Warren Buffett used his first sit-down interview since stepping down as Berkshire Hathaway CEO to bundle prediction markets, legalized sports betting, and day trading into a single critique, calling state-sponsored gambling a “tax on stupidity” that quietly subsidizes wealthy Americans. The take is now receiving renewed attention on social media, having been originally overlooked by mainstream press.
Key Takeaways
- Buffett groups prediction markets with sports betting in a CNBC interview.
- He argues state gambling revenue “relieves the taxes on me or other rich people.”
- Bernstein projects prediction market volume will hit $240 billion in 2026.
The Interview: No Distinction
The 95-year-old investor sat with CNBC’s Becky Quick on March 31 in his first major interview since handing the CEO role to Greg Abel. When Quick asked whether he disapproved of “prediction markets, of legalized sports gambling, even of day trading,” Buffett did not separate the categories. “To the extent that the states raise money from people who [think] the dollar really means something to them, actually relieves the taxes on me or other rich people. I mean, it’s not direct, but it’s the net effect.” Pressed on whether that matched the old line that the lottery is a tax on the stupid, Buffett agreed: “It’s a tax on stupidity.”
The position is familiar—he used nearly identical language at Berkshire’s 2007 annual meeting. What is new is the explicit mention of prediction markets, which have spent the past 18 months arguing they are not gambling. Buffett accepted the framing without modification.
Media Blind Spot and Commercial Ties
Mainstream coverage on March 31 focused on Buffett’s investment views, Apple, and retirement. The sports-betting angle resurfaced after The Growth Podcast host Aakash Gupta pulled the gambling clip and laid out the math: nine US states have no state income tax, seven of those nine run state lotteries, and seven of those nine have legalized sports betting. Front Office Sports picked up the angle on April 27, but none flagged the prediction-markets bundling.
Notably, CNBC has its own commercial relationship with Kalshi, a minority stake disclosed in April 14 coverage but not in the Buffett transcript. The CFTC under the Trump administration has moved toward operators’ position, while state regulators in Arizona, New Jersey, Romania and others continue to argue platforms run unlicensed gambling.
Economic Reality
Adam Hoffer, director of excise tax policy at the Tax Foundation, agreed with Buffett's logic. “Gambling, in general, is a losing proposition. The house always wins. Piling on taxes only makes the return on investment even worse for gamblers.” Wealthier Americans spend a smaller share of income on gambling than lower-income households, a pattern Hoffer says “governments know.”
US sports-betting revenue alone hit $16.96 billion in 2025, up nearly 23% year-over-year. State-regulated sportsbooks generated $3.71 billion in taxes, up 32.4%. Forty US states plus D.C. now offer online sports betting.
What’s Next
Prediction-market advocates argue the regulatory framework is fundamentally different—federally regulated derivatives. But Buffett’s interview places them squarely on the wrong side of his sucker-game test. New ETF filings would let retail investors buy event-contract exposure inside retirement accounts, pushing products further into mainstream finance. Meanwhile, Kalshi faces potential legal actions over its Iran regime change market. The state-versus-CFTC fight continues, and Buffett’s voice, though retired, remains influential.