Michael Burry Initiates Long Positions in DraftKings and Flutter as Shares Fall 36.3 Percent and 61.2 Percent

DraftKings shares have fallen 36.3% and Flutter Entertainment shares have fallen 61.2% over the past year. Michael Burry has initiated long positions in both. The data show much of the decline stems from rising volume in prediction markets.

Burry started his DraftKings stake in the low $26 range. He outlined his rationale in a Substack post. News of the positions comes as some other prominent investors have reduced stakes in the sports betting names. According to reporting by Casino.org News, Burry sees fundamental value despite the headwinds.

DraftKings Inflecting as an Operating Business

Burry highlighted the potential in how these businesses are evolving. “DraftKings is inflecting as an operating business, and the value is in the transition I foresee in the near future,” he wrote in the post.

That inflection point matters for operators. The shift from early market capture to sustainable operations changes priorities around efficiency and risk controls. Scale becomes a competitive edge once the initial build costs are absorbed.

The same lens applies to Flutter Entertainment. Past capital misallocation has hurt the company but it is fundamentally a very good operating business with terrific scale. “Flutter has been hurt by capital misallocation in the past but is fundamentally a very good operating business with terrific scale.”

Specific missteps at Flutter included the surprise May departure of former CEO Amy Howe and June news of several hundred layoffs. These events contributed to the stock pressure. Yet Burry maintains the core business retains strength.

From the supplier side this kind of transition is where real operating leverage appears. Platforms that stabilize their models can better handle segment volatility.

Prediction Markets Operating in a Loophole Economy

Much of the blame for the stock declines lands on prediction markets such as Kalshi and Polymarket. Data confirm volume on yes or no exchanges is exploding. Much of that turnover comes from traders’ affinity for sports derivatives.

Burry views the segment as temporary in its current form. “Prediction markets exist in a loophole adjacent to a heavily regulated and taxed industry,” Burry wrote. “In time, prediction markets will be subsumed into regulation and taxation.”

This creates a specific risk for pure prediction market players. A regulatory tightening could alter their cost structure and margins quickly. DraftKings and Flutter hold a different position.

Through DraftKings Predictions and FanDuel Predicts both companies are already active in the space. If tighter rules arrive they can lean into their established iGaming and online sports betting operations. That diversification reduces vulnerability relative to standalone prediction platforms.

The counterpoint sits in timing and execution. Volume growth continues in the near term. Operators must manage the customer overlap while the regulatory framework remains loose. The exploding activity shows bettor interest has shifted toward these formats.

Burry’s Track Record in Gaming Equities

Michael Burry brings prior experience to these positions. He is not new to gaming stocks. In 2020 he held stakes in Las Vegas Sands and Wynn Resorts. Those calls came during the early coronavirus period when casino equities faced severe pressure.

In 2023 Burry’s hedge fund held an investment in MGM Resorts International. At one point that position represented more than 7% of the Scion portfolio.

Earlier this year Burry pitched MGM and Wynn as “Plan B” acquisition targets for GameStop. He remains a major shareholder in the video game retailer which has since floated a takeover offer for eBay.

The pattern shows Burry often targets names with solid fundamentals after periods of underperformance. The current stakes in DraftKings and Flutter follow that approach. Depressed valuations create entry points when operating improvements appear imminent.

Where the Real Value Lies

Burry’s positions reinforce that scaled sports wagering businesses carry durable fundamentals even when prediction markets capture attention and volume. The transition he describes at DraftKings and the scale at Flutter represent the core assets.

In my experience across supplier and data infrastructure roles the operating inflection creates lasting advantages. Risk controls tighten. Margins stabilize. Customer acquisition costs get optimized once the hype phase passes.

The open regulatory question around prediction markets will shape competitive dynamics. When subsumed into standard taxation and oversight the operators with established compliance and diversified products stand to benefit most. Pure plays face steeper adjustment costs.

Industry executives should track both the volume data and any regulatory signals. The current loophole dynamic will not last indefinitely. Those who use this period to strengthen core operations will capture the value Burry has identified. The data on stock performance and Burry’s entry provide a clear marker for where that value sits today.

Reporting: ‘Big Short’ Investor Burry Betting on DraftKings, Flutter (www.casino.org)