We have been in the crypto gambling space since 2018 we can clearly see that when the market goes down, the activity at the crypto casinos goes up.

Why do you think this is happening?
Well, I haven't paid much attention to notice and confirm if this is true, but if actually it's happening that when the market goes down, gambling activities goes up, I think the reason why this is happening is very simple, people are always looking for ways to make money, and we all know that when the market is generally down, trading becomes less profitable, so I am assuming or guessing this is usually the time most people who are also interested in gambling turn to it to see if they could make some money off it.
Nothing is wrong in this I believe, it's just people exercising their freedom to various sources of income, promoting diversification in general.