Guess We Have To Talk About Mattress Mack | LSR Podcast 181
Houston’s favorite bedding salesman, Mattress Mack, gives one of the most ridiculous takes of the legal US sports betting era, so the crew finally must speak his name. Also, LSR projections for Super Bowl handle and a shift in strategy for Barstool Sportsbook.
Matt Brown (00:06):
Hello, and welcome to episode number 181 of the LSR podcast. My name is Matt Brown, joined each and every week by the brightest minds in all of the gaming industry. With me, I have Adam Candee. I have Dustin Gouker. You can follow them on the Twitter machine, and you should. It’s absolutely free, @DustinGouker, @AdamCandee, two E’s, no Y. If you hate yourself, you can follow me @MattBrownM2. We will talk about … there’s a game. It’s a big one that’s happening. We’ll see what some projections might be for that. And man, there was a sportsbook out there that opened that we were curious as to whether their strategy was going to work out. Seems like strategy might be shifting a little bit. We’ll talk about that a little bit, too. And let’s kick things off here, Dustin, though, with a guy that, listen, we have to say his name because it’s a name. We try not to say his name on the pod very often, but the name has to be said here to really drive home how ridiculous all of this is.
Dustin Gouker (01:01):
Yeah. I’m still pretty angry about this, even though this happened hours ago. I think we are all probably angry about this, and it’s one of those few things that unites sports betting Twitter. But Mattress Mack, Jim McIngvale, of the fame of betting large amounts on lots of things all around the country. He came out, he talked both on his own site and with the Houston Chronicle about what is going on in Texas and legalization of sports betting in Texas. And he has now come out not in favor of legalizing sports betting. He’s made several comments, but the biggest one was he says he doesn’t want to feel the impulse to go bet if it’s legal in Texas. That he’s OK with, “driving to Louisiana across the border to go bet.” I’m here to tell you, this is all very ridiculous because Mack’s whole shtick is generating free PR from gambling.
He’s free-rolling his customers of his furniture store. He offers promotions versus a sports bet, so that he’s generally free-rolling that. He’s not really gambling any money. If he actually has a gambling problem, by all means go get help for that.
Matt Brown (02:15):
Dustin Gouker (02:15):
But him sitting here telling us we shouldn’t legalize sports betting in Texas because I don’t want the temptation of it. Absolute garbage. If, again, he wants to become a responsible gambling advocate and say, “I’m done with gambling. If it’s here, it’s too much for me.” That would be a fine message. But that’s not what he wants to do. Somebody even suggested on the Twitter machine that he would see all his PR go away because once he’s just doing it in Texas and not flying off to some location to do it, maybe he’s not getting the PR. I actually think that might be why he’s not for it anymore. Anyway, all ridiculous. Yeah, I mean of all the reasons not to legalize sports betting because Mattress Mack doesn’t want the temptation of betting in his home state, come on. Ridiculous take.
Matt Brown (03:04):
I’m glad you brought that up because, Adam, that’s what I was going to say, and get your opinion on it, is it doesn’t make headlines if you’re not getting on your private jet and flying to go do it in front of this big grand fashion, whatever. If literally you’re just doing it at home in your underwear on an app, it’s not as sexy, and it doesn’t get the promotion. It doesn’t get all the things like that. And the whole reason he does all of this, again, we can’t say it enough, is because he makes money off of it. It doesn’t matter if he wins or loses the bets because he makes it off of all the promotion and the mattresses and stuff that he sells. So, this is all just a giant con. I guess I shouldn’t say con, but I want to say con really bad. So, it drives me crazy, Adam.
Adam Candee (03:47):
So, you’re telling me that when Darren Rovell trails along with him on a private plane, that it’s not really about a man who’s betting millions of dollars and flying around on private jets, that it’s really a furniture salesman who’s figured out how to get everybody in aggregation world to just play along with his little game, and he’s just scheming to make more PR for his furniture store? Stop it. All of you, stop it. Most importantly, Betting Bobby over here. I don’t want to hear any more about this. Because when we talk about Mattress Mack, Dustin covered all the reasons why what he’s talking about is ridiculous. Let me add something else here. He has been doing his betting almost exclusively with Caesars Sportsbook, right? So, at this point we have to view him as an affiliate of a particular sportsbook. I haven’t heard the name Caesars too much in California.
We know why. And nor have I heard the name of Caesars in Texas quite as much either. Caesars gets a lot of pop out of this. Mattress Mack gets a lot of pop out of this. I think we have to look at them in some ways as one and the same when it comes to their interests in all of it. And I cannot, for the life of me, understand why people continue to cover this as though it’s a thing. It’s not a thing. He talked about driving to Louisiana. You all, he flies private.
