Have studied this a bit, and if you google "prisoner's dilemma" and "cigarette advertising" you'll find a lot of interesting stuff.
In a nutshell, when it was proposed that cigarette advertising be made illegal, all the major companies didn't make much of a fuss, and when it happened their profits all went up. Surprising? Not really. Advertising wasn't really creating new smokers, which is what you absolutely need if your product is literally killing your customers. But company X didn't dare spend less than company Y for fear of losing market share. When it was abolished across the board, both company X and company Y could safely transfer their advertising budgets into what really works, which is making smoking more affordable, e.g. lots of free samples to kids in the third world to get them addicted.
So, arguably, the more money football clubs can make betting companies "waste" on sponsorship, the better.
Not in any way trying to play down the effect of gambling addiction on families, and I agree the new sponsors are not a great look. I wish they were an old-established Coventry firm. But there aren't many of them left.