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Comment by edot | Hacker News Reader

Damning which way, though? Are gambling taxes too high, or are corporate taxes too low? And since corporate income is surely higher than gambling income, I’m inclined to think that gambling taxes are too high AND corporate taxes are too low, creating this odd fact.

Edit: and I know it sounds weird to say that gambling taxes are too high, when one could argue that high taxes are meant to disincentivize a thing - but if that thing is highly addictive, and if no other state action is taken to disincentivize that thing, then it’s actually a really sticky income source for the government who now doesn’t want to get rid of their cash cow. Tobacco ads are outlawed, which did more than taxing tobacco. Gambling ads are absurdly common.

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When you lose (most people, most of the time), you don't have to pay tax on winnings because there aren't any. But gambling itself seems like sort of a regressive tax that preys upon those susceptible to gambling.

Edit: at least with state lotteries the state gets most of the money so it is more like a tax; in the case of corporate sports betting the corporation takes the money and then pays a small corporate tax on it.

There is a theory that talk of "those susceptibile" to gambling is in fact astroturfing by gambling corporations to make it seem like they're only damaging the weak willed.

And you're not weak willed are you? So nothing to worry about. Bad things only happen to bad people.

Good point - random or unpredictable rewards are known to be compelling/addictive for rats, and the same trick seems to work on most humans as well.

Though as I understand it much of money in gambling is made from "whales" - players who lose lots of money and keep playing anyway. The same term is used for f2p game players who spend a lot of money on in-app purchases, often tokens for virtual slot machines for desirable in-game items.

> When you lose (most people, most of the time)

For modern gambling (not including some prediction market setups) its actually all of the people (still allowed to play), most of the time.

Because if you win regularly they limit or outright ban you from playing. If they keep letting you play they have determined algorithmically that you're statistically a loser over time.

So not only is this easy access to online/app-based gambling financially devastating for those predisposed to become addicted to it, its also effectively legally rigged in that the house has no obligation to take bets from people who are actually good at it, and they have all the data they need to detect that very quickly.

Do you have proof to back up this claim? I know there are professional people and organizations (companies) that are heavy into prediction and sports betting, they are not getting throttled.

It's a very common thing, it's called gubbing in the circles I know it from.

There are services called betting exchanges that essentially facilitate peer-to-peer gambling, they make money from commission so they don't care at all about your betting strategy, big players and companies are probably operating on those platforms.

This might not be the case for crypto market because crypto, but all the centralized sports betting platform do it.

Otherwise they wouldnt be able to give out "free bets money" for marketing purposes all the time as you could just play opposite bets on multiple platforms.

Federally, That's not even true anymore. In the BBB there was a tax code change that says you can only write off 90% of your losses from sports betting now.

If you win $95 on one bet and lose $100 on another, you owe taxes on $5 of that $95.

> In the BBB there was a tax code change that says you can only write off 90% of your losses from sports betting now.

If I understand correctly that’s no longer the case as “sports betting” prediction markets are now becoming a financial product.

https://www.bloomberg.com/opinion/newsletters/2025-07-10/do-...

We're kind of in the middle of that shift, but yeah, prediction markets are futures contracts and handled differently.

The main sportsbooks you see advertising on TV like Draft Kings, Fan Duel, etc are still the old sports betting model where you're betting against the house. That's still taxed as sports betting. Kalshi, Polymarket, and some smaller sports focused apps like NoVig and Sporttrade are prediction markets that allow sports predictions and those would allow a full write off.

That said, I've heard that most of the major sportsbooks like Draft Kings and Fan Duel are building out their own prediction market platforms, so I think it's only a matter of time until everyone is in that model. Even ignoring the tax implications, it's lower risk and more consistent revenue for the books since they can structure things so they make money on every trade (if they want).

That seems wild since exchanging “bet” for “stock trade” results in a very different result…

The difference is there's a clear societal benefit to stock market investment, whereas there's a clear societal detriment to sports gambling as it exists today.

