Michael Burry said on Wednesday that he is leaning into sports betting, adding long positions in DraftKings Inc. (NASDAQ:DKNG) and Flutter Entertainment plc (NYSE:FLUT), while cautioning against fast-growing prediction markets.
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Burry Bets on Sportsbooks
CNBC reported, citing Wednesday’s "Cassandra Unchained" substack post, that Burry built stakes in DraftKings and Flutter Entertainment, parent of FanDuel. He views both as reaching an operational inflection after years of heavy spending and market-share battles.
"DraftKings is inflecting as an operating business and the value is in the transition I foresee in the near future," he wrote, per CNBC. "Flutter has been hurt by capital misallocation in the past, but is a fundamentally very good operating business with terrific scale."
Burry’s comments highlight a focus on cash generation and scale rather than top-line growth in a crowded U.S. market.
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Context: Flutter’s Missteps and DraftKings’ Pivot
Flutter faced investor skepticism due to uneven U.S. growth and capital deployment that pressured margins. Burry’s view suggests those issues are largely behind it. Its global footprint and the FanDuel brand may provide leverage as capital allocation improves.
DraftKings spent aggressively on customer acquisition, but now emphasizes profitability and disciplined promotions. Burry’s "inflecting" language signals a shift from land-grab strategy toward sustainable earnings as the market consolidates.
Bearish on Prediction Markets
Despite backing regulated sportsbooks, Burry is skeptical of prediction markets, platforms such as Kalshi and Polymarket that allow trading on outcomes such as elections and macro data. "I believe that the political climate will not tolerate this," Burry said, per CNBC.
"Prediction markets exist in a loophole adjacent to a heavily regulated and taxed industry. In time, prediction markets will be subsumed into regulation and taxation."
Regulators are moving in that direction. The U.S. Commodity Futures Trading Commission has proposed rules to bring parts of the sector under derivatives oversight. Legal experts also cite concerns around manipulation and insider trading, especially on offshore crypto-native platforms.
DKNG, FLUT Stock Price Activity: 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, according to data from Benzinga Pro.
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Photo: Shutterstock
