While I in no way support habitual gambling, the second you push for something like that, you will have a sizable group of "freedom activists" up in arms. More likely, I see it being more-heavily taxed to make it less appealing.
Prediction markets are a way of effectively placing a "bounty" on something you would like to happen. Or capitalizing on one of these existing bounties because you're able to affect the result. It's a way to commodify power (and information of course, which is what these platforms bill themselves for), converting it into money, which can you can build further power with.
Good luck getting all these countries banning gambling companies too. (Maybe Brazil did with Lula, but still).
So it's not surprising someone would be against restricting gambling. The hard part is to how the gov should do it. But it's not government's job to please every single person.
Online gambling was literally illegal in most of the US a decade ago, even on the modern post-social-media internet. You could still do it by jumping through hoops like using a VPN to access foreign gambling sites, but you couldn't get it in the App Store on your iPhone, and you weren't spammed with ads for it every time you watch football.
It's not hard to imagine going back to that world; it wasn't that long ago. I used to support legalizing online gambling back then, but we've run the experiment and seen the results and it's past time to shut it down.