I think education would be more effective than a ban. Teach children to recognize gambling at early stage. Show them with examples how the house/gaming studio wins by exploiting human nature. If you just protect children from exposure to gambling you will end up with vulnerable adults and adults don't have a guardian who can stop the bleeding even if the cost is a lot of kicking and screaming.
That only works however if the parents or schools are capable of providing the required teaching, many (most?), are not.
The games industry also goes to great lengths to obfusticate and hide the mechanics - it is truly predatory.
I agree that regulation is no panacea, but in this instance, combined with additional approaches such as education I belive it to be a suitable approach.
Would you also be in favor of removing age related gambling restrictions on real world gambling like slot machines? How about on things like purchasing tobacco? Let the free market handle it. These things literally hack the developing brain in not so nice ways. If you were to let marketers control it, you'd end up with a bunch of brain damaged teenagers. Countries like Singapore don't even let adults gamble freely.
I think gambling is harmful similarly to the worst of drugs. I would much rather see cocaine legal than gambling. I just think children are a demographic the least vulnerable as there is always a guardian to put stop to it, they can't lost life saving etc. I am all for limiting gambling (or outright banning many forms of it). I see the whole loot box thing as very low priority though and I think better results can be obtained by education and maybe even slight exposure to the exploitive mechanisms. If anything it's better if a child learn the hard way and lose pocket money than an if an unaware adult gets suckered in and lose their live savings, family, job.
Gambling is already banned for people under the age of 18 in nearly the whole world. Why should digital gambling be exempted from this and instead we would need to "educate" children about its dangers? If it's gambling it shouldn't be for children.
I know tens of people who got into trouble because of gambling as I spent most of my adult life in gambling world. None of them got exposure to it as a child. Losing toy money in soft form of gambling may be a valuable lesson for the future while still having a protective umbrella children enjoy. Worst that can happen is some kicking and screaming where the child discovers something they wanted to buy in the game isn't provided and there is no more money to spend. With an adult coming across the same deceptive mechanism for the first time the results could be and very often are tragic.
