The gambling industry is heavily regulated. It has a seedy reputation that has carried over from Depression-era mobsters. At their best, strict gambling regulations protect bettors from those criminal elements that gave gambling its bad reputation. They prevent money laundering at sportsbooks and enforce transparency from casinos. In many ways, these regulations legitimize gambling in a way that would’ve been unheard of in the 1920s. 

However, the trade-off for strict policies is reduced competition and less innovation. Even in states where gambling is allowed, there are strict rules about where casinos can be built and how many sportsbooks can operate in-state. Those are major barriers to entry that make it difficult for startups to launch.