Back in the day when Vegas and Atlantic City was all there was for real casino gambling they could be assured of tourist dollars. Today it is everywhere and nobody has to go to AC or Vegas to gamble.
If your customers aren’t from out of state, your just moving revenue from sales tax on something else to lottery/casino, not generating more overall.
Tada!
People WILL spend every bit of their money on SOMETHING.
What percentage of that something is going to be taxes collected from the buyers to give to the gummint to sustain it's operations is the key.
Deep in the recesses of the mind, gambling IS a bad endevour, so folks don't feel bad when gummint sucks a large chuck of it away.
They are fooled into thinking that THEY are not paying it!