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i'd be inclined to agree

I think this is the key here really - banning it outright is too far, but adding regulations and restricting it might allow for illegal gambling rackets to be more profitable/lucrative. I know some earlier comments mentioned that gambling is illegal in California, but when you look into the specifics of it, there are so many exceptions to this rule that it's more accurate to say it's "heavily regulated" with a tonne of hoops to jump through, to be done legally (see here). It's also true that LA has a plethora of casinos. Just get Gov to oversee a stringent licensing process for gambling licenses, keep the tax high on it as per SAMP, and see what happens.