The skill represents the knowledge and practical skills related to wagering and games of chance (cards, dice, etc.) It determines the chance of success while, well gambling. These include:
Fallout: Maltese Falcon and Gizmo's Casino games: Roulette, craps, slots. This offers small sums of money, but can be exploited by weighing down the 1 and 4 (or 1 and 3 in the Falcon) buttons to cycle through the gambling dialogue rapidly and accumulate tens of thousands of caps in a few minutes. Note that this requires Gambling at least 60%, if not more.
Fallout 2: Affects the Mole-Rat Mambo in Redding, roulette games, and slots. It does not affect craps at Becky's in the Den, for some reason. The Fallout exploit works here as well. While playing slots, the player can weigh down a bet key (1, 2, 3, 4, 5, corresponding to 1, 2, 5, 10, 25 bets) and accumulate money. 50% Gambling is needed for a consistent success rate with $1 bets, 80% with $10.
Fallout Tactics: Gambling determines success rate while gambling with other characters (distinct option on the dialogue viewer). In unpatched games, it's possible to gamble while wagering nothing, eventually winning the entire stock of the other party by hitting Gamble continuously.