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Gaming Edge’s TL;DR
- Short sellers have made at least $2.3 billion this year by betting against major online gambling operators.
- This pressure has been driven by the rapid rise of prediction markets in the US and steep tax increases in the United Kingdom.
Hedge fund short sellers have accumulated estimated paper profits of at least $2.3 billion in 2026 by positioning against major online gambling companies, according to data provider S3 Partners.
Key figures include:
- Flutter: Roughly $2 billion in paper gains; shares are down more than 50% so far in 2026
- DraftKings: About $351 million in estimated paper profits for short sellers
- Entain: About $35 million in estimated paper profits
Some of these gains have been realized as funds closed short positions. The sector-wide pressure is linked in reports to the growing popularity of prediction markets in the US. Flutter is Dublin-headquartered and dual-listed in London and New York, amplifying the move’s visibility across markets.
Impact on bettors
The result of the short selling can have indirect effects on bettors, including:
- Lower operator valuations can constrain capital for marketing, promotions, and product investment, which may affect offers available to US players.
- Market volatility can slow expansion plans or deal activity that would bring new betting options to US states.
- Investor pressure may lead operators to prioritize cost control and balance-sheet stability over aggressive growth, with potential downstream effects on product rollout and customer incentives.
Expect investors and operators to watch several signals closely. The include: quarterly results, any further rise in US prediction markets, and policy or tax changes in key jurisdictions.
Continued share-price pressure could prompt more closed positions and realized gains for shorts, while operators may respond with cost cuts, strategic pivots, or renewed focus on US revenue streams.
For bettors, the trend underscores how regulatory shifts and market innovation – not just player behavior – can shape the competitive landscape and the offers they see.
Based on reporting by CDC Gaming via The Irish Times.
