Michael Burry of “The Big Short” fame said he bought shares of regulated sports-betting operators DraftKings and Flutter Entertainment, anticipating regulators will eventually crack down on prediction markets after competition from the upstarts pressured the stocks.

Burry said Wednesday he purchased a full-sized position split roughly 60% in Flutter and 40% in DraftKings, buying Flutter at about $107 a share and DraftKings in the low-$26 range. He said he could eventually increase each holding into a full standalone position.

The investor, who rose to prominence for predicting the U.S. housing crash in 2008, said both companies are attractive businesses whose shares have been weighed down by the rapid expansion of prediction markets.

Those platforms have increasingly offered event-based contracts, which the U.S. Commodity Futures Trading Commission asserts is under its jurisdiction. The federal agency is currently engaged in legal action against multiple states in a battle over who can regulate prediction markets. The contracts have also managed to sidestep state gaming taxes.

“I believe that the political climate will not tolerate this,” Burry said in a Substack post Wednesday. “Prediction markets exist in a loophole adjacent to a heavily regulated and taxed industry. In time, prediction markets will be subsumed into regulation and taxation.”

Shares of DraftKings have fallen about 45% from their 52-week high reached last September, while Flutter has slid 65% from its August peak.

“DraftKings is inflecting as an operating business and the value is in the transition I foresee in the near future,” he wrote. “Flutter has been hurt by capital misallocation in the past, but is a fundamentally very good operating business with terrific scale.”

Both companies have also begun exploring their own prediction-market offerings, potentially positioning themselves to benefit regardless of how the regulatory landscape evolves, Burry noted.