Buffett: Prediction markets, sports betting a ‘tax on stupidity’

Warren Buffett, 95, used his first sit-down interview since giving up the Berkshire Hathaway CEO role to group prediction markets, legalized sports betting and retail day trading as state-backed wagering that draws money from less-wealthy participants. In a March 31 interview with Becky Quick, he said revenue from those products “relieves the taxes on me or other rich people” and called them “a tax on stupidity.”

Buffett did not separate event-contract platforms that argue they are financial instruments from state-licensed gambling operations. He described the offerings as variations on the same mechanic: bets that are allowed by state rules and that disproportionately take funds from people with fewer resources.

Industry figures show U.S. sports-betting revenue reached about $16.96 billion in 2025, producing roughly $3.71 billion in taxes. Forty states plus Washington, D.C. now offer some form of legal online sports wagering. Analysts project prediction-market trading volume could rise quickly; one projection puts annual volume near $240 billion by 2026. Recent filings for exchange-traded funds would allow investors to gain retirement-account exposure to event contracts if regulators approve those funds.

Regulators are divided on how to classify event contracts. A federal regulator has moved toward treating some event contracts as derivatives under federal rules. Several state regulators contend some platforms are operating as unlicensed gambling under state law. The classification affects tax treatment, licensing and which agency enforces rules.

Adam Hoffer, director of excise tax policy at the Tax Foundation, noted that betting generally produces negative returns for participants and that lower-income households spend a larger share of income on wagering. “The house always wins,” he added, and higher taxes on bets reduce gamblers’ net returns.

Buffett used similar language at Berkshire’s 2007 annual meeting, when he called gambling “a tax on ignorance.” He stepped down from the CEO role earlier this year and was succeeded by Greg Abel. The comment circulated online after a clip of the interview was shared, prompting renewed attention to how prediction markets are regulated and taxed.