Prediction market operators appear to hold all the high cards in their battle with sportsbook operators.
They have powerful allies like US President Donald Trump and Commodity Futures Trading Commission Chairman Michael Selig. And lawyers say the regulator has the legal edge in its standoff with states. But some think sportsbooks are eyeing a hidden card that’s yet to come into play.
Last week, Michael Burry, the superstar investor who inspired the movie “The Big Short,” backed the sportsbooks to emerge victorious – and announced personal investments in Flutter Entertainment and DraftKings.
“It seems to me that Burry isn’t making a sports call,” Robert Kraft, the Founder & CEO of the sports betting platform Atlas World Sports, told CasinoBeats. “He’s making a regulatory-arbitrage call.”
Burry justified his decision to back DraftKings and Flutter by claiming that “in time, prediction markets will be subsumed into regulation and taxation.”
Breaking: Michael Burry has opened a bullish position in DraftKings $DKNG
He opened the position in the low $26 range pic.twitter.com/iPnmg4h9L8
— Michael Burry Stock Tracker
(@burrytracker) July 8, 2026
Michael Burry Flutter, DraftKings Bet: ‘The Dollars are Big Enough’
Kraft noted that prediction markets currently offer sports outcomes nationwide under a federal commodities framework.
Meanwhile, sportsbooks “pay state gaming taxes that can run as high as 51% and incur licensing and compliance costs in every jurisdiction where they operate,” he said.
“That gap is more of a subsidy loophole […] than a moat,” the Atlas World Sports CEO said. “Subsidies built on loopholes have a way of getting closed once the dollars get big enough for politicians to notice. The dollars are officially big enough.”
“Big” is certainly the name of the game when it comes to prediction market operators’ financial performance in recent years.
Experts say total trading volumes could reach the $240 billion mark by the end of 2026, rising 370% on last year’s figures.
As the World Cup continues, monthly volumes have surged past $50 million.
“Every licensed operator, every state treasury, and every tribal nation with a gaming compact has a direct revenue interest in leveling the playing field,” said Kraft.
“Smart people are disagreeing on timing much more than on whether the prediction market space will change or close completely,” he said.
Patience: A Virtue for Long-Term Investors?
Investors like Burry appear to be playing the long game on sportsbook stocks, the experts say.
“Washington moves more slowly than a market growing this fast, so the loophole may stay open longer than the incumbents would like,” Kraft explained. “Burry’s edge, if he has one, is patience.”
Industry insiders believe that sportsbooks are not looking to wipe prediction markets off the map. Instead, their plan may be to develop superior business models based on lessons learned from the success of prediction market operators.
Why Customers Pick the Prediction Market Model
Consumers are drawn to prediction market platforms due to their price sensitivity and peer-to-peer models, Matt Bresler, co-founder and CEO of Odditt, a sports betting data and analytics firm, told CasinoBeats.
“FanDuel and DraftKings have both launched prediction markets of their own, so Burry’s bet isn’t just that regulation catches up,” said Bresler. “It’s that the companies that have done sports the best for more than a decade, across sports betting, daily fantasy, and now prediction markets, are positioned to benefit and stay on top”.
Kraft concurred. “The smart customer does not care what the regulatory wrapper is called. They want the best price on the game,” he said.
“The winners of the next five years will be whoever helps the customer find it,” concluded Kraft. “The operators know it too. It’s exactly why the books are building their own prediction products. Everybody’s hedging toward the same future.”
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Prediction market operators appear to hold all the high cards in their battle with sportsbook operators. They have powerful allies like US President Donald Trump and Commodity Futures Trading Commission Chairman Michael Selig. And lawyers say the regulator has the legal edge in its standoff with states. But some think sportsbooks are eyeing a hidden
The post Michael Burry’s Flutter, DraftKings Stocks Bet Has Nothing to Do With Sports, Say Experts appeared first on CasinoBeats.