Burry Buys DraftKings, Flutter on Regulation Crackdown Bet
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- Michael Burry disclosed a new position split roughly 60% in Flutter Entertainment (bought at ~$107/share) and 40% in DraftKings (bought in the low $26s), saying he could grow each holding into a full standalone position.
- Burry predicted prediction markets 'will be subsumed into regulation and taxation' because they exist in 'a loophole adjacent to a heavily regulated and taxed industry.'
- DraftKings shares have fallen about 45% from their 52-week high hit last September, while Flutter has slid 65% from its August peak.
- The U.S. Commodity Futures Trading Commission asserts jurisdiction over event-based contracts on prediction markets and is currently in legal action against multiple states over who regulates the platforms.
- Prediction market contracts have sidestepped state gaming taxes — a gap Burry said the political climate will not tolerate.
- Both DraftKings and Flutter are exploring their own prediction-market offerings, which Burry noted could position them to benefit regardless of how the regulatory landscape evolves.
Why it matters: Burry's thesis hinges on a regulatory tightening of prediction markets that would relieve the pressure that has pummeled DraftKings (45% off its 52-week high) and Flutter (65% off its August peak). With the CFTC already suing multiple states over prediction-market jurisdiction, the legal groundwork for the crackdown he's betting on is already in motion — and both sportsbooks are hedging by building their own prediction-market products.
