Do you need physical RPM, or are you just looking for engine RPM? I ask because most gokart data acquisition systems get RPM from the engine and do it with a sensor tied to engine spark. I'm fairly certain it's some kind of clamp sensor that just goes around the outside of the plug wire and doesn't actually CONNECT to the wire (and thus is some kind of current sensor, I'd guess). I'd research that angle if I wanted engine RPM.
If you are looking for axle RPM (which can be different from engine RPM since you have a clutch that slips or a gearbox, depending on your gokart), then yeah, you'll need something more like a hall effect sensor. Stingray covered that pretty well in his response.
--Donnie