Popular US investor Michael Burry is placing his bets on the gambling industry in anticipation of a downturn in fortunes for the prediction markets space.

Burry, who rose to prominence after heavily profiting from the 2008 US housing crash, told readers of his Substack on Wednesday that he had acquired positions in US gambling giants Flutter Entertainment and DraftKings. 

Burry sound reasoning

Like many, he is of the belief that prediction markets will not be allowed to continue in their current state and may be subject to more stringent regulations in the future. 

Even if they aren’t, both operators which he has invested in now have prediction market propositions of their own – Flutter with FanDuel Predicts and DraftKings with DraftKings Predictions. 

The two offer differing markets to those on their traditional sportsbook platforms – giving users the chance to place “event contracts” on events like crypto prices and the S&P 500.

However, they do not offer geopolitical markets which have been a contentious subject for operators such as Polymarket. 

There has been talks that these two renowned gambling conglomerates have missed the proverbial boat when it comes to predictions as both launched their propositions in December 2025 – some time after companies like Polymarket and Kalshi had risen to prominence. 

Both have also suffered a share price collapse in the last 12 months – Flutter’s stock has dropped by 60% to £82.86, while DraftKings, now trading at $27.17, has had over 36% of its share price shaved off in that period. 

But Burry, who was played by Christian Bale in the 2015 film “The Big Short”, clearly now sees the two businesses as undervalued. 

He stated on his Substack yesterday that he had bought a full-sized position split 60% in Flutter and 40% in DraftKings, buying in at $107 and around $26 respectively. 

He told his audience: “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.”

On prediction markets, he continued: “I believe that the political climate will not tolerate this. 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.”

It is not just Burry who is a believer in Flutter. Candle Lake owner and Cayman Islands-based billionaire Kenneth Dart has been gradually increasing his control of the business, which has a $19.3bn market cap, now controlling almost 29% of it.

With Q2 2026 results for the companies set to be revealed next month, Burry may see some immediate gains, depending on the revenue boosts that Flutter and DraftKings experienced during the beginning of the 2026 World Cup. 

The event is one that has been touted to break records for gambling operators worldwide and with it being hosted across North America, it is sure to have had some form of material impact on its two biggest players in the market, though there have been some ‘punter-friendly results’, according to operators. 

Burry in on Flutter and DraftKings amid Kalshi’s New York troubles

The ball for stricter regulation on prediction markets is already rolling. Yesterday, it was also revealed that a federal judge denied Kalshi’s bid to block New ‌York from enforcing its gambling laws against it. 

It seems Burry may have gotten in on Flutter and DraftKings at the perfect time given this heavy loss for the prediction markets space.

Prediction markets are currently regulated by the Commodity Futures Trading Commission (CFTC) and have garnered mass dispute in the US and across the world, as they refuse to refer to themselves as traditional gambling operators. 

By May, regulators in 16 states were embroiled in legal action against these companies, arguing that they are unlicensed gambling operators. 

Many have stated that some form of heavier regulation is bound to be enforced on them. Burry is clearly of this opinion, and he is now putting his money where his mouth is.