Would it actually boost government revenue, or could it backfire and discourage people from gambling altogether, knowing it’s already hard to win and when they finally do, they still have to pay taxes?
There isn't anything that the government can do to discourage people from gambling because people won't mind giving the government 50% of the rewards they get because they already considered the money that they're winning from gambling as a free gift. The taxing was done for the government revenue and not because the government are interested in stopping people from gambling. The government only cares more about the revenue they're getting and not about what their citizens are suffering. The government can't stop anyone from gambling because people can still do it hidden when they make gambling illegal in the country. Doing that is also going to make the government to be missing out of revenue that the could have been getting from the casinos.