Michael Burry goes long DraftKings and Flutter, sees 60% upside

Famed "Big Short" investor Michael Burry bought shares of DraftKings Inc. and Flutter Entertainment plc, betting regulators will rein in prediction markets that have undercut traditional sportsbooks.

"Prediction markets exist in a loophole adjacent to a heavily regulated and taxed industry," Burry said. "In time, prediction markets will be subsumed into regulation and taxation."

Burry purchased DraftKings at about $26 a share and Flutter at about $107, according to his public comments. He weighted the position 60% toward Flutter and 40% toward DraftKings. DraftKings trades at $26.48, down more than 20% this year, while Flutter at $110.84 has lost nearly half its value.

The bet hinges on a bipartisan Senate bill introduced in March — the "Prediction Markets Are Gambling Act" — that would ban federally regulated prediction markets from listing sports-related contracts. If passed, the legislation would remove a key competitive threat from platforms like Kalshi and Polymarket, which have operated nationwide under CFTC oversight while traditional sportsbooks navigate costly state-by-state licensing.

Prediction markets have captured significant betting volume. Super Bowl-related contracts saw over $1 billion in trading volume in 2026, and a single March Madness winner contract logged more than $100 million. States have a growing incentive to act: sports betting tax revenue rose 382% to $917 million in the second quarter of 2025 from $190 million in the third quarter of 2021.

Wall Street analysts broadly agree with Burry's bullish view. The MarketBeat consensus price target on DraftKings is $34.30, implying about 30% upside, with 30 of 40 analysts rating the stock a Buy. For Flutter, the consensus target of $178.83 implies roughly 60% upside, with 18 of 29 analysts at Buy.

Both companies have hedged against the possibility that prediction markets survive. DraftKings and Flutter have rolled out their own prediction market offerings, allowing them to benefit from growth in the space regardless of the regulatory outcome. Flutter's "FanDuel Predicts" product was designed to capture incremental growth in states like California where traditional sports betting remains blocked, with the company budgeting $200 million to $300 million in losses to build the product.

The position marks a notable shift for Burry, who has recently been known for bearish bets against AI-related stocks. His move into sportsbooks signals confidence that the beaten-down sector is poised for a recovery driven by regulatory tailwinds. Investors will watch the bill's progress through the Senate Agriculture Committee as the next key catalyst for the stocks.

This article is for informational purposes only and does not constitute investment advice.