Down $4.2B on Flutter, Kenneth Dart Takes Stake in DraftKings

Billionaire investor Kenneth Dart is reportedly staring at a $4.2 billion paper loss on his stake in Flutter Entertainment (NYSE: FLUT), but that’s not stopping him from amassing a sizable stake in DraftKings (NASDAQ: DKNG), Flutter’s primary rival in the U.S.

A recent DraftKings Form 13G filing with the Securities and Exchange Commission (SEC) indicates Dart’s investment vehicle known as Candle Lake Ltd. owns 28.58 million DraftKings shares, or 5.8% of the shares outstanding.

The revelation of Dart’s DraftKings stake arrives amid reports that he’s contending with a $4.27 billion paper loss on his Flutter investment. The enigmatic billionaire controls roughly 30% of FanDuel parent Flutter through swaps and derivatives.

A Form 4 filing with the SEC indicates that some of Dart’s swap exposure on Flutter has been rolled into 2028. That may be a sign the investor intends to stick with Flutter over the long term and is confident the stock can rebound after shedding two-thirds of its value over the past year.

Dart Likely Not Angling for Activism at DraftKings

Schedule 13Gs are the regulatory documents required of large institutional investors when their stakes in a public company reach or exceed 5%. Those filings are typically used by passive investors, but those documents can be converted to Form 13Fs should the investor decide to take an activist role.

While Dart typically takes large stakes in the companies in which he invests, he’s not known as an activist investor. Specific to DraftKings, that’s pertinent because the sportsbook giant makes for a difficult target for activists.

DraftKings co-founder and CEO Jason Robins controls more than 90% of the company’s Class B shares, which carry 10 votes per share. Dart’s stake in the company, though sizable, is through the commonly traded Class A shares, which afford investors just one vote per share.

As an interesting footnote, Dart joins “Big Short” investor Michael Burry among the well-known market participants that own stakes in both DraftKings and Flutter. Burry revealed stakes in the gaming companies last month.

Dart Loves Gaming Stocks

Dart is no stranger to the world of vice stocks. He’s previously held large stakes in major tobacco companies, later transitioning to gaming equities.

Last week, Candle Lake made a $13.8 billion acquisition offer for Sweden’s Evolution AB, but that offer was triggered by the investment vehicle exceeding 30% ownership in the gaming company. Dart made clear he doesn’t want to own Evolution outright and that he will remain a long-term investor in the betting entity.

Dart also owns 0.6% of the shares of Hacksaw AB, a Swedish provider and distributor of content used by iGaming operators.