Matt Brown (05:12):
Adam Candee (05:12):
He’s not driving. Any impulse he has to go gamble, he can say, “Jeeves, get the jet, and I’ll go bet in another state.” Well, just imagine, like Dustin said, what will that impulse be like when he’s lying on a Posturepedic in one of his stores and putting a bet down on his app?
Matt Brown (05:30):
It’s the classic thing of like, “No, no, no. I don’t want you all to be able to do something that I’m able to do. And I’ll make it seem like it’s a deal where I’m really looking out for you.” No, Mack. You can still go bet anytime you want to because you walk out and you hop on a plane, and you’re there in half an hour and you do it and it’s all no big deal. But the other people would not have that option, by the way. You would still be able to bet on a whim whenever you wanted to, and these other people who might want to sit down and watch an Astros game and put $5 on it, because by the way, that’s what the majority of people bet on games is $5 and $10. Oh, boy. It is something to get all riled up about, that’s for sure.
Dustin Gouker (06:15):
Yeah. Oh, one last thing. He just did a hype video, too. This was the height of the hypocrisy. He did a hype video for him betting on the national championship game in TCU. He gets dressed up in all purple, rents a Lambo.
Matt Brown (06:27):
Dustin Gouker (06:28):
This is not a serious individual who’s worried about responsible gambling. He’s not serious. This is not serious. This should be the end of covering Mattress Mack by everyone. Stop it. Just stop it.
Yes. We don’t care anymore. There’s a lot of rich dudes who bet a lot of money. They just don’t get publicity for their business from it. So let’s just quit giving this guy all this free pub that he seeks so much. In all of this though, Adam, we did, we were talking about it, we did finally get a bill, though, in Texas.
Texas gets a bill
Adam Candee (06:55):
Oh, we did. We got legalized sports betting dropping in the Legislature as reporter Jim McIngvale let us know all about. Ten percent tax rate in the initial proposal. License fees are low at $500,000. The trick to that with the low license fees is that the market access is likely to run through teams because you don’t have casinos in Texas. And so, someone’s going to make the money, right? The casinos, the operators are going to have to partner with whoever holds the licenses. And so, they’re not going to set it up where you have to pay $25 million to the state and then have to pay $25 million to your market access partner, as well. That wouldn’t make any sense for the books. The other piece of the equation here is we project that Texas would be leaving many hundreds of millions of dollars on the table at a 10% tax rate, right?
New York is projecting, for fiscal year ‘24, nearly $900 million in tax revenue. Our internal projections show that Texas would probably be somewhere in the range of $125 to $150 million in tax revenue, which is a drop in the bucket in every state, and it is barely a drop in the well in Texas when it comes to the state budget. But you have to understand what Texas is. It is a very red state with a very anti-tax climate, and getting a tax rate higher than 10% passed is going to be very difficult. It might get adjusted upward once people see just how low the revenue projections are, but you’re not going to see 51% in Texas.
Matt Brown (08:25):
Dustin, the other thing that we do have coming through the old Twitter machine here is, I don’t even know how to explain. I mean, we’ve talked about some of the ridiculous stuff that some of these brands have put out. And I think, honestly, for the vast majority, they’ve cleaned all of that up, and I don’t think that we had anything to do with any of that. Certainly, a lot of them listen to this thing where we’re going, “Guys, what are you doing? It’s your social media account. Act like it’s your social media account for a brand, and it’s not like your own personal one.” But apparently, I don’t know if someone actually thought it was their own personal one or what it is, but the tweet is still up and has not come down yet for a betting brand.
Bally Bet Tweet
Dustin Gouker (09:04):
Yeah, I mean, I guess credit to Bally Bet because they got us to talk about them because we’re not talking about them for anything that they’re doing that’s good, right? But because they’ve gotten in New York, they’re a small part of that. They’re just a rounding error, less than a rounding error in sports betting around the United States. So, after Tom Brady announces retirement for the second time, calls him an MF. I think y’all know what that stands for. This is a family podcast. So, I guess we won’t repeat that, even though I think we’ve sworn once or twice on here. But yeah, I mean, I know this is sports betting. It’s not that precious. But do we need to be going around with sports betting accounts calling Tom Brady an MF? I don’t think we do.
Yeah, I actually looked back through Bally Bet’s Twitter account and it does look like, sometimes, it’s just regular old content. And then, sometimes, it looks just like some of our personal accounts where we’re just …
Matt Brown (09:59):
Dustin Gouker (10:00):
… teeing off on whatever’s going on. If you’re a serious brand in the US sports betting space, yeah, act like it. That’s all we’re asking of you. Also don’t aggregate every video like every other sportsbook does on Twitter. That would be great.
