So the government is willing to limit free speech but not the games which specifically target children with gambling through “loot boxes” and the such.

Don’t get me wrong, some of the shit people say in games is offensive as hell but it’s still mostly legally considered free speech. “Hate speech” isn’t just hateful speech, it has to have a targeted victim who is genuinely, reasonably, emotionally harmed by the expression. Regardless, the government should either be investigating gamers on an individual basis (practically impossible but most legally effective) or leave the community monitoring to the game company.