Comment by ivancho

My model was not to demonstrate that utility doesn't go down ever, it was to show that it can do that extremely slowly, which makes the utility argument about why we discourage it societally a bit weak - we're clearly not very good at discouraging any other behaviors resulting in long-term bad outcomes (for society or the planet), and we reward all sorts of risk-taking.

I think the simpler explanation is that gambling is seen as addictive and destructive on an individual level, and there is no need for total utility to explain why that's undesirable