Well aware of that history, but that's another subject, political corruption ( which accentuates my point about gambling leading to corruption )Here's where your logic falls through. In a "friendly" game, the only money at stake is that which is bet among the group. There is no "purse" at stake.
It wasn't legal because congress basically wrote some legislation that gave Vegas a monopoly on sports books. Some folks decided to contest that, and the SCOTUS saw that what congress had done was basically create a rigged game.