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1.
"Lauging out loud" and "you are a hacker" or the former along with "A hack is being used"

this denotes that the hack is humorous.

or even that the legitimate player that is accused of hacking is in fact so good, that it is useless to play them.
gamer 1: LOL HAX

gamer 2: what?
by ChaosTheory June 24, 2004
 
2.
It's "Laughing out loud" and "Hacks" together, that basically means someone is cheating in some game, mainly FPS.
Gamerone: WTF, you just keep shooting only headshots!
Gamertwo: lolhax
by fokker1337 January 23, 2008