Casinos are deemed acceptable and gamblers are (somewhat) protected instead. Instead of avoiding the bad situation, it makes it less bad. It’s just a different risk management strategy; prohibition would not be ideal either.

I think jayd16's point is that everybody knows that casinos are negative sum and have for a long time. But still, they continue to exist. So we can't assume, as ravar does, that in the long run the market will eliminate negative-sum things.

Right. My point was that we don't punish gamblers. instead we regulate the environment in which they gamble to limit the extent of the damage.

Otherwise, yeah. Negative things don't disappear just because they are negative.