Michael Burry has abandoned one half of his sports betting trade and doubled down on the other. The investor known for predicting the 2008 housing crash sold his entire DraftKings position before the company’s second-quarter report, while more than doubling his investment in Flutter Entertainment following a sharp post-earnings selloff.
Burry bought the additional Flutter shares at an average price in the high $90s, after the FanDuel owner closed 11% lower on Aug. 5. He called the decline a rare buying opportunity, which is quite a statement about a quarterly report that gave investors plenty to dislike: weaker US sportsbook revenue, another reduction to full-year guidance, and the departure of longtime CEO Peter Jackson.
Flutter reported a $296 million net loss for the second quarter, compared with a $37 million profit during the same period last year. Total revenue still increased 3% to $4.33 billion, but US revenue fell 6%, sportsbook revenue dropped 15%, and adjusted EBITDA from the division declined 70% to $119 million. Increased promotional spending, higher taxes, acquisition financing, and further investment in FanDuel all weighed on the result.
The company also reduced its full-year adjusted EBITDA forecast from $2.87 billion to roughly $2.65 billion, marking its fourth consecutive guidance cut. Dan Taylor, who currently runs Flutter’s international operations, will replace Jackson as group CEO on Oct. 1. Taylor had already been handed responsibility for the struggling US business during an earlier management reshuffle, so the promotion completes a transition that was arguably underway.
Burry first disclosed positions in both Flutter and DraftKings in July. At the time, he had built one full-sized holding divided roughly 60% toward Flutter and 40% toward DraftKings, buying Flutter at about $107 per share and DraftKings in the low $26 range. His argument then was that both companies had been punished far too severely for the threat posed by prediction markets.
His decision to sell DraftKings before its own quarterly results suggests he no longer wanted equal exposure to that risk. Burry argued that Flutter’s weak US performance could point to similar pressure at its closest listed rival, while Flutter’s much larger international business gave it more protection if conditions in American sports betting continued to deteriorate. The trade, in other words, is no longer a blanket endorsement of conventional sportsbooks. It’s a preference for the operator he believes can better survive the current disruption.
Prediction markets remain central to the whole thesis. Platforms such as Kalshi and Polymarket can offer sports-related event contracts across the United States under federal commodities oversight, while conventional sportsbooks operate state by state and pay gaming taxes in every regulated jurisdiction. Burry expects that advantage to narrow as political pressure forces prediction platforms to accept rules and taxes closer to those imposed on ordinary bookmakers.
That leaves his Flutter purchase as a regulatory bet as much as a valuation play. Burry is buying after a poor quarter, a leadership change, and a fourth guidance cut, because he believes the market is treating prediction markets as a permanent structural winner when they may be nothing of the sort. Selling DraftKings, though, shows he is not equally confident in every company waiting around for that assumption to fail.