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Michael Burry Invests in Flutter and DraftKings, Expects Stricter Regulation for Prediction Markets
Summary
Famed investor Michael Burry has purchased shares in sports-betting companies Flutter Entertainment and DraftKings, wagering that the competitive threat from lightly regulated prediction markets will fade under future government scrutiny.
Michael Burry, the investor known for predicting the 2008 U.S. housing market collapse, has acquired shares in sports-betting platforms Flutter Entertainment and DraftKings. According to a post on his website, the move is based on his expectation that regulatory changes will soon curb the advantages held by competing prediction markets.
Burry identified prediction markets as the primary threat to companies like Flutter and DraftKings. These markets allow trading on event outcomes and currently operate nationwide under the oversight of the Commodity Futures Trading Commission (CFTC). This structure, Burry noted, allows them to avoid the state-level gaming taxes that are levied on traditional sports-betting operators.
In his analysis, Burry described the current situation as a "loophole" existing alongside a heavily regulated and taxed gambling industry. "I believe that the political climate will not tolerate this," he wrote, adding that he expects prediction markets will eventually face similar regulation and taxation, leveling the competitive landscape.
AdThe investor disclosed that he bought Flutter at about $107 a share and DraftKings "in the low $26s," with the combined investment forming a full-sized position. He characterized Flutter as a strong business with significant scale and noted that DraftKings is improving as an operating business.
Separately, Burry also revealed that he increased his investment in the e-commerce company JD.com, which he now considers one of his top three holdings. He suggested that Chinese and Hong Kong stocks may benefit as investor enthusiasm for AI and memory-chip stocks in other Asian markets begins to wane.