Investor Michael Burry warns about prediction markets and backs sportsbook stocks

Investor Michael Burry, famed for profiting from the 2008 housing crash, said prediction‑market platforms are essentially gambling, operating through a regulatory loophole. He wrote on X that "prediction markets are 'gambling no matter what anyone calls it'" and warned that "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."

Burry’s comments came after a New York federal judge rejected Kalshi’s request to block state gambling regulators, underscoring ongoing legal disputes over whether such contracts fall under the Commodity Futures Trading Commission or state gambling law.

Separately, Burry disclosed that his hedge fund has bought shares in the two largest U.S. online sportsbook operators – DraftKings (DKNG) and Flutter Entertainment (FLUT) – at roughly $26 and $107 per share respectively, allocating about 40 % to DraftKings and 60 % to Flutter. He sees upside in these beaten‑down stocks, believing future regulation of prediction markets could boost sportsbook revenues.