[ocirion]

That would be like banning liquor stores or corner shops selling cigarettes. The monopoly is because the government wants a piece of it. The potential of gambling sites to make huge amounts of money is why the government takes any interest. They will restrict them and/or tax them to fill their own coffers.

[Leynos]

As a parallel example, there are states in America where the only off-licences (liquor stores) permitted to operate are the state run monopoly.

My understanding of the reasoning behind this is centred around morality, although I imagine there's also a financial incentive for the state to maintain this control.

[jeltz]

This is quite obvious in Europe. This financial crisis has spawned a surge in interest in stronger government regulation of gambling throughout Europe. A couple of years ago there was little to no interest.

[wladimir]

We also have high tax rates on booze and cigarettes, for similar reasons, officially to discourage over-use and finance the cost to society (healthcare etc...).