There’s no problem on our end since we can always find a casino with a good reputation. But the government won't just sit back and watch these casinos make money without taking a cut. In some countries, even gambling winnings are taxed  so they’re profiting from both sides. How do they manage that? By regulating the casinos.

And you're also right, regulation doesn’t always mean protection. It can actually increase the chances of fraud, not necessarily from the casinos scamming players, but more because casinos become ideal platforms for money laundering if they’re left unregulated.