Michael Burry Acquires Stakes in DraftKings and Flutter, Citing Looming Regulation of Prediction Markets

Michael Burry attended the premiere of ‘The Big Short’ at New York’s Ziegfeld Theatre on November 23, 2015.

Dimitrios Kambouris | Getty Images

Michael Burry, known for forecasting the 2008 housing crash, announced that he had acquired stakes in regulated sports‑betting firms DraftKings and Flutter Entertainment, citing expectations that regulators would eventually curb prediction markets amid intensifying competition.

Burry disclosed on Wednesday that he had taken a full‑scale position, allocating roughly 60% to Flutter and 40% to DraftKings, purchasing Flutter shares at approximately $107 each and DraftKings shares in the low $26 range, with plans to potentially expand each holding to a full, independent position.

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DraftKings one year

The investor, who gained fame for forecasting the 2008 U.S. housing crash, argued that both firms represent attractive businesses whose stock prices have been pressured by the rapid growth of prediction markets.

These platforms have increasingly introduced event‑based contracts, which the U.S. Commodity Futures Trading Commission claims fall under its jurisdiction. The agency is presently involved in litigation with several states over the authority to regulate prediction markets, while the contracts have also managed to avoid state gaming taxes.

“I believe that the political climate will not tolerate this,” Burry said in a Substack post Wednesday. “Prediction markets exist in a loophole adjacent to a heavily regulated and taxed industry. In time, prediction markets will be subsumed into regulation and taxation.”

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Flutter Entertainment one year

Shares of DraftKings have declined roughly 45% from their 52‑week high recorded in September, whereas Flutter’s stock has fallen about 65% from its August peak.

“DraftKings is inflecting as an operating business and the value is in the transition I foresee in the near future,” he wrote. “Flutter has been hurt by capital misallocation in the past, but is a fundamentally very good operating business with terrific scale.”

Both firms have also begun developing their own prediction‑market products, which could allow them to profit regardless of how the regulatory environment ultimately evolves, Burry observed.

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