Michael Burry has taken positions in Flutter Entertainment and DraftKings, arguing that regulatory pressure will reduce the competitive threat posed by prediction markets to licensed sportsbooks.
Burry said he bought a full-sized position split roughly 60% in Flutter and 40% in DraftKings, with Flutter acquired at about $107 per share and DraftKings in the low $26 range. He said the holdings could eventually become full standalone positions.
The trade comes after sportsbook stocks were pressured by the growth of event-contract platforms, which have offered sports-related markets under federal commodities regulation rather than state gambling frameworks.
Burry described prediction markets as operating in “a loophole adjacent to a heavily regulated and taxed industry,” adding that they would likely face regulation and taxation over time.
That regulatory question has become central to the US sports-betting market. Kalshi has faced actions from several states, while courts have reached differing conclusions on whether federal commodities law preempts state gambling laws.
A New York federal judge this week rejected Kalshi’s request to block state enforcement against sports contracts, while a Michigan court ordered the platform to halt sports markets in the state during ongoing litigation.
The issue also affects the companies Burry is backing. DraftKings has moved into the sector through DKeX, a proprietary prediction markets exchange built using the technology and CFTC license acquired through Railbird Technologies. DraftKings said sports event contracts are available in 18 states.
Flutter’s FanDuel has also built exposure through FanDuel Predicts, including a partnership with Crypto.com and OG Prediction Markets. FanDuel says the product is available across all 50 states for financial and economic markets, with sports and entertainment contracts available in states where FanDuel does not offer sports betting.
Burry’s position therefore reflects a view that established sportsbook operators may be better placed if event-contract products are brought closer to gaming taxation and compliance standards. It also reflects the possibility that DraftKings and Flutter could participate in the prediction markets segment while retaining their core sportsbook scale.
In June, Global Gambling Insider reported that DraftKings launched DKeX, a proprietary prediction markets exchange integrated into its DraftKings Sports & Casino app, as annualized consumer volume on DraftKings Predictions reached about $3.4bn.
Flutter owns FanDuel, one of the largest online sportsbook operators in the US market
