Michael Burry bets on sports betting stocks amid regulation fears

Michael Burry bought shares of Flutter Entertainment and DraftKings in a wager that the bigger threat to sports betting stocks may be Washington, not Wall Street. He said he paid about $107 a share for Flutter and bought DraftKings in the low $26s, building a full-sized position weighted roughly 60-40 toward Flutter as both stocks had already been beaten down.

Burry’s case turns on a regulatory gap. Prediction markets can offer event contracts nationwide under Commodity Futures Trading Commission oversight, while traditional sportsbook operators must navigate state gaming taxes and licensing rules. That difference has made Kalshi, Polymarket and similar markets a direct challenge to the FanDuel and DraftKings model, especially if customers can trade on sporting outcomes without the same tax burden that hits licensed bookmakers.

Burry wrote on his website, “the political climate will not tolerate this.” For sportsbooks, the issue is not only competition for customer dollars but also market share in a business where a looser federal path could divert betting activity away from state-regulated books and the tax revenue they generate.

On June 10, the CFTC published a notice of proposed rulemaking on event-contract derivatives, seeking comment on changes to Rule 40.11 and on which contracts may be barred as contrary to the public interest. Three weeks earlier, Sens. Adam Schiff and John Curtis introduced the Prediction Markets Are Gambling Act, a bipartisan bill that would block CFTC-registered entities from listing contracts that resemble sports bets or casino-style games.

On June 23, the CFTC sued Kentucky after the state moved against Kalshi and Polymarket, making Kentucky the first Republican-led state drawn into that dispute. On July 8, a federal judge in New York denied Kalshi’s bid to block state gambling enforcement.

Burry’s move also landed as Flutter shares were down 50% for the year and DraftKings was down 21%, levels that could magnify any rebound if regulators narrow the prediction-market opening. He also added to JD.com at $27.58 and called it one of his top three holdings.