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I think this is a good argument. That said, seems like adding gambling to skeeball or pervasive sports betting apps are good candidates for prohibition by regulation.
I'm concerned about regulatory capture - the industry infiltrates and ends up controlling regulatory bodies because there's so much money to be made.
The answer to regulatory capture isn't prohibition though, because prohibition essentially means unregulated.
Prohibition is effectively the same as a tax on gambling from the point of view of gamblers, but the tax is just the additional effort people have to spend to not get caught or fines when they do. The difference is there's no tax revenue for the governing authority to redistribute, fines go almost exclusively to pay for enforcement.
What I mean is regulating a vice means putting some kind of guard rails on it. Alcohol is legal, but not for children, and many places have rules about how it's advertised, training for servers and not serving clearly intoxicated customers.
Should there be rules about gambling like, "you've lost $10k this month, no more betting for a while", that kind of thing. In recent years it seems like you can bet on anything anywhere, and it's being pushed very hard in advertising. Doesn't seem like there is much going on in the way of regulation.