What competition has such a rich gambling scene though. No other game I am aware of (Maybe TF2 but, still valve)

Most mobile games? Apex? Overwatch? Keep in mind, a lot of the CS gambling happens off-platform and Valve doesn't collect any direct revenue from it, which is why Valve can't directly intervene in a lot of it.

Age verification on the marketplace transactions is the more likely scenario, and again, no other game I know of has as much of a gambling community so I don't really get why other publishers would leave if it doesn't effect them.

This argument is specifically in the context of lootboxes as gambling on Steam. Think how much people will spend in lootboxes on your average free to play game. If they aren't allowed to do this on Steam, games like Apex, CoD, PUBG, War Thunder, ect. won't stay on Steam.

Ultimately, I think you're missing the point of coffeezillas video, which is that a lot of people who were in the skin gambling community are actively or, started in it, as a minor. You are here trying to find all of these excuses for valve not to be held accountable for facilitating gambling to a minor.

This is exactly my point about Coffee's argument being muddled in this video, making it hard to discuss. There are three parallel problem here that the video combines into one: third-party casinos, CS lootboxes, and lootboxes in the industry in general.

In terms of Valve shutting down illegal/third party casinos, they don't have the means to impact this without also shutting down the entire market for everyone, innocent or guilty. Why should I, as someone who has never even bought a lootbox, nonetheless run an illegal casino be punished for their actions. Even then, casino owners aren't held responsible, they're just stopped. On the other hand, with government intervention, no one is caught in the crossfire and casino owners could actually be held responsible for their actions with fines or worse. Why wouldn't this be the better option?

In terms of Valve selling lootboxes themselves, yes its immoral, but as Coffee said about the casinos, they're competiting with other products doing the same and you can't reasonably expect one side to just role over and accept their loss. Instead, you need to change the system so neither side can use tactics like this. Instead of asking Valve to regulate themselves, and expecting their competition to do the same, you change the law (or just actually enforce it) to ensure that noone gets away with it.

What competition has such a rich gambling scene though. No other game I am aware of (Maybe TF2 but, still valve)

Gacha games have been taking over the world ever since Genshin Impact and those are pure gambling. Going even further back, Ultimate Team on FIFA (EA FC now) is probably the worst true "selling gambling to kids" product I can remember.