Don't really have any data to base this thought on, but it seems like there could be a (positive?) feedback loop - at least from the standpoint of legal players

Don't really have any data to base this thought on, but it seems like there could be a (positive?) feedback loop - at least from the standpoint of legal players within a heavily taxed industry - where if high taxes were then used to prevent illegal players (bootleggers/smuggling) from entering the market of enforcing the existing laws. That way instead of general tax payers funding enforcement, it's the direct beneficiaries of the enforcement who are funding the effort. And they can decide how much they want to tax themselves.