Down Over $4B On Flutter, Kenneth Dart Gambles on DraftKings

Billionaire Kenneth Dart has taken a 5.8% stake in DraftKings through his investment group Candle Lake. Dart already owns almost 30% of rival FanDuel’s parent company Flutter. His investment in the Irish-based gambling group is down by over $4 billion, but he is betting that the gambling giants will make a strong recovery.

An SEC filing shows that Dart now owns 28,581,386 shares of DraftKings, representing 5.8% of the company’s overall stock. Under SEC regulations, an initial Schedule 13G must be filed when an investor crosses the 5% ownership threshold in a public company.

Dart Holds $691 Stake In DraftKings

It is unclear when Dart first began buying DraftKings stock. The company’s share price is down over 46% from this point last year as it faces competition from prediction markets.

Losses in its most recent results led to the price dropping further. The stock is now priced at just over $24, putting Dart’s shares at around $691 million.

CEO Jason Robins has been bullish about the company’s opportunity to profit from prediction markets. The company recently launched its Super App, which integrates its prediction market platform.

“Our Super App is now live nationwide, and Predictions is already growing faster than we anticipated,” Robins said. “The similarity of Predictions customer metrics to Sportsbook customer metrics, our advantaged LTV position, and our playbook to innovate on a leading Predictions offering all underpin our confidence that we can win the category this NFL season and beyond.”

Flutter Fall Sees Dart Lose $4.2 Billion

Dart began investing in Flutter in 2021 and crossed the 5% threshold in September last year. He increased his stake to over 15% in January and now holds 28.9% of the company. Just over 18.8% of that is held through actual shares, with the remainder held via financial instruments known as total return swaps (TSRs).

The Irish Independent reported this week that the value of his stake in the company is now down $4.2 billion from his initial investment of $7.62 billion. Flutter’s share price has fallen by over 57% since January.

The company is in a period of transition as it attempts to navigate the evolving landscape of the US gambling industry. FanDuel CEO Amy Howe was replaced in May after the company was disappointed by the platform’s lack of growth.

The company announced further leadership changes when reporting its Q2 results earlier this month. Current CEO Peter Jackson will step aside on October 1. Dan Taylor, chief executive of Flutter’s international division, will lead the company going forward.

Dart has shown no signs of being ready to ditch the stock and has recently continued to add TSRs, which now amount to over 21.7 million notional shares. If his stake in the company exceeds 30%, he will have to make a mandatory offer for the remaining shares.

Although less bullish, Flutter has said it is optimistic about the opportunity presented by prediction markets. “Our priority will be to keep delivering for our colleagues, customers, and shareholders, while building on the momentum we’ve created across the business,” said Taylor. “The opportunities ahead are significant – both those we see in the market today and those we will create ourselves in the future.”

Dart Stake in Evolution Goes Over 30%

Dart has already crossed the 30% threshold with his stake in gaming group Evolution. He now owns 31.56% of the company, triggering a mandatory offer for the remaining shares last week.

Candle Lake made clear that it does not intend to make a full takeover. The offer valued the business at SEK131.7bn ($13.93 billion), significantly short of the market’s current valuation of SEK154.12bn ($16.31 billion).

Evolution’s share price is on the rise, increasing over 44% in the last six months after a drop of almost 40% in the six months prior. Dart began buying up shares of the company in mid-2024 as its price was falling. It appears to have bottomed out in March this year before rising significantly.

The company agreed to pay over $6 million last month to settle a two-year investigation in the UK. The UK Gambling Commission launched a license review in 2024 following a report alleging that the vast majority of Evolution’s business comes from illegal operators.

Last year, it emerged that rival gaming group Playtech was behind the report. Evolution remains locked in a legal battle with legal firm Calcagni & Kanefsky and BlackCube, the Israeli investigative firm that compiled the report. BlackCube claims that the UK investigation should serve as evidence that the information in the report is true.

Born in Michigan, Dart initially acquired his fortune through his family’s foam cup manufacturing business. He then profited by investing in distressed sovereign debt from financially troubled nations, such as Brazil, Greece, and Argentina, at steep discounts. He has also benefited from investments in big tobacco companies before turning his attention to the gambling industry.