Watched a lot of movies where gambling is done in the prison but it's basically illegal yet it's seen as the best way to entertain themselves but if caught in the act the person will be penalised, however gambling is something that seems to have to boundaries in our lives this days even the slightest things lead to gamble. I've seen kids gamble without a good knowledge of what they are doing and yeah I agree with you that gambling will always exist everywhere. One of the movies that seemed so real back then is a movie that fighting is a game and it's used for gambling, whoever is the strongest sometimes gets help from the outside to fight and get out of they win.
I like the fact that these guys create their own happiness even when in prison. Just like you, I have not visited the prison yard to see how these guys gamble, but I have watched some movie scenes that had prisoners gambling which caught my attention, especially the fights/battles in prison where they had to bet on who would win the fight. Usually, money is not the only benefit they stand to gain from engaging in such gambling contests; meals, tasks, errands, toiletries, etc., are potential rewards for gambling.
No one can really restrict a real gambler from gambling except he makes up his mind on his own. These prisoners are a great case study.