Gambling is more and more evolving into something that is not just the house taking gamblers money. Not that there was ever anything wrong with that either - people who choose to trade dollars for entertainment value should have the freedom to do so.
But nowadays, there are sports betting and poker communities with almost zero juice - which makes it essentially the stock market, although a zero-sum one. At its base, it is two people wagering and the one that has better information or ability than the other one profits in the long run. The losers go bankrupt, or get smart first and quit playing.
Which is pretty much how most money is earned in this country.
I think your better instinct was the “it’s not the government’s business” answer.
For every sophisticated punter trading on superior knowledge to win at sports betting or online poker, there are dozens of loser-suckers. There have to be, otherwise the system does not work.
And I really don't like the "money for nothing" ads pumped out relentlessly by the State lotteries. I once had a secretary whose retirement planning consisted of buying lottery tickets. She would not listen to me when I showed her the math. Lotteries are a tax on poor folks who can't do math.