It's crazy to be honest. It's like the cops themselves selling drugs, which in reality do happen in some places.
Seems like these agencies are corrupted to the core. Since they are running gambling operations themselves just imagine how many sites would have bribed them.
Can't really trust anyone these days. You might be thinking your funds are under safe hands but they themselves might be the theives.
The people who make the laws consider such laws to not apply to themselves, so they can act as they wish. In India there is a explicit 'caste system', and in other countries there is an implicit one. People pretend they are all equal citizens towards the law, but for real, we know it's not how it works...
Moreover, the fact there is a blackmarket going on inside the country means there is profit to be made through bribery by some officials. Casinos will continue operating, but instead of paying directly to the government in a regulated way, they pay to government's officers who take care of the inspection and control of clandestine operations in the country.