Back in my preteen years, I frequently played a game called "Team Fortress 2" (TF2). Apart from all the standard shooter mechanics you could find in any game, TF2 also featured a system that randomly gave players "loot boxes" that could be unlocked with keys (bought with real money) for a chance to obtain rare cosmetic items. I never thought very hard about the system back then, but now that it has spread to more games, I'm starting to see how slimy the practice really is.
Nowadays keys are worth $2.50 in real money, but the items you can unlock range from $0.02 to nearly $2000 depending on the game. From this it's clear to see the allure behind buying keys; if I can grab myself a rare item I'd be able to sell it for easy money! Sadly, as every gambler knows, the house always wins in the end.
More often than not, players end up unlocking dime-a-dozen cosmetics that have little to no resale value. So they keep trying to open more crates, thinking they're bound to get something good eventually, and before they know it they've shelled out $100 on keys.
Now this wouldn't be as big of a controversy if it only affected adults; by then people can make their own decisions on how to spend their money. However, loot crate systems exist in extremely popular games like "Counter Strike: Global Offensive" and "Playerunknown's Battlegrounds," both of which attract kids and young teens. Practices such as this indirectly introduces the concept of gambling to impressionable young people.
The rewards you get from loot boxes generally have no effect on actual gameplay; they allow you to customize your character/weapon and track certain statistics while the item is equipped. This has commonly been the biggest defense towards the implementation of this system since by that logic, people who don't care too much about cosmetics can control themselves.
However, I would argue that the community around loot box systems plays a large impact. Plenty of YouTubers with money to spare sometimes make loot box opening videos where they show off how lucky or unlucky they are. Young viewers can see these videos and try to grab the same item their favorite YouTuber did, blowing significant amounts of money in the process.
Loot box systems worm their way around standard gambling regulations by marketing it as just another part of the game. Combine that with the fact that some games don't even tell players the drop rates for different item rarities and you've got a well-protected scamming system. If left unchecked, a large amount of the next generation could get suckered by greedy game companies.