Michael Burry bets on sportsbooks DraftKings and Flutter, sees prediction markets curbed by regulation

Michael Burry, known for his prescient market calls, has revealed new bullish positions in two major players within the online sports betting industry: DraftKings (DKNG) and Flutter Entertainment (FLUT). Scion Asset Management's latest 13F filing indicates a significant bet on the continued expansion and regulatory stability of regulated sportsbooks.

Simultaneously, Burry articulated a skeptical view on prediction markets, suggesting that their unregulated nature makes them vulnerable to future legislative crackdowns. This dual stance implies a strategic view that regulatory clarity will favor established, compliant operators like DraftKings and Flutter over less regulated, nascent prediction market platforms.

The thesis centers on a "flight to quality" within the broader betting landscape, where capital will flow into companies operating within clear legal frameworks. DraftKings, with projected revenue growth of 27.0% YoY to $6.1B by FY2025, and Flutter, with 16.6% YoY growth to $16.4B, are positioned to benefit from this dynamic. Both companies, however, still report negative diluted EPS, indicating that profitability remains a key focus for future performance.

This development sets up a tension between the growth potential of regulated sports betting and the perceived regulatory overhang on prediction markets. The Angle explores whether Burry's bet on the sportsbooks is well-timed, given their current revenue trajectories and the potential for a regulatory tailwind.