Introduction: Protective factors of adolescent gambling at the school level and their buffering potential are scarcely explored in prior research. This study aims to examine the protective possibility of low student–teacher ratio on youth gambling, both directly and by moderating the effect of low school performance. Methods: Data were derived from the 2016 Stockholm school survey, collected among 5,221 grade 11 students (~17–18 years) in 46 schools, with information on schools’ composition and student–teacher ratio obtained through registers. Gambling and risk gambling were coded as binary variables. School performance was captured by self-reported marks in three core subjects, dichotomised into average/above average and below average, respectively. Student-teacher ratio was used both as a continuous and trichotomised variable. Two-level binary logistic regression analyses were performed. Results: A below average school performance was associated with gambling and risk gambling but the association with gambling was only statistically significant at the 10%-level in the fully adjusted model. Student-teacher ratio was not directly associated with gambling and risk gambling but moderated the associations between school performance and both gambling and risk gambling, as these relationships were less pronounced in schools with a low student–teacher ratio. Conclusions: In sum, a low student–teacher ratio may protect students from gambling and risk gambling by buffering against the adverse effects of other risk factors, such as poor school performance. These findings suggest that a higher teacher density in upper secondary schools can be beneficial beyond school matters by positively influencing student behaviour outside of school.