Wife works in the casino industry. As far as I know, there is very little (overall) state-owned gambling. The states, or more importantly, localities within the states, vote whether or not to allow gambling in their area, and what kind of gambling - from full on casino complexes to simple video poker machines in convenience stores. The states, of course, take a cut, which is generally pretty large as a percentage, and applies it as they see fit - general fund, education, etc., complete with all the grifting that most state legislatures do.
It isn't and shouldn't be a federal issue.
All states that do allow gambling require the casinos themselves to fund and run gambling addiction prevention programs, so no cost to taxpayers. The Right should love the idea, because the revenue comes from people perfectly willing to give up that money and personal responsibility is high on their list of ideal personality characteristics. Many on the left might claim that it hurts the poor most (it does) and leads to addiction problems (it does) and the breakup of families (it does).
All in all, it is allowed at the will of the population that it will affect and I have no problem with the people deciding this kind of issue on a case by case basis.
BTW, the casino industry as a whole has been hit pretty hard by the recession, but there is so much money in it you won't hear them bitching about it, or not loud at any rate.

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