Buffett and Kalshi: Two views of America's gambling boom

The Oracle of Omaha is concerned that America has a gambling problem.

Why it matters: Warren Buffett recently retired from Berkshire Hathaway, but when he speaks, investors still listen.

Driving the news: Buffett articulated his concerns about America's gambling culture in an interview with CNBC, saying speculative trading is undermining long-term investing.

"It's tough to find values when everybody is preferring gambling," he said.

He added: "Since humans love to gamble so much, there's more money in, in actually cultivating gamblers than there are cultivating investors."

The big picture: Buffett's comments come amid the rise of prediction markets like Kalshi and Polymarket, which are giving investors the ability to risk money via alternative methods.

Kalshi recently debuted perpetual futures, or perps, allowing investors to effectively bet on whether the price of an existing asset will go up or down.

And the prediction markets are under fire from critics who say they're facilitating gambling — particularly on sports — outside of the auspices of state gaming regulation.

The other side: Kalshi CEO Tarek Mansour said Tuesday in an on-stage interview at Axios House DC that many prediction market users feel like conventional markets "are not working" for them.

"They feel like the game is rigged against them — and they're mostly right. There's no way for them to get an edge in those markets," Mansour said.

Friction point: The rapid expansion of sports betting has been blamed for fueling gambling addiction, particularly among younger Americans. And critics say prediction markets are doing the same.

What we're watching: It remains to be seen whether efforts by both industries to invest in problem gambling initiatives and support legislative efforts will be enough to satisfy lawmakers.

Mansour appeared Wednesday at a press conference on Capitol Hill to support a new bipartisan bill to help prevent kids from using prediction markets and sportsbooks by requiring facial recognition technology to verify their age before they can bet or trade.

Kalshi also recently joined the National Council on Problem Gambling, becoming the first prediction market to do so.

The bottom line: The conversation about America's gambling habit is reaching the highest levels. ...