Epic’s own PR statement on this is worth a read https://www.epicgames.com/site/en-US/news/epic-ftc-settlemen...
Like one section here says "no loot boxes since 2019 and never gambling"
Loot boxes are gambling.
"We respect our players by making our game pay to win"
But when we breed a culture of bullying and use behavioral science to get you to purchase cosmetics, that's fine.
Slimy, the whole game industry is slimy.
Epic allowed you to purchase loot boxes and get a random chance to get the thing you wanted as a result.
If it's something you can't pay for and it's intended to be a part of the way the game works, it's not intended to push you into spending money or anything like that, that's fine. Loot boxes are fun at the end of the day. That's not what this was though, this was gambling.
It's slimy, but per the legal definition, it isn't gambling.
Should it be illegal? personally, I think if it's targetted at children then yes.