The legality and taxation of USDT gambling transactions and profits depend on your local laws and regulations, so they can vary highly. The catch here is that Tether faces quite a few controversial accusations regarding its operations, and it has also dealt with legal disputes. For example, it is fully banned in the New York State of the USA. Every month articles sprout saying that Tether is about to collapse but despite this, nobody has ever lost Tether funds. It is still the most popular stablecoin in most crypto exchanges and facilitates the transfer of billions of dollars. The case is highly debatable, so it would be better to do your own research.