Billionaire investor Kenneth Dart is facing a potential $4.2 billion loss on his Flutter Entertainment stake, but he is still building a significant position in DraftKings, Flutter’s primary competitor in the U.S.
A recent DraftKings Form 13G filing with the SEC shows that Dart’s investment firm, Candle Lake Ltd., holds 28.58 million shares of DraftKings, representing 5.8% of the total shares outstanding.
The news of Dart’s investment in DraftKings comes as reports indicate he is facing a $4.27 billion loss on his Flutter investment. Dart holds a significant portion of Flutter’s parent company FanDuel through swaps and derivatives.
A Form 4 filing with the SEC reveals that some of Dart’s exposure to Flutter has been extended to 2028, suggesting his long-term commitment to the company and belief in its potential for recovery after a steep decline in value over the past year.
Dart’s Passive Approach to DraftKings
Large institutional investors are required to file Schedule 13Gs when their ownership stake in a public company reaches or exceeds 5%. While typically used by passive investors, these filings can be converted to Form 13Fs if the investor plans to take an activist role.
Despite his substantial investments, Dart is not known to be an activist investor. This is significant in the case of DraftKings, as the company’s ownership structure makes it challenging for activists to exert influence.
DraftKings’ CEO controls over 90% of the company’s Class B shares, which carry greater voting power compared to the Class A shares that Dart owns. This limits Dart’s ability to influence decision-making within the company.
Interestingly, Dart is among the notable investors, including Michael Burry, who hold stakes in both DraftKings and Flutter. Burry disclosed his investments in these gaming companies last month.
Dart’s Interest in Gaming Stocks
Dart has a history of investing in vice stocks, having previously held significant positions in tobacco companies before transitioning to gaming equities.
Last week, Candle Lake made a $13.8 billion acquisition bid for Sweden’s Evolution AB, triggered by the firm exceeding a 30% ownership threshold in the company. Dart clarified that he does not intend to acquire Evolution outright and plans to remain a long-term investor in the gaming entity.
In addition to DraftKings, Dart also holds a 0.6% stake in Hacksaw AB, a Swedish content provider for iGaming operators.