“The betting numbers have continued to be strong in the US, stronger than we thought they’d be,” he told the Financial Times. Chanos, wisely I would say, took in that information and decided to take a short position against DraftKings.Īlas, here he is explaining to FT why he has now exited that short position:

The very nature of sports betting, which requires books to offer competitive odds in order to attract bettors on both sides of the line, usually caps the sports books' hold-the amount of money they keep for themselves after paying out winnings and collecting losses-at around five percent. He looked at online book makers like DraftKings and FanDuel and saw companies not only spending billions of dollars on marketing, but losing money every quarter in an effort to capture a market with relatively small margins.

Put simply, his perspective changed because he previously underestimated how easy it is to rinse American bettors.Ĭhanos's initial skepticism over the viability of American sports books was solidly founded. There's a funny little story in the Financial Times this week, in which a well-known hedge fund manager named Jim Chanos explains why he's suddenly become bullish on the American sports gambling industry, which he'd previously taken an aggressive short position against.

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