I think you're missing his point. Those very entities have agencies which are both "protecting" the public by imposing regulations that prevent them from expenditures with negative expected value, and at the same time peddle them.

Imagine if there were a state-run cigarette producing public benefit corporations alongside public health departments. You'd have two agencies, one cultivating and the other discouraging the same toxic habit at great public expense. We already have this with various OTB/gaming commissions and gambling addiction services. It's an insane conflict of interest to waste tax dollars on.

Also corn subsidies vs. obesity-related healthcare; free roads & parking vs. smog controls; loose monetary policy vs. financial bailouts; having everyone prepare their own tax returns (as opposed to the IRS just sending out a bill along with their calculations) vs. spending money prosecuting tax evaders; and CIA-financed terrorists using our own weapons against our military.

When you think about it, most of humanity's problems come from "fixes" put forth by some other branch of humanity. Humans are not particularly logical or inclined to see the big picture; they are very good at feeling a pain point acutely and slapping a band aid over it. Over time, this becomes rather absurd, but in the meantime the complexity lets societies that act like this grow bigger populations and amass bigger armies, and so that's all you see today.

Most historical peoples were quite happy to live as hunter gatherers, except that larger & more miserable societies had a knack for enslaving & eradicating them.

> Those very entities have agencies which are both "protecting" the public by imposing regulations that prevent them from expenditures with negative expected value, and at the same time peddle them.

Those two things aren't necessarily in logical contradiction.

There will always be demand for gambling and get-rich-quick schemes. Maybe it's better that the state monopolizes and regulates it (and makes it clear that this is not an investment), rather than letting private entrepreneurs take advantage of that same habit in even more effective and unscrupulous ways.

The state is not a particularly efficient entity, so perhaps letting it do evil in a bumbling and clumsy manner is the least overall evil.

This is a compelling argument, i.e., that regulated promotion is part of the long game toward protection against toxic behaviors. Probably the most notorious example would be supervised injection sites. The devil in the details is to what extent do you impose costs on the public majority that isn't afflicted with the problem, and accounting for all of the externalities, not just those produced by a commissioned "study". It's one thing to implement a progressive tax to claw back some of the advantages wealthy people reap from regulation. We can read those numbers on a balance sheet. Quite another to actually build the betting parlor or injection site, which invariably lands in the lower to middle class communities. Who's really paying the higher costs here in broad terms of value and quality of life impact?