Michael Burry buys Flutter, DraftKings shares, betting prediction-market threat will fade

Michael Burry, the investor renowned for predicting the 2008 housing market collapse, has made significant investments in sports-betting platforms Flutter Entertainment and DraftKings. Burry acquired Flutter shares at approximately $107 and DraftKings at prices in the low $20s, with these investments forming a substantial portion of his portfolio.

Burry's investment strategy appears to be a bet against the growing influence of prediction markets. He identifies these markets as the primary threat to Flutter and DraftKings, noting their ability to offer event contracts nationwide under Commodity Futures Trading Commission oversight, thereby bypassing state gaming taxes. Prediction markets allow traders to buy and sell contracts based on the outcomes of various events, including sports, elections, and economic data.

He argues that these platforms exploit a regulatory loophole, operating alongside a heavily regulated and taxed gambling industry. "I believe that the political climate will not tolerate this," Burry stated, expressing his expectation that prediction markets will eventually face similar regulation and taxation. This regulatory shift, he believes, will level the playing field for traditional sports-betting companies.

Despite Flutter's 50% year-to-date decline and DraftKings' 21% drop, Burry sees value in both companies. He described Flutter as a strong business with significant scale, while noting DraftKings is showing signs of operational improvement. In addition to his sports-betting investments, Burry also increased his holdings in JD.com, identifying it as a top-three position. He anticipates that Hong Kong and Chinese stocks will benefit as the current enthusiasm for AI and memory chips in South Korea and Japan begins to wane.

“

I believe that the political climate will not tolerate this.