I think the idea is that if you legalize games of chance and have them run by the state, the rules are at least fair and there is some level of oversight that prevents people from being completely taken advantage of. The games of chance are still fundamentally unfair, but it's a 60/40 kind of unfair instead of 80/20.

In the absence of state lotteries, people with gambling problems would just find another way to gamble that supports organized crime rather than the state.