Indeed. Corruption happens in many countries, and it's not just happening in the government, but it's also happening in any aspect of jobs. So it is not surprising if we see some corrupt officials from the government have back up for the gambling places, so the law can not touch those places. But I am sure that in the end, they can not always break the law, and there will be some honest officials who would chase them, and arrest them because of their fault.
The reason why illegal gambling flourish is they don't pay the taxes. When casinos don't pay taxes and don't have to follow the guidelines, it would generate more profit and mostly provide better returns to gamblers. Many of the countries have strict gambling regulations and they take a good chunk of profit as taxes.