Burry Goes Long Flutter and DraftKings, Bets Prediction Markets Get Regulated

Michael Burry has flipped bullish on regulated sportsbooks. Burry has established full-sized long positions in sports betting leaders Flutter Entertainment (60% weighting) and DraftKings (40% weighting). Burry stated he initiated his DraftKings position in the low $26s and purchased Flutter shares at approximately $107.

The trade thesis

Burry believes prediction markets are currently exploiting regulatory loopholes and will eventually face oversight and taxation, at which point regulated gaming operators will benefit. In other words, the pain in FLUT and DKNG tied to Kalshi and Polymarket taking share is, in his view, temporary.

Burry argues that alternative prediction exchanges currently capitalize on a “loophole economy” that regulators and tax authorities will eventually dismantle.

Why now

Flutter and DraftKings shares have plummeted roughly 61% and 36%, respectively, over the past year. That drawdown is the setup Burry is buying into.

He views both as reaching an operational inflection after years of heavy spending and market-share battles. Burry sees value in DraftKings’ transition to a better operating entity while acknowledging that Flutter has been hindered by some missteps, but remains a fundamentally sturdy company.

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Regulatory backdrop

The U.S. Commodity Futures Trading Commission has proposed rules to bring parts of the sector under derivatives oversight. That is the catalyst Burry is leaning on to see prediction platforms lose their edge over licensed sportsbooks.

The allocation is weighted approximately 60% toward Flutter and 40% toward DraftKings, though he indicated he may scale each into a full standalone position over time.

Market reaction

The announcement triggered an immediate reaction on Wall Street, sending shares of DraftKings and Flutter spiking to session highs before closing with more modest gains. DraftKings stock was up 0.99% at $27.44 and Flutter Entertainment shares were up 0.51% at $111.89 during after-hours trading on Wednesday.

Watch for follow-through flow now that a high-profile disclosure has put a floor narrative under the group. Traders can track sentiment and unusual activity across the space on Unusual Whales news.

Options market and stocks to watch

FLUT: Watch for call flow and IV response given Burry’s heavier 60% weighting and the year-long drawdown.

DKNG: Watch for continuation of the bounce off the low $26s and any positioning around the “operational inflection” narrative.

KALSHI-adjacent names and prediction-market exposed tickers: Watch for relative weakness if CFTC oversight headlines pick up.

PENN and MGM: Watch for sympathy moves across regulated gaming if the Burry thesis gains traction.

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