Regressive taxes can be counterbalanced by redistributive policies. Sales taxes are regressive too for example and bring much much more revenue. The issue is sales taxes disincentivize consumption whereas gambling taxes disinventivize gambling.

> Sales taxes are regressive too for example and bring much much more revenue.

That's because "tax the rich" is actually pretty bad tax policy because the rich really don't make a lot more income than the upper-middle to lower classes.

If you look at countries with robust social safety nets, they don't get there by taxing the rich.

They dont get there by making rich untaxed, uncontrolably powerful and above the law either. Taxing the rich is a necessary component, just like the justice system that applies to rich too.

They do on the other hand hold a significant portion of the wealth. Unfortunately wealth tax is complicated, both because actually measuring the wealth for tax purposes can be hard, and the rich can (and will) just move away from any sufficiently effecient tax scheme.

So upper middle class ends up paying the bill.

The really bad part is that the middle/upper-middle class is the real cash cow, the top ~75%. These people are incredibly numerous and have good to incredibly good disposable income.

But since they are such a large cohort, you cannot form a policy around increasing the burden on them. And after all, the tech family pulling $450k/yr are still a "working grunts".

So it's all eye's on the top 1%, but a true wealth gap fix would actually come mostly from harvesting the wealth of the top 20-30%.

> the rich can (and will) just move away from any sufficiently effecient tax scheme

England managed to confiscate the estates of its major lords through the inheritance tax.

The rich can leave, but they can't take their house with them.

It's easy to tax certain assets, such as land. LVT is actually the ideal tax in many ways, since a LVT is undodgable. Actually it doesn't matter whose name is on the title.

Sufficiently high LVT will deter speculation, leading to collapse in land price and encouraging efficient usage of land and drastically affecting our political landscape.

That’s not the only reason. Well to an extent it is, because the rich are much better at optimizing taxes, however you can close the “loopholes” and such, then there are wealth taxes.

The problem is that the rich are ultra mobile, just like their capital, so unless you restrict that they’ll just move somewhere else where taxes are low.

So countries basically end up competing with each other by lowering taxes to attract them while destroying their middle classes..

Same more or less applies to companies

> whereas gambling taxes disinventivize gambling.

Do they, though? The vig is 10%, very transparently shown in the odds, and paid immediately. It proves very little disincentive. The tax is paid annually and only if you win; for most people, it is 0%. Are we really going to argue that the tax is a serious factor in discouraging the behavior?

Taxing something almost always decreases usage. By how much depends on the rate and the elasticity of demand. Gambling demand is probably very inelastic, much like cigarettes and alcohol. (Your argument supports this too) If the rate is low too I can see your point about not having much effect. But it still has an effect. Excessive sin taxes can be the sign of a nanny state, but otherwise I agree with it. All taxes are bad anyways, some are just less worse.

When you describe a tax that is "paid annually and only if you win", that's plain generic income tax.

That's not the gambling-activity-specific taxes that Stoller's article discusses - typically applied to gambling businesses' revenues, not bet winners specifically.

Yes, because if the tax were 100% then people would still bet, they would just move it off platform. Just like every other sin tax in existence.

Every other sin tax is levied on the consumer, unlike gambling taxes.

Huh? Cigarette and alcohol taxes are levied on the vendor in exactly the same way a gambling tax is. Make your own alcohol and drink it yourself, share some with your friends, and you'll never pay an alcohol tax.

Cigarette and liquor taxes are levied on the purchaser, just like gas taxes. Gambling taxes are taxes on the gambling houses/platforms not excise taxes.

Sales taxes are levied on the buyer. Gambling taxes are not levied on the player.

Damning in that pretend I told you my household income was supported by Vinny the bank robber who gives me cash and I launder it for him, and that pays for 6% of my household income. If I told you you can't make bank robbery illegal because I need that money, would you take me seriously at all?

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