On Thursday, Penn Entertainment announced that it finished up 2022 with a fourth quarter that reached $1.6 billion in revenue. Even with some obstacles to overcome, it improved on year-over-year figures for Q4 by about 0.8%.
Last year, Jim “Mattress Mack” McIngvale made headlines when he placed some considerable bets on the Houston Astros to win the World Series. The Astros did win the series, and McIngvale won sums large enough to affect the bottom lines of some PA sportsbook operators.
The most notable was Penn Entertainment, who accepted a $2 million wager from McIngvale through the operator’s Barstool Sportsbook. It paid out $10 million for the successful wager, but still managed to expand its earnings.
Penn Entertainment takes hit on Mattress Mack World Series bet
We now know the effect one of those bets had on Penn Entertainment, who released their fourth quarter 2022 earnings report yesterday.
Ultimately, Penn had a profitable Q4 despite the $10 million payout that went to McIngvale. Penn brought in $1.6 billion across all of its companies, a year-over-year increase of 0.8%.
It was Penn’s broad portfolio that smoothed out the rough patch. Penn Entertainment operates 31 retail sportsbooks across 14 states, in addition to casinos, racetracks and the Barstool Sportsbook app.
Penn investors braced for impact last quarter
The $2 million bet McIngvale placed at a Barstool Sportsbook in Lake Charles, Louisiana, came up during Penn Entertainment’s third quarter earnings call with investors in November.
Penn’s chief executive officer, Jay Snowden, mentioned his prediction of how the bet could affect their Q4 numbers.
“And I think if Mattress Mack doesn’t hit, we’ll be profitable Q4; if he does, then it will probably be closer to breakeven-ish somewhere in that range.”
Penn fared better in Q4 than predicted
In the Q4 call on Feb. 2, Snowden credits Penn’s growing interactive segment for tipping the scales to profitability. He said:
“Despite the Mattress Mack $10 million winning bet on the Astros in the World Series [the interactive segment] was profitable in the fourth quarter with several successful state launches and impressive growth in Ontario.”
Penn’s interactive segment made a $5.2 million profit on $208 million in revenue in the fourth quarter.
Penn purchased the Toronto, Ontario-based Score Media and Gaming for $2 billion in 2021, and have since rolled out its own tech stack in Canada, allowing it to add new features and betting markets, Snowden said in the call.
McIngvale’s $3 million bet with Caesars also a winner
McIngvale placed a total of $10 million in bets on the World Series across multiple sportsbooks. The Astros’ second-ever championship win in November netted McIngvale $75 million.
McIngvale placed an even bigger World Series bet with Caesars Sportsbook in May. That was a $3 million wager at 10-1 odds, which paid out $30 million.
Ken Fuchs, the chief operating officer of Caesars Digital, called McIngvale’s payout the “the biggest check in sports betting history,” in a CNBC article.
Caesars’ earnings report for the fourth quarter has not yet been released.
