FedEx Gambling Story: How the Founder Saved the Company by Gambling $5,000 on Blackjack

The FedEx gambling story fascinates, and it is anything but a good example of how to run a company. When you are down to your last $5,000 and facing millions of debt, you do not go to Las Vegas, Nevada, to gamble what precious little you have.

However, this is precisely what Federal Express founder Fred Smith did in 1973, when his company, having raised $80 million in loans and equity, faced an imminent threat of bankruptcy and ceasing operation due to a lack of fuel.

Smith, though, did not accept that his college project would end that way, so he went to Sin City to gamble and play the only game that he understood – blackjack.

FedEx Owner Gambled in Vegas to Save the Company – He Succeeded

The story goes as this. In 1973, Frederick Wallace Smith had already had FedEx up and running. He had secured $80 million in loans and equity, but the crisis of the day and subsequent shock in prices in the oil market meant that the company’s trade was now greatly strained.

Smith was down to his last $5,000 when he realized that he was now going to sink his entire empire he had founded in 1971 and which he knew would change the way we send and receive parcels, mail, and packages.

In 1973, he had run out of money and needed a business loan that fell through, immediately making him realize that FedEx was out of options and his company would collapse, unable to pay for fuel.

So, Smith did the only thing that he thought would work – he went gambling in Las Vegas, Nevada. The win itself, although anecdotical and amusing, was never glorified by Smith. He saw it as a means to an end, and he would much rather tell people why he chose to gamble.

His $5,000 would not help him last more than two days, when he decided to bet it on the game of chance. With some luck, Smith gambled and won $27,000 from blackjack, which he wired back to his company, which was then able to purchase enough fuel to sustain the company for another week.

Deploying his charm offensive in the days after the win, FedEx’s founder and late CEO was then able to raise another $11 million and insulate the company against the raging oil price shock.

‘I Wasn’t Going to Go Out Without a Fight’

Winning the $27,000, Smith knew that his spot of good luck was not, as he described it, "decisive." The FedEx CEO called the win an omen, but hardly enough to keep the company afloat.

However, ruminating about the win, he said that his decision to gamble came from a desire to keep going and not go down "without a fight."

Smith insisted that he was committed to his investors and backers and wanted to see not only his company work out but also make Federal Express the success he imagined it could be back in college.

His fateful blackjack win came after he tried to get General Dynamics to invest in his company and bail him out. Realizing that he was out of options, he took the money and turned it into what is possibly the most successful gamble in history.

While one week of operational expenses was hardly enough, Smith did it – FedEx was ultimately saved by gambling.

FedEx’s business model was rated "C" by a college professor

FedEx’s story is one of genuine innovation and bold risk. Fred Smith had graduated from college and served in Vietnam as a Marine, and he had both the determination of body and soul to see his project through.

The idea of FedEx was first born in college, where he submitted a term paper in which he theorized the possibility of speeding up deliveries significantly by simply adjusting the delivery routine for companies and boosting efficiencies.

His college professor at the time ruled out the idea and gave him a C. After he served in the military and was dispatched to Vietnam, Smith bought Arkansas Aviation Sales when he revisited his Yale years idea and figured that it could help him set up the company for success.

By 1973, FedEx had achieved what many thought would not be possible – to provide overnight deliveries in the United States, an Amazon of its day, that few thought possible. Investors kept coming, but skepticism grew as the Oil Embargo of 1973-1974 took a chokehold on the company and quickly sent it into a metaphorical tailspin.

Although investors weren’t thrifty and Smith continued to bring fresh capital in, the oil crisis quickly took its toll on the company, leading to the anecdotical FedEx gambling story that almost everyone links with the company (as well as delayed deliveries).

The FedEx Gambling Story had a happy ending, but not all do

FedEx CEO Fred Smith would tell you so himself – gambling is never a winning business strategy, but taking a chance, and using your scant resources in a last-minute attempt to save your company might be.

Smith did not save the company by gambling per se – he took his last best option and acted on it. While the impulse was entrepreneurial in its core, it was hardly a good business strategy, and this is why Smith never actually took pride in his accidental blackjack win that helped him tide over another week before he got more money.

Say what you will about FedEx, but it has been built by a true visionary who once got a C on his term paper, only to use it and build a multi-billion-dollar company that is still having its rough patches, but its debt has improved, and the company’s stock has been doing well.

True, Fred Smith’s decision to gamble on that fateful day might be the only reason the company survived, but it is hardly the only reason why the company is still around. His legacy lives on, even if the man himself passed away in June 2025.

FedEx Gambling Story FAQs

Why are people talking about FedEx and gambling?

FedEx CEO and founder Fred Smith once gambled the company’s last $5,000 and won $27,000, keeping the business running for another week before he secured extra funding. Had he failed, the company would not have made it.

Did FedEx's CEO keep gambling afterwards?

Not really. Fred Smith only gambled to try and win enough money to buy fuel during the Oil Embargo of 1973-1974. He kept the company running for a week more before securing a bigger investment.

Would FedEx be around today without the CEO winning the money?

Probably not. FedEx would have had to file for bankruptcy, and would most likely have been reduced to creditors fighting to secure a sizeable chunk of the remaining assets.