Warren Buffett Warns That Prediction Markets Are 'Gambling,' Not Investing

In a surprise interview during Berkshire Hathaway's annual shareholder meeting over the weekend, billionaire investor Warren Buffett expressed a dim view of prediction markets, comparing them to a casino.

"If you're buying one-day options or selling them, I mean, that's not investing, it's not speculating — it's gambling," Buffett told CNBC on Saturday.

Prediction markets are platforms where traders can bet on real-life events. Companies like Polymarket (which reportedly has over 2.3 million accounts) and Kalshi (5 million) have exploded in popularity in recent months despite warnings from experts about their many risks.

Now, the Oracle of Omaha is joining the chorus.

"We've never had people in a more gambling mood than now," he added. "The casino has gotten very attractive."

Buffett also noted that the short-term nature and high volatility of prediction markets makes them attractive for cheaters, referencing the recent news that a special-forces soldier was charged with insider trading for using secret military information about the Trump administration's clandestine ouster of Venezuelan President Nicolás Maduro to place bets on prediction markets.

Comparing them to a "a church with a casino attached," Buffett expressed disdain for short-term options trading and prediction markets: a position that likely stems from his long-held and oft-quoted advice to only invest in what you understand.

"Nobody can explain why they're buying an option for one day," he said.

Buffett, who stepped down as CEO of Berkshire Hathaway last year, grew the conglomerate into a $1 trillion business during his 60 years at the helm by embracing a long-term, buy-and-hold investment strategy.

Buffett's successor, Greg Abel, echoed this sentiment at Saturday's meeting when he answered a shareholder question about how young investors should balance patience with action.

"We very much have to understand what we're investing in," he said. "Do we understand this business? Do we understand the opportunity and, more importantly, do we understand the risk?"