‘Big Short’ Investor Burry Betting on DraftKings, Flutter

Michael Burry is betting on sports wagering equities, revealing today that he’s initiated long positions in DraftKings (NASDAQ : DKNG) and FanDuel owner Flutter Entertainment (NYSE: FLUT).

Burry, a widely followed investor who previously ran Scion Asset Management, 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.

News of Burry’ fresh DraftKings stake, which he says he initiated in the low $26 range, comes as some other big-name investors, namely Cathie Wood, have dialed back exposure to the sports betting stock.

With DraftKings, Flutter, Burry Mindful of Prediction Markets

Shares of Flutter and DraftKings are off 61.2% and 36.3%, respectively, over the past year with much of the blame for those declines laid at the doorstep of prediction markets such as Kalshi and Polymarket. Specific to Flutter, there have been other missteps that resulted in the surprise May departure of former CEO Amy Howe and June news of several hundred layoffs.

Data confirm volume on yes/no exchanges is exploding with much of that turnover driven by traders’ affinity for sports derivatives. However, Burry believes prediction markets are operating in a “loophole economy,” capitalizing on loose regulatory framework that will eventually be tightened.

Through FanDuel Predicts and DraftKings Predictions, those gaming companies are on the rise in the prediction market space, but if an earnest regulatory crackdown materializes in the future, those operators can simply lean into their enviable perches in the iGaming and online sports betting segments, implying they’re less vulnerable to prediction markets regulation than companies like Kalshi are.

Burry Has Lengthy Gaming Investing Track Record

DraftKings and Flutter are not Burry’s first flirtations with gaming equities. Far from it, in fact. Burry, who was portrayed by Christian Bale in the 2015 movie “The Big Short,” held stakes in Las Vegas Sands (NYSE: LVS) and Wynn Resorts in 2020 — gutsy plays considering the state of casino equities during the early days of the coronavirus pandemic.

In 2023, Burry’s hedge fund had an investment in MGM Resorts International (NYSE: MGM). At one point, that stock represented more than 7% of the Scion portfolio.

Earlier this year, Burry pitched MGM and Wynn as “Plan B” acquisition targets for GameStop (NYSE: GME), a company in which he’s a major shareholder. The video game retailer has since floated a takeover offer for eBay (NASDAQ: EBAY).