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I think a lot of the issue with your interpretation of this is that you feel like Prostitution and Gambling are morally wrong. But that will never stop people from doing those things. You regulate and control it to get the criminals out like they did with gaming commisions to cut the mob out of the gambling. If a woman is getting paid fairly and chooses to be a hooker (which is how it would be if regulated, no pimps probably just a pre pay at the counter kind of thing) and they are tested regularly how is that not a net positive for society? Less STDs, less rapes, no human trafficking because it turns out that a lot of women would absolutely choose to do that work without a pimp that can and probably will hurt you breathing down your neck. Same with gambling we regulated it and people who choose to do it should be allowed to make that choice. Also, did you know that Cocaine and Methamphetamine are not schedule 1 drugs? This is because the US government manufactures controlled amounts of them for legitimate pharmacutical uses. Google it if you dont believe me. Its funny becuase, the cartel has zero control over that and never will. What makes you think that can't be scaled up and adopted to a wider market? The US government literally manufactures lab grade cocaine and methamphetamine and all kinds of other shit too Ketamine and Opiates and the drug cartels make zero dollars and zero cents off of that process. So to say it can't be done is ignoring facts.
I don't take a stance on either from a morality basis.
In regards to gambling, I see it as a fundamentally predatory business model that preys on the people that are least able to afford it. If a rich guy wants to blow a million dollars on blackjack, I don't fucking care, that's not my problem. If a poor person is buying $500 in scratchers because that's they're only hope for excaping poverty, that's a problem. Or a retired person that pushes a button as fast as they can on a slot machine, burning through their retirement savings, because that's the only thing that lights up their dopamine receptors anymore. And there's a lot more of the latter two than the former. There are also a whoooooole lot of people with gambling problems, and a person that's blowing all their money on gambling ends up becoming a problem for the people around them, as they are no longer able to take care of their own needs.
The only issue I see with prostitution--aside from the fact that a not insignificant amount is from trafficked victims--is the public health risks. Given that healthcare in the US is outrageously expensive, there's not a great way for people that are usually working at a near subsistence level to treat STIs. And, for certain STIs (HIV, hepatitis C), they are strongly disincentivized in regards to informing customers, as there's not cure and long-term treatment is deeply burdensome.
Yes. Cocaine and meth are both schedule II, which is used for drugs with a high probability of abuse, but still have recognized medical uses. (Marijuana is currently schedule I, but I believe that the FDA has been asked to re-evaluate it an move it to schedule III, which would make decriminalization much easier, and would mean that it would no longer be a prohibiting factor for buying a firearm.) Cocaine is--or was--used for surgery in highly vascular areas (esp. nose and sinus surgery) because it acts as a vasoconstrictor. Amphetamines used to be issued to soldiers, esp. pilots, that needed to be alert and focused for long periods of time. See also: Aimo Koivunen. The fact that certain drugs do have legitimate medical uses doesn't mean that the abuse/addiction is not a material problem. Try chatting with anyone that has been prescribed anxiolytic medication, and has tried to titrate their dose down, or discontinue their use entirely (same goes for certain SSRIs, TBH). Yes, drugs are a personal choice, right up until they're functionally not a choice any more because you'll suffer serious physiological effects from cessation. And it's not like the US has a great track record of providing effective assistance for people that want to get cleaned up. Full legalization or all recreational drugs, without also building the necessary social supports, would create far more problems than it would solve.
I do see how the poor person with the scratchers can be a negative for society as a whole, but if you take that freedom of the choice from people many will still choose to do it and then criminals are the only ones controlling it. I think for the prostitution to work (like it does with many tight restrictions in certain counties in Nevada) you would have to enforce safe sex practices and mandatory sti testing for ALL of the possible different ones and this can be achieved with the assloads (lol) of money legalized prostitution would be raking in. As far as the drug conversation goes I pointed that out to show you that drugs can be produced and manufactured and distributed without any criminality involved if you do it correctly. Yes, drug use can affect society negatively and that is why you would use some of the absolute mega fuckton amount of money that industry would be making and require that thr manufacturers themselves (and taxes only on the sales of those goods) are paying for increased treatment and homeless prevention and rehabilitation. I dont think you are considering the obscene amount of money these industries would make if legalized. You use a portion of that money to fix the problems behind it, much like they make tobacco companies do that right now in the us. They did that and slowly but surely tobacco smoking has gone down. Vapes are a bit different but thats another good example of how outlawing something and not regulating it correctly (pods) made the problem significantly worse now we have disposable batteries poisoning the earth because they just can not choose to regulate the things people will do no matter what. It truly dpesnt make any sense to me except from a viewpoint of absolute boot crushing control. Thats the only reason
Gambling: Legal gambling doesn't stop illegal gambling. Like dog fights, cock fights (which--disappointingly--involve chickens), or people that are out of money and credit; they're still going exist. It would be healthier for society to make gambling unpopular, rather than squeezing every last bit of revenue out people that usually can't afford it.
Prostitution: Legalizing under the Nevada model does nothing to illegal prostitution, because the Nevada model puts it out of financial reach for most of the clientele and restricts the locations to places that the clientele usually aren't (e.g., they're a long way out of the city, and you have to drive several hours from Vegas to get to the closest one). An (illegal) independent escort in Las Vegas will typically cost $350-500 per hour, and quite possibly far, far more. A sex worker at a legal brothel will easily cost more than $1000 for the same time period. A sex worker controlled by a pimp is going to be $200 or less, and have less ability--or no ability--to refuse acts that s/he doesn't want to do. The cost of compliance with regulations is on the sex worker, who passes it on to the clientele; that regulatory model means that legal avenues will end up being less affordable to people than illicit avenues. (And, given that you can pretty easily find escorts working in Vegas despite legal options being available in the state, I think it's pretty clear that people will be price sensitive.
Drugs: Same issue. Regulatory oversight--which is necessary for recreational drugs to not kill people unintentionally--increases costs, and those costs get passed to the consumer. For a very real-world example, a single 10mL vial of 200mg/mL testosterone cypionate costs about $60 at Costco, and over $100 at Walgreens, et al.. (Testosterone cypionate is a schedule III drug.) You can buy a 20mL vial of 300mg/mL testosterone cypionate on the black market for anywhere from $30-60. You can buy raw hormone powder for under $2/gram (e.g., the raw hormone used in the black market 20mL vial costs the producer $12 or less). A therapeutic dose will be perhaps 150-200mg/week, depending on your own physiology, and what you're target blood values are. An IFBB pro bodybuilder is going to go through a minimum of 3,000 mg/week during a bulk. If an IFBB pro were to buy their testosterone cypionate legally--if they didn't need a prescription--it would cost $90/week, versus $15-30. (This ignores all the other shit they take, too.) IFBB guys have been using their black market suppliers for years, maybe decades; what's their incentive to pay 3-6x as much for something they aren't going to see a difference in? Legal marijuana has depressed prices for illegal marijuana, but it's still cheaper to buy a quarter from my local guy than it is to buy in a dispensary.
Organized crime makes a fuckton of money by forging tax stamps on cigarettes to evade taxes. Before prices started going up dramatically on cigarettes (which I think was a good thing, since smoking doesn't end up costing just the smoker), that kind of fraud and tax evasion was chump change. Now it's millions.