Matt Brown (10:13):
That’s the only other one. But, Adam, I don’t want to belabor this too much. Because, again, it’s like we said, they’re basically an afterthought when it comes to stuff these days. But for one, the tweet is still up. For two, it’s the last tweet from the account from five days ago. So, it’s like someone running the Twitter account must have gotten in trouble, or at least mildly reprimanded, for doing this, but then didn’t delete it, and then, basically, they’re just on suspension. And so, the whole account is on suspension or something. It’s crazy.
Adam Candee (10:42):
Well, remember, we reported a couple of weeks ago that Bally was cutting 15% of its interactive workforce. Maybe that person just ended up on the chopping block immediately after that tweet. Or maybe, here’s another conspiracy theory. Maybe the social media manager knew they were losing their job and decided to go out in a blaze of glory.
Super Bowl Betting projections
Matt Brown (11:02):
Oh. Hey, you know what? That’s not out of the realm of possibility these days, actually. So I’m, actually, going to go with that one. You know what? We’ll go with that one with everything. But again, guys, you’re representing a brand. It’s not your own personal blog. Just represent the brand. Adam, it is a big game here on Sunday. A game in which we have, again, it’s like one of those things where when a new state’s launched, what we say every single time, will they be launched by the Super Bowl? Is it going to happen by the Super Bowl? It’s the thing that we always put as a tent pole thing of, “Oh, you’ve got to be going by then so that you can maximize your revenue.” Rightfully so, because it’s the most casually bet sporting event on the face of the planet. So, what are we looking at here from, let’s call, early projections?
Adam Candee (11:48):
So, you’re going to hear a lot of chatter today, and we’re recording this on Tuesday, with the American Gaming Association’s projections. And they do these every year. They talk about how much is going to be spent on the game. But understand that when you see a number $16 billion wagered from the American Gaming Association, they are still, quite stubbornly, including offshore and bookies in that number. We here at LSR are trying to project a little bit of what we think will be legally wagered on the Super Bowl. And our projections, Eric Ramsey, former friend of the podcast here, who does some of this work for us, has a story that’s coming at Legal Sports Report where he projects about $1.125 billion to be wagered on the Super Bowl.
That would be the first ever billion-dollar Super Bowl in the legal US sports betting industry. A couple of things to keep in mind. Not every state breaks its Super Bowl handle out individually. So we don’t necessarily know that we’re going to get an accurate count of every state in terms of how much was wagered on the Super Bowl. But some of the larger states do. We get it from Jersey. We get it from Nevada. And we also know that, this year in particular, we finally have a team from a legal sports betting state that is in the Super Bowl to help boost that handle up with the Eagles coming from Pennsylvania.
Matt Brown (13:08):
Right, Dustin, that was what I was going to bring up, as well, is, I mean, listen, we have to assume there’s going to be just a natural tick up here because you get a state with a rabid, rabid fan base as it is anyway. And even if, for somehow, you have avoided signing up at any of these sportsbooks so long, even if you were interested in doing it, they’re going to get some new people sign up in Pennsylvania. It’s going to happen. There are going to be some people who sign up just to bet on the team in the Super Bowl this year. So, you’ve got to assume it’s probably going to be a decent little tick, I would think.
Dustin Gouker (13:43):
Yeah. I mean, I think they might not even see the numbers come out this way. But it’s more customer acquisition, I think …
Matt Brown (13:48):
Dustin Gouker (13:48):
… when you look at it, right? People who would not place a bet the rest of the year on anything might sign up for the Super Bowl in Pennsylvania or Kansas, right across the border from Kansas City. Lots of Chiefs fans there. So, yeah, you look at it that way, it’s got to make a difference. Is it a huge difference? I’m not here to tell you that. But it is the first time we’ve had any connection between that. The only other time is the Eagles 2018, Jersey had legal sports betting. But that’s, obviously, different than Pennsylvania.
Matt Brown (14:16):
Dustin Gouker (14:17):
So, it is interesting to have this dynamic, and also have Arizona where the Super Bowl is being played, have legal betting, as well. So, it’ll be interesting to see where it all bears out, the biggest one. Nevada has continued to be the No. 1 state for sports betting for the Super Bowl because of the dynamic. People still go to Nevada, watch it at sportsbooks. Super Bowl is still a destination for Nevada, and they also get these big huge bets from people. They get spread out across the country, but most of these huge bets are still coming in Nevada because of that. Is that going to change here? Eric, I think, projects that it’s not yet, that Nevada will still be the No. 1 state in terms of handle for sports betting. So, we’ll see where it goes. Definitely interesting to see what all this means and how it affects the marketplace in the United States.
