he wagered customers who bought over $7,000 in furniture that the price of crude oil wouldn’t break $85 a barrel or they’d get their money back. It didn’t, thankfully, but that’s a rare example of a Gallery Furniture bet not paying out for the public. It seems like Mattress Mack loses a lot more than he wins with these promotions.
With that in mind, nobody in Houston was surprised last year when he proposed this deal in the middle of election madness: Buy a mattress set at $2,000 or more and you could choose a candidate, either Trump or Clinton. If you picked the eventual winner, Gallery Furniture would give you a full cash refund on your purchase, or even more in store credit.
Most stores that run sales gimmicks like this typically throw in some weasel words to limit their liability — things like “offer only good for the first 100 customers.” Jim McIngvale doesn’t play that, though. Any and every mattress buyer who made a qualifying purchase got to cast their vote. And plenty did.
Mattress Mack didn’t make this bet to try and swing the election. He’s been a proud Tea Party supporter for years. But he gave participants the chance to pick Trump or Hillary and offered equal payouts. As we all know, Trump won, and plenty of shoppers had backed the New York billionaire.
The total cost of McIngvale’s election stunt? An estimated $10 million dollars.
Thousands of people showed up to the store the day after the election to claim their winnings. McIngvale had Trump imitators entertaining the crowd, and told news reporters that if Hillary had won, he would have been out even more money — $13 million. Houston’s furniture buyers did just as bad a job predicting the results as high-paid pundits.
It’s kind of amazing that Gallery Furniture can write off a loss that big, even with annual profits of $150 million. But McIngvale makes it work.
If you’re looking to cash in on the next presidential election in 2020, slow down: It’s technically illegal for an American citizen to bet on election results.
This is probably for a good reason — our democracy is fragile enough without people attempting to tank it for cash. We wouldn’t put it past some of the hucksters running for office to deliberately wreck their own campaigns for a big payout.
There is one loophole, though: It’s perfectly legal to wager cash on elections if the bet’s for scientific purposes. That’s what enables sites like PredictIt, which is run out of Victoria University in Wellington, New Zealand, to operate.
The researchers who set up the site aren’t in the game for profit. Instead, they’re testing to see if betting markets are more accurate in predicting election outcomes than polls or other methods. It’s a long-term study that requires a bunch of data to draw any conclusions.
But even PredictIt caps you at an $850 max bet, so if you’re looking to retire by betting on an election, you can’t do it there.
However, it is perfectly legal to bet on the US election if you’re not an American citizen, and that’s how John Mappin managed to take home $124,000 on November 9th.
Mappin placed his wager with William Hill, one of the United Kingdom’s most well-respected bookmakers. Hill founded his eponymous business in 1934 when gambling was still illegal in Britain, and now has 2,300 offices across the country. In addition to standard sports bets and casino games, William Hill also offers odds on a wide variety of world events.
The presidential election brought in record receipts for the firm, and hotel owner Mappin — a huge Trump booster — started laying money down as soon as the mogul declared his candidacy. In total, Mappin made about 30 bets, first that Trump would win the nomination and then the whole shebang. They all paid off, and John Mappin went home with a boodle of the bettor’s money.
This was fine for Hill, as it had plenty of people making up the action on the other side. One woman lost a staggering $597,000 on her belief that the next president would be Hillary Clinton. Overall, though, 71% of British bettors put their money on Trump and were rewarded.
So how does Gallery Furniture get away with its election wagers? Well, technically Mattress Mack isn’t gambling. People aren’t giving him money to make bets. They’re just buying furniture, which they can use in good health no matter who wins the election. The store is then offering to give money back to customers who make one choice or another, which, as we’ve seen with loyalty programs, is absolutely kosher.
What’s next for Jim McIngvale? Well, we aren’t going to see a presidential election here for another three years and change, so he’s going to have to mix things up a bit.
Let’s hope the odds are more in his favor next time.