Warren Buffett Calls Sports Betting a ‘Tax on Stupidity’

Warren Buffett, the billionaire investor who built multinational conglomerate Berkshire Hathaway, sees sports betting as a backdoor tax that ultimately benefits wealthy Americans like himself.

Currently, 40 U.S. states and Washington, D.C., offer some form of legalized online sports betting, generating more than $2.89 billion in tax revenue in 2025 alone, according to the Tax Foundation, a nonpartisan tax policy think tank. Those revenues ultimately come from sportsbooks’ net winnings after payouts to winning bettors.

“It’s a tax on stupidity,” Buffett said during an interview with CNBC. He added that “rich people love it, because they don’t have to pay.”

Buffett, 95, who stepped down as CEO of Berkshire Hathaway in December, has a net worth of over $140 billion, making him the 12th richest person in the world, according to Forbes.

“To the extent that states raise money from people who—the dollar really means something to them—it actually relieves the taxes on me or other rich people,” Buffett said. “It’s not direct, but it’s the net effect.”

Even though the system is working in his favor, he’s not in favor of the system. “I don’t like things that make a sucker out of people,” Buffett said.

“I don’t think the function of the government is to play its people for suckers,” he told CNBC.

Adam Hoffer, director of excise tax policy at the Tax Foundation, tells Front Office Sports he gets where Buffett is coming from.

“Gambling, in general, is a losing proposition,” Hoffer says. “The house always wins. Piling on taxes only makes the return on investment even worse for gamblers.”

According to Hoffer, it’s no secret that wealthier people spend less of their income on gambling activities than lower-income households, and “governments know this.” However, Hoffer says the bottom line is that “people want to gamble.”

People do indeed want to gamble. U.S. sports betting revenue rose to $16.96 billion in 2025, a nearly 23% increase from the year before, according to the American Gaming Association. Overall handle—the total amount of money bet on sports in the country—was up 11% at $166.94 billion. State-regulated sportsbooks generated $3.71 billion in taxes last year, up 32.4% from 2024.