My experience is with 3rd world countries, specifically Thailand, where gambling is illegal. I know you're not advocating for a ban on gambling but I think it's worth a mention that due to its illegality, there are widespread issues that stem from it: corruption, cops being in on illegal gambling dens, and mafia / gangs that sprung up to run these under ground dens.
Aside from the more organized underground gambling, there are also smaller village style gambling where within a village / town / city, there are bookies that will collect your bet (and people bet on anything: soccer being the main one.) Basically addicts will find a way to gamble whether it's banned, discouraged, organized, or legalized.
In the case where it's illegal, the creditor who the addicts borrow money from are usually loan sharks or gang members that take extreme means to recover any money they can. Many families lose homes, life-savings, or even get killed. So it gets pretty bad, IMO it's worse than a legalized gambling system.
People who wants to gamble prefer to go to the legal means as it pose much lower risk of extreme repercussions... but if it's not legal, some of them would still find a way to gamble. This may mean that the number of people who do gamble reduces... but I'm not sure by how much and whether that ends up tipping the scale in favor of a ban.