If we don't regulate behavior at some level, and continuously pursue "freedom" over all else, our society will not be acting in the best interests of its people.
I notice that you don't have a response for 1. I understand, because, it's very challenging to solve real problems like preventing all gambling over the internet. In which case, it's easier to regulate it for fairness than to have it remain underground and completely unregulated; that's not good enough for some people though.