Flutter Entertainment and DraftKings have seen notable share price gains following a blog post from renowned investor Michael Burry expressing confidence in both companies.
Burry, made famous by his portrayal in The Big Short, disclosed a substantial portfolio weighted 60% toward Flutter and the remainder toward DraftKings in his recent post.
He has argued that prediction markets are exploiting a “loophole economy” that will not survive the regulatory wave he believes is coming.
Flutter has climbed 2.74% on the New York Stock Exchange since Burry published his blog, while DraftKings has risen just under 1% since 8 July.
Some observers have attributed the movement to the well-worn “Burry effect,” but both stocks had already been performing strongly throughout the week before his post landed.
The gains are not entirely disconnected from Burry’s thesis, given his belief that regulatory restrictions will eventually squeeze prediction markets and hand relief to mainstream gambling operators like Flutter and DraftKings.
The recent upward momentum has also coincided with a string of significant legal and regulatory defeats for prediction market giant Kalshi across multiple US states.
On 1 July, Kalshi was ordered to stop offering sports contracts in Michigan, and the following day it failed in its bid to defy geofencing demands from Nevada regulators.
This week brought the heaviest blow yet, as Kalshi was denied an injunction in New York that would have protected its federally regulated status against state gambling enforcement.
The presiding judge found that while the Commodity Exchange Act grants the Commodity Futures Trading Commission authority over swaps and designated contract markets, it does not strip New York of its power to regulate gambling.
Since those regulatory setbacks began on 1 July, Flutter has climbed 6.78% on the NYSE and DraftKings has risen by a comparable 7.54% over the same period.
Despite these legal troubles, Kalshi recorded a record-obliterating $33bn in trading volume during June, demonstrating the contradictory pattern of regulatory hardship alongside explosive commercial growth that defines the sector.
A Macquarie note pointed to “unprecedented momentum” across the entire prediction markets vertical during June, with the FIFA World Cup driving substantial activity throughout the month.
Burry carries enormous weight among investors thanks largely to Christian Bale’s portrayal of him in The Big Short and his real-world decision to short the housing market before the 2008 financial crash.
That trade earned him a personal profit of $100m and cemented his reputation as one of the most closely watched contrarian voices in global finance.
In recent years he has held short positions in Nvidia and Palantir, making his long positions in Flutter and DraftKings a notable signal for the broader gambling investment community.
Looking at both companies over the past year, the rise of prediction markets has contributed to share price declines of roughly 61% for Flutter and 37% for DraftKings, making Burry’s conviction particularly striking.
Burry described Flutter as a “fundamentally very good operating business with terrific scale,” while of DraftKings he said: “DraftKings is inflecting as an operating business and the value is in the transition I foresee in the near future.”
