Published on: February 25, 2026, at 12:41h.

Updated on: February 25, 2026, at 12:41h.

• The Fidelity Select Leisure Portfolio manager has a positive outlook on the US sports betting market.
• The mutual fund includes investments in DraftKings and Flutter Entertainment.
• The portfolio manager argues that fears surrounding prediction markets are a “simplistic” interpretation.

Despite ongoing challenges, the downturn in sports betting stocks is often linked to the emergence of prediction markets. However, some seasoned investors believe these alternative wagering platforms won’t displace existing sportsbook operators in the near future.

Peter Belisle, the Fidelity Portfolio Manager overseeing the Fidelity Select Leisure Portfolio (FDLSX), is optimistic about the future of the US sports betting sector, suggesting that investors who reacted negatively to predictions regarding market disruptions missed important insights.

“This viewpoint is overly simplistic and fails to recognize the complexity differences between prediction markets and online sportsbooks,” he remarked in a recent communication. “As we move into 2026 and beyond, it will become apparent that prediction markets are unlikely to replace sportsbooks, and potential legal issues could arise — all of which may contribute to reversing this negative sentiment.”

According to Morningstar data, the Fidelity Select Leisure Portfolio has owned shares in DraftKings (NASDAQ: DKNG) since October 2022 and in FanDuel’s parent company, Flutter Entertainment (NYSE: FLUT), since November 2021. The mutual fund also began a position in a sports betting data company last July, marking the only sports betting stocks in the $591.7 million portfolio.

Belisle Sees Duopoly Advantage for DraftKings, FanDuel

It is commonly recognized that DraftKings and FanDuel dominate the online sports betting landscape, holding the top two positions by market share in nearly every state where they operate.

“Current players lacking a solid foothold (such as Penn Entertainment) are under significant pressure to achieve profitability, while some have already retreated from competition (like Wynn Resorts),” observes Belisle. “As a result, we can likely expect reduced marketing expenditures and enhanced profitability among established players moving forward.”

As of January 31, Wynn Resorts (NASDAQ: WYNN) was a prominent holding in Belisle’s portfolio, being the sole gaming name included.

Belisle Remains Optimistic About US Sports Betting

While DraftKings and Flutter shares face ongoing challenges, emerging sentiment suggests these stocks may have been excessively penalized, making them appealing for patient, risk-aware investors.

Belisle maintains a positive outlook for the US sports wagering industry’s long-term prospects, noting that by the end of the previous year, half of the adult population in the United States had access to sports betting, albeit with low participation rates that suggest significant growth potential.

“Currently, online sports wagering operates as a ‘winner-takes-most’ market, dominated by a handful of players,” Belisle concludes. “We are still far from exhibiting mature, long-term duopoly economics, indicating that the stocks are considerably undervalued based on true long-term economic projections.”