Any time you gamble and win and Phlan, you get nothing.
However if you gamble and lose, you lose your bet.

Is this intentional to stop savescumming your way to a fortune?

Maybe it's literally a money sink, since you will eventually be swimming in money anyway?

Actually I'm finding this out big time.

I had to create extra characters to hold the extra money. This game is a monty haul. I guess its moot that gambling doesnt work

Thank for the information.

I'm almost positive that gambling works as you'd expect in the Apple II version.
Also while late in the game you do indeed get plenty of money, very early on when you are trying to clear out the slums I've often been in a situation where I cannot afford to level up my characters unless I sell some magic items.
This isn't usually a problem after I clear the first couple areas, but the gambling and save scumming can be very helpful when you are full of very weak 1st level characters. Especially if you took a bunch of triple-classed elves and half-elves.