I 100% agree with you that the regulators have the legal advantage here but I am less convinced of the public benefit. The popularity of Binance must indicate some demand for the product.
"There's demand for my perpetual motion machine!" is not a good argument.
What they have said is Binance cant offer regulated offerings such as derivatives and options, for which a licence from the FCA is required. Those licenses are given out easily enough to places like plus500 wc. They are essentially gambling, you dont buy securities/assets/stocks/currencies you just bet on price movements of those items.
It sounds like you're defining gambling in terms of tangibility.
Very few people take physical delivery of stock certificates, bond certificates, or currencies. In some sense, their trades are just bets on the value of numbers in a database.
Are silver futures contracts "just a bet on price movements"? What if the contract is physically settled and the buyer takes delivery of the silver bars to their home? Is it still "just a bet"? What if they always sell the contract before delivery? What if instead it's a cash-settled futures contract? It sounds like you don't consider spot fx trading to be gambling. What about FX futures? What about FX CFDs?
What about synthetic financial products with less volatility than some of the more volatile equities. Are those gambling?
Without expressing more detail or nuance, it sounds like you're defining gambling as risks you don't take. There's an argument to be made about exposing retail investors to leverage and high volatility. Though, you don't seem to be making that argument.
The trouble with defining gambling by tangibility is that most of our modern dealings are very abstract, and it basically ends up being what you're used to vs. what feels novel/foreign.