I don't buy the argument that it offsets costs, or even that there are serious costs, where it concerns gambling. I wouldn't be surprised if the law enforcement mechanisms are more costly, by comparison. Rather, it is an attempt to engineer behaviour. In that regard, it becomes a judgment call by a government that a given behaviour is not quite bad enough to ban, but bad enough to discourage. Cigarette taxes where I live (Canada) are high enough that a black market in untaxed cigarettes (largely sold via aboriginal reserves) thrives. But others will point to decreasing rates of smoking as a victory, thus justifying the policy.