I'm not convinced an outright ban would be helpful. Regulation focused on harm reduction, ie restricting to adult like various kind of gambling, would be less heavyhanded, hopefully better compromise.
Looping back on the earlier comments, adding extra requirements on age verification is the more controversial part. Especially since privacy-preserving solutions aren't ready. Clearly neither of us are happy with that (not necessarily for the same reason).
I'd be happy if regulators just categorized loot box as gambling, applying the existing declarative age verification that already apply to gambling.
The choice between state regulation and self-regulation depend on various factors, eg exactly how it's implemented, people's opinion on freedom to operate companies without state intervention. A meta-analysis conclude results vary a lot from self regulation, it can go well or fail. This is just an opinion and nothing definitive, but I don't think game editors that make money from loot boxes would setup efficient self-regulation. It would hurt their bottom line.