But a much easier argument against sports betting is that it ruins the sports. Players throw. They get good at subtly cheating. The gambling apparatus latches itself to the sport, to the teams and players, the umpires and judges, the sporting organizations. With this much money on the line, it's not a matter of if but when games are thrown, cheated -- the bigger the game, the bigger the incentive. It's even easier now because of the amount of side/parlay betting that is available. It exhausts the spirit of competition.
Sports gambling is diametrically opposed to sport itself.
However people should know what regulating ethics to this degree looks like: the modern PRC. In the PRC you get a government mandated timer on your MMOs to ensure you don't spend too much time playing videogames. In the internet cafes there's 24/7 a CPC bureaucrat prowling around keeping an eye on your chats - plus automated mandated filters which depending on the implementation can auto kick you from a multiplayer match, hence the entirely viable strategy when playing against PRC players to spam "FREE HONG KONG REVOLUTION OF OUR TIMES CCP COMMITS GENOCIDE AGAINST UIGHUR MUSLIMS XINJIANG" into chat to get them kicked from the match.
There's industry level morality controls as well such as not being allowed to make a tv show featuring "feminine men" and the implicit ban on showing LGBT couples.
Personally I don't trust a State to choose the correct morals, be it aesthetically communist or aesthetically capitalist. We can look at America's history of moral laws to see another example, such as prohibition.
Surely the reason prohibition failed so badly was that it wasn't democratic. You can't mandate against vice unless you have the support of the majority.
The morals of society is directed by culture. The state does not and never have a monopoly on culture, because culture is embedded.
If a culture is against gambling, you need no regulation/laws at all. The daoist would argue that the need to have strict laws on behaviour is due to a deviant culture. As an aside the legalist argues that humans are evil, fickle and morally corrupt by default and need strict laws.
I'm just making shit up, but perhaps an Abrahamic culture needs salvation, thus it needs outlets of sin so that it generates demand for people to be saved.
I think society can generally be against something, yet it succeed. Most people consider greed to be bad, but it's the foundation of capitalism. I'm not sure if most people would say gambling is wrong. (This survey, https://www.gamblingcommission.gov.uk/blog/post/gambling-sur..., found only 41 of self-selected UK gamblers rated it positively.)
A democratic state should reflect the desired culture, if it doesn't it's not being democratic. Businesses can also do that, as can other organisations. Most businesses goals are aligned away from benefiting society in general; whilst a democratic state should be at least loosely aligned with that end (by definition).
Thanks for a thought provoking response.