A New York City bar is taking a page out of Houston furniture mogul Mattress Mack’s infamous sports betting promotional playbook.
The Jeffrey, a popular bar located on the Upper East Side of Manhattan, is holding a very special promotion for Game 1 of the NBA Finals between the New York Knicks and San Antonio Spurs on Wednesday. If the Knicks win, the bar will cover everyone’s tab that night. That’s because the bar’s tab will actually be covered with a bet on Kalshi, the online prediction market, that will hedge the promotion. A Knicks win or loss is still a win for The Jeffrey.
“We want our customers to feel the magic of this moment,” said Andy Freedman, owner of The Jeffrey, told Kalshi. “But we’re a small business; we can’t just eat a full night’s revenue on a whim. Kalshi lets us make the boldest possible promise to our customers and know we’re covered no matter what.”
Simply put, The Jeffrey has bought a $5,000 Kalshi contract that will be paid out if the Knicks win. The Kalshi payment will make up for the loss if it occurs, and all tabs are erased. If they lose, the bar receives a staggering increase in income from the promotion. It’s the type of hedging that Houston’s favorite gambler and mattress magnate has been doing for years.
The hedging of massive promotions with sports betting has long been pioneered by Jim “Mattress Mack” McIngvale, who has been holding promotions for Gallery Furniture betting on local professional sports teams. The promotions usually allow customers to purchase thousands of dollars’ worth of furniture, and if, say, the Astros win the World Series, they get their purchases refunded, because the bet is hedged by an extremely large wager McIngvale placed.
Customers get free furniture if the team Mack bets on wins; if they don’t, he still benefits from increased sales due to the promotion.
In 2022, McIngvale won an astounding $75 million when the Astros won the World Series, after betting $3 million for the Astros to win. Of course, there was a promotion that ran along with it, with this bet and hedging being his most lucrative to date.
Kalshi, the controversial prediction market, is attempting to appeal to the likes of McIngvale to use it as a tool to offset potential losses and ensure profit, or at least peace of mind. On his Substack Event Horizon, gambling analyst Dustin Gouker compared the odds on Kalshi versus a sportsbook like DraftKings, with DraftKings having better odds.
The idea is the same, but sportsbooks already exist. Prediction markets like Kalshi, which trade not only in sports but also in world events like the war in Iran, are a newer phenomenon. While they continue to grow and bombard us with advertisements over the money to be made by predicting world events, the services are still highly scrutinized. Even more so than something like sports betting, which, while becoming ever more popularized, is still illegal in many states, including Texas.
Meanwhile, McIngvale will probably stick to driving across state lines or flying to Vegas to place his enormous wagers instead of using something like Kalshi.