Most publishers provide NO WAY of exchanging your loot (ie casino chips) into real cash.
Yep, and that is a good thing. This is a purely optional purchase in a game - something you should be playing for fun.
teens could be targeted for what is arguably petty gambling
Are prizes in candy and cereal gambling? I mean you paid for those 45,000 boxes of Diabeetus0's, but you had
to! How else could you win the prize? Curse those awful sugar barons targeting our teens! Get your pitchforks! We have to think of the children!!
How is this drastically different from baseball cards (which actually can be worth a lot of money)? CCGs?
Now, if you could exchange your loot box for cash then you might be on to something, but that isn't the case. Not to mention you can get the Great Golden Derp Gun of +1 without grinding and the "house" gets your cash. You winning and the house winning (or whatever) are no longer mutually exclusive events. They don't really need to act like a casino, a player with cosmetic items is really just an advertisement for their loot box system.
I don't really like loot boxes that much (micro trans ones anyway - ones for progress can be kind of fun) and we may need to mark games that have them. Beyond that I really can't see how this can be an issue. We have random chance based things all around us, gamers have been able to buy progress (gold farmers in MMOs etc), and it looks like civilization is still here. We seem to be fairly resilient when it comes to great moral panics.
"Dear Mr. President, There are too many states nowadays. Please eliminate three. I am not a crackpot."