Hamlet speaks this line to Guildenstern, who has come to see him after the King has stormed out of the hall in response to the play. He hands Guildenstern a pipe, and asks him to play it. When Guildenstern claims that he does not know how to play, Hamlet, sardonically, assures him that "it is as easy as lying." When Guildenstern persists in refusing the pipe, Hamlet makes the point referenced in the question above, saying: "'Sblood, do you think I am easier to be played on than a pipe?" He means, of course, that Guildenstern and his friend Rosencrantz are taking advantage of their friendship with Hamlet to feed information about him back to the king, and he knows it. He is both chastising the man for his duplicity, and letting him know that he is on to him, that he does not trust him.