The meme-stock frenzy has turned markets into a 'casino society,' says billionaire businessman Barry Sternlicht

• Barry Sternlicht said the meme and tech stock craze has created a "casino society."
• The Starwood Capital chief compared the current market to the dot-com bubble.

Starwood Capital Group CEO Barry Sternlicht said a new, highly speculative stock market has emerged amid the meme-stock frenzy.

"You really have two stock markets today," Sternlicht said on CNBC's Squawk Box Wednesday. "You have the one I grew up on. I went to business school, and I learned about discounted cash flows and companies' ability to pay dividends and grow."

"And then you have a complete casino society," he said, referring to this year's meme-stock frenzy. It's a "complete, total speculative bubble," he said.

The billionaire businessman, whose firm has about $100 billion in assets under management, compared the boom to the dot-com bubble, saying, "There's a lot of warnings signs that we are in 2000 and 2001 before the Nasdaq dropped 82%."

The dot-com bubble and the meme-stock craze both had at least one thing in common: high levels of retail participation.

Meme stocks became a fixture of markets in January when an army of retail traders mobilizing on social media drove epic rallies in shares of struggling and highly shorted companies like GameStop and AMC, among others. Some on Wall Street started warning against meme-stock "gambling," saying the stock prices are wholly disconnected from a company's actual value and could crash at any moment.

Sternlicht said meme stocks aren't the only thing driving the market frenzy, considering some of the multiples on tech companies "are impossible to imagine." The Nasdaq has risen about 13% so far this year, touching an all-time high in September.