If Sparkmage's Gambit has two targets, and one of them is illegal as Sparkmage's Gambit resolves, only the remaining legal target will be affected. The illegal target won't be dealt damage and will be able to block that turn. If both targets are illegal as Sparkmage's Gambit tries to resolve, it won't resolve and none of its effects will happen.

If Sparkmage's Gambit resolves, but the damage is prevented or redirected, the target creatures still won't be able to block that turn.