Comment by dakolli | Hacker News Reader

Comment by dakolli | Hacker News Reader

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You can't tax revenue in sports gambling markets, it actually just leads to predatory gambling products with massive vig/house edge. This was attempted in Tennessee. Margins are extermely low sports betting, like 4.5%. Its actually a loss leader typically. So for casinos that only have this type of wagering it taxes like this aren't going to work. A casino might turn over 50 billion yearly but only have a 2.5% edge in sports betting but you're proposing we tax them on the 50 billion. It doesnt work.

It will either push them out of business, or they'll find a way to screw the player to increase margin through even more deceptive products.

If the legal entity can't operate because of a tax on revenue than illegal offshore entities will gladly take their place and do.

The only solution really is sharia law, a complete ban and harsh punsihments for all operators and customers. I say this ironically but it actually is really the only solution, and even this doesnt work entirely.

Sports betting was, if not prohibited, then highly-proscribed for most of my life. You could do it in a few places like OTB, go to Vegas, or deal with an illegal bookie. People still gambled, but this made the problem orders of magnitude smaller than it is today. We did not need Sharia law or the guillotine, just an existing system of laws that were generally highly workable. It is not helpful to pretend like we need wild solutions just to achieve results we’ve already achieved and maintained for decades.

I really dont think the problem has gotten worse, its just more visible. The previous status quo didnt work either, you just didnt hear as much about it because there weren't commercials.

In all reality, the NASDAQ does the entire yearly turnover Klashi and Polymarket combined in a few minutes. It hasnt become as big of a problem as people make it out, but its still a problem.

But there's no going back to the status quo with 1990s methods of enforcement. Everyone knows how to use crypto and VPNs, you'd just be pushing people into shady offshore.

> Everyone knows how to use crypto and VPNs,

Not everyone who has placed a bet on Kalshi or Polymarket necessarily knows how to use these tools.

> you'd just be pushing people into shady offshore.

Hurdles help. Not everyone will know how to jump every hurdle. Not everyone will be willing to put forth the effort. Will some people? Sure. But hurdles do cut down on the overall participation.

DraftKings alone is estimated to do $6.5bn in revenue in 2026, and the whole US segment is close to $20bn. This is the market that Kalshi et al. are targeting, and these are huge sums of money. You can make sports betting artificially look small by comparing it to the entire equities market (but why?!), however the more reasonable standard of retail product/entertainment companies these are big and rapidly growing businesses.

Why do you assume the tax is on bets and not on profits

Im replying to a comment that says it should be taxed on revenue.

The revenue of a sports book is the spread captured (vig) along with any losses/gains from an imbalanced book. The wagers are not counted as revenue. DKNG did $6B in revenue in 2025, if wagers were included that number would be a lot higher.

That being said I still don’t think taxing on revenue is a good idea.

People here have said even crazier ideas on HFT trading tax or wealth tax. People have lots of crazy ideas about taxation that clearly doesn't work. It's hard to tell if they don't get it or don't care because they actually just want it banned outright.

Few here would be a good politician or law maker.

Or maybe you're just assuming the stupidest possible versions of those ideas

They're all stupid relative to the posters understanding of tax law and finance, which on HN is pretty low.

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