I think probably because that is neither trading nor investing but just gambling. T212 makes money through the CFDs which fund the Invest and ISA accounts.
the % of spread betters who are successful is smaller than the % of CFD traders who are successful. when you want people to be able to succeed to keep coming back and use your service, a high lose rate is not very appealing. being tax-free isn’t so appealing if you can’t actually make any money.
ultimately though, it’s another specific service to provide which means more accounts and procedures to go through in order to bring it to market and whatever that means in regulations.