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Addiction Markets

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387 points toomuchtodo | 1 comments | 31 Oct 25 17:42 UTC | HN request time: 0.206s | source
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Humorist2290 ◴[31 Oct 25 23:50 UTC] No.45777973[source]▶

  But if you want to outlaw this harmful activity [licensed gambling], you have to find a way to replace 6.4% of Maryland’s budget, which is slightly less than the entire amount the state brings in from corporate taxes.
A fraction of the proceeds of losing bets from a fraction of Maryland's citizens contributes almost the same to state services -- EMS, education, road maintenance, etc -- than the total corporate taxes levied on all businesses.

Do I misunderstand, or is this just actually incredible?

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only-one1701 ◴[31 Oct 25 23:52 UTC] No.45777987[source]▶
Incredibly damning, yes
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edot ◴[01 Nov 25 01:54 UTC] No.45778641[source]▶
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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musicale ◴[01 Nov 25 03:23 UTC] No.45779015[source]▶
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.

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superfrank ◴[01 Nov 25 03:47 UTC] No.45779104[source]▶
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.

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iamacyborg ◴[01 Nov 25 08:09 UTC] No.45779999[source]▶
> 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-...

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1. superfrank ◴[01 Nov 25 20:33 UTC] No.45785077[source]▶
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).