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They really should do this with a lot more activities, make gambling legal but illegal for any corporation to be involved in. That way a couple friends can make friendly wagers but huge corporations aren't ruining millions of lives through gambling addiction.
Instead we have it completely backwards, legal for corporations to take bets with a house advantage doesn't matter how many people gamble their rent money away, but then if joe schmoe has poker night at his house with a few friends, he's got to worry about the cops raiding his home.
This was already legal.
The prohibition on gambling is predicated on a share of the winnings going to a House. Specifically, "bookmaking", where a broker arranged odds and returns on multiple parties. Regulated gambling is all predicated on state enforcement of fair betting procedures and machines with set odds.
Nobody was getting arrested for doing handshake bets on the Nicks playoff outcome. At the same time, no court was going to honor a lost bet as a debt owed to the winning party.
I mean yeah but why can't Nick charge 10$ a person to cover food drinks and service? That would be illegal, but a multinational conglomerate using the power of the state to ruin addicts' lives is encouraged.
You've just described how legal poker halls work.