despite all the propaganda in the US and elsewhere, that's not how regulation works. they might make it a bit more inconvenient (in this case they could require you to prove that you are in a state where they have the license) but business don't just close up when they are regulated. states are never motivated to regulate businesses unless the damage they do otherwise is too big and businesses, generally, just find ways to work within the regulation. if a "business" has to close after regulation it usually means it was doing something so shady that all their customers/victims are better off without it.

Yes, that is the point because they need a license.

Online casino operators could just region block countries, and require customer citizenship in a country they are legally allowed to operate in.