Michael Burry Bets Big on DraftKings and Flutter, Says Prediction Markets Face a Regulatory Reckoning

Michael Burry, the investor best known for predicting the 2008 housing crash, has taken a full-sized position in Flutter Entertainment and DraftKings, arguing that both sportsbook operators are undervalued because the prediction-market boom pressuring their stocks won’t escape regulation forever. Burry said Wednesday he bought Flutter around $107 a share and DraftKings in the low $26s, splitting the bet roughly 60/40 in Flutter’s favor.

Both stocks have taken a beating this year as CFTC-regulated platforms like Kalshi and Polymarket have expanded into sports-outcome contracts. Flutter is down about 65% from its August peak, while DraftKings has fallen roughly 45% from last September’s 52-week high.

Why Burry Sees a Loophole Closing

Writing on his Substack, Burry laid out his thesis bluntly: prediction markets operate in “a loophole adjacent to a heavily regulated and taxed industry,” offering nationwide sports event contracts under CFTC oversight while avoiding the state licensing fees and gaming taxes that DraftKings and Flutter must pay. “I believe that the political climate will not tolerate this,” he wrote, predicting prediction markets will eventually be “subsumed into regulation and taxation.”

The call comes as the fight over who regulates sports-related event contracts intensifies. The CFTC claims exclusive federal jurisdiction, while states including Nevada and Arizona have pushed back with enforcement actions arguing the platforms are running unlicensed sports betting operations under a different name.

Two Bets, Two Different Rationales

Burry described DraftKings as “inflecting as an operating business,” pointing to near-term operational improvement, while calling Flutter “a fundamentally very good operating business with terrific scale” that has simply been mismanaged on the capital allocation side. He left open the possibility of building both into full standalone positions.

He also flagged that both operators are hedging their bets by building their own prediction-market products: DraftKings launched its DKeX exchange this month, and Flutter has already rolled out FanDuel Predicts, positioning both sportsbook giants to compete either way the regulatory dispute shakes out.