Michael Burry's New Bet: DraftKings and Flutter

Michael Burry, the investor who predicted the US housing crash in 2008, has invested in DraftKings and Flutter Entertainment. Burry believes that regulatory bodies will soon crack down on prediction markets, causing the shares of these companies to rise in value. He has invested 60% in Flutter and 40% in DraftKings. Burry thinks that both companies have attractive business models, but their shares have been undervalued due to the rapid expansion of prediction markets. The US Commodity Futures Trading Commission (CFTC) claims that prediction markets fall under its jurisdiction and is currently engaged in legal battles with several states. Burry believes that prediction markets operate in a regulatory loophole and that this situation will change in the long term. DraftKings shares have fallen by 45% from their 52-week high, while Flutter shares have declined by 65%. Burry notes that DraftKings is undergoing a transformation as an operating business and that Flutter is a good operating business that has been hurt by poor capital allocation in the past. Both companies are exploring their own prediction market offerings, which could allow them to benefit regardless of how the regulatory landscape evolves.

The future of prediction markets and their regulation is of great interest to investors and businesses. The decisions made by regulatory bodies can affect investment decisions in prediction markets. Investors are closely following developments related to prediction markets and their regulation.

The Future of Prediction Market Regulation