PENN Entertainment (Barstool) changing tactics
Matt Brown (15:04):
So, close things out here with a sportsbook that we have talked a lot about on the podcast typically, not necessarily in the greatest light, and a lot of that was them bringing stuff on themselves, but we were questioning before Barstool even launched anywhere, guys. So, I think this is fair. We did question whether the strategy of, “Oh, they’ll just come because they like us, and we’re cool and we’ve got all these forums and these different sites and whatever. They’ll come. Don’t worry about it.” And didn’t spend any money on traditional marketing. Certainly, nothing like we would see from the big boys out there right now. But, Dustin, it looks like maybe that strategy, whenever we look at their market share, now that they’ve been around for a little while, that strategy didn’t really end up paying off.
Dustin Gouker (15:51):
Yeah. So, Penn Entertainment, parent company of the Barstool Sportsbook brand, Barstool Sports, now it’s fourth quarter results. The interesting thing here is, yes, this change in tact for Barstool Sportsbook. Because when it was acquired, the value proposition was, “We don’t need to do marketing. We own the media. We own Barstool Sports. That is our path to getting customers.” And that path to customers has not really borne out. I think we were saying there’s holes from day one. We got touted 66 million, or whatever it was, users of Barstool, that a lot of those were just going to become Barstool Sportsbook users. That has not been the case to any great degree. They are a small part of the US sports betting market as it stands here. Certainly, below this top tier of FanDuel, DraftKings, Caesars and MGM in whatever order they are in every state.
Sometimes, they’re ticking into that. But this is a pretty big departure because this was the value. The value is not that you had to go out and market Barstool, that Barstool was the marketing. So, I think it’s the fact that you have to do this, I think it’s smart that they’re finally pivoting from this, that they have to do marketing. They can’t just rely on this because, I think it’s pretty clear at this point, they’re not going anywhere without additional marketing. So it’ll be interesting to see where this goes. But clearly Penn and Barstool have designs on more of the market than they have right now. And without that marketing spend, there’s no clear path to get it.
Matt Brown (17:14):
And Adam, I mean, listen, I think this really and truly should maybe be the end of this strategy, really, in general, right? Because if we look, these companies that have just come in and be like, “Oh, no. We’re going to get by on reputation alone.” I mean, I think maybe the only one that could get away with that would be ESPN if they ever did partner with someone. But look, we saw theScore not really work, and they were thinking, “Ah, it doesn’t matter. We’re theScore. We’ve got all these people on the app and whatever. It doesn’t really matter.” RIP MaximBet. We have the SI Sportsbook that no one bets. It’s SI Sportsbook and whatever. So, it’s like, yes, there’s these brands that it either currently, or at least one time, were major brands and things like that, that just because you slap on that brand to something doesn’t necessarily mean that people are coming to your place.
Adam Candee (18:04):
And the biggest challenge we’re going to see to that is going to happen this year. It’s going to be Fanatics, right? Fanatics is going to try this, and they’re coming at it from a unique angle. Because when we talk about DraftKings and FanDuel, DFS companies that built up enormous databases of people who clearly wanted to bet but just couldn’t, and then they were easily able to activate those folks. Versus the media model of someone, like theScore or Barstool, which, maybe not coincidentally, are both owned by Penn Entertainment. Now, those companies were not able to do that. Fanatics is going to be somewhere in a gray area, right?
They have customers who they know have been willing to spend on sports-related items. They just don’t know if those customers are willing to bet with them. And it’ll be fascinating, I think, to see what they’re able to do and consider the fact that their database is so massive that they have to activate a fraction of what Barstool Media would have to do in order to have a profitable enterprise. So overall, I think it’s really interesting that Barstool’s going to go this way and Penn is clearly doubling down, tripling down, they are on the line to buy the rest of the company as they were planning on doing, and they’re going to go hard after it.
Matt Brown (19:15):
Yeah, I’m with you. And I do think it is at least a little bit of a different animal, like you mentioned, because I’m not saying that these other companies don’t have merch and stuff or anything like that. But typically, it’s the Barstool, Sports Illustrated, Maxim, you’re a fan of the brand, right? And so, that’s the reason you’re going to come and you’re going to do this. Whereas Fanatics, it’s like, “Well, no, no, no. You have spent money with us because you are just a fan of everything else. You’re just a fan of sports in general, and so you have spent money. We know you’re willing to spend money, so here’s just another way for you to spend money on things that you like or something.” So, I do think it’s going to be super fascinating and super interesting to see how that all plays out, for sure.
Guys, everything we do, absolutely free. So, head over to legalsportsreport.com, take in all the great words Adam and team are doing over there on LSR. We do appreciate it. And of course, if you want to help us out a little bit, the only thing you’ve got to do, hit that subscribe button down below. Rate, review also helps us climb up the chart. So, we also appreciate that. If you want to follow Dustin on the Twitter @DustinGouker, Adam Candee is two E’s, no Y, and I am @MattBrownM2. For Adam, for Dustin, I’m Matt. Talk to you guys next week.