DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT) shares surged Wednesday after investor Michael Burry publicly disclosed new stakes in both companies.
Burry, widely known for his prescient bet against the U.S. housing market, revealed the positions through his Cassandra Unchained Substack newsletter.
The announcement sent both stocks climbing to session highs before DraftKings settled at a gain of roughly 0.5% and Flutter at approximately 1%.
Burry framed the investments not as speculative wagers on sports outcomes but as a calculated thesis on business maturation within the online gambling sector.
He offered pointed assessments of both companies, highlighting what he sees as underappreciated operational momentum and structural value in each.
“DraftKings is inflecting as an operating business and the value is in the transition I foresee in the near future. Flutter has been hurt by capital misallocation in the past, but is a fundamentally very good operating business with terrific scale.”
A significant portion of Burry’s note addressed the growing anxiety among traditional sportsbook investors over the rise of prediction markets for political and alternative events.
Many in the industry fear these newer platforms could draw users away from established sportsbooks, eating into the market share of companies like DraftKings and Flutter.
Burry pushed back firmly on that concern, describing prediction markets as operating in a legally precarious position unlikely to survive regulatory scrutiny.
“Prediction markets exist in a loophole adjacent to a heavily regulated and taxed industry,” Burry warned, adding that “in time, prediction markets will be subsumed into regulation and taxation.”
His broader argument is that once prediction markets face the same compliance burdens and tax rates as licensed sportsbooks, any perceived competitive advantage they currently hold will effectively disappear.
Burry appears to be betting that regulatory normalisation will ultimately consolidate the online betting landscape around the established, well-capitalised players he has now backed.
The disclosure also revealed that Burry has added to his existing position in Chinese e-commerce company JD.com (NASDAQ: JD), suggesting he retains conviction in select Asian technology and retail exposure.
The combination of moves paints a picture of an investor seeking businesses with durable operational foundations that he believes the market is currently mispricing.
