I’m not a lawyer, and even having perused the official filing, it’s still legalese that I can’t swear I fully understand. There are two possibilities of what NY state actually wants:

1. just stop selling loot boxes
2. you can sell loot boxes, but only if you’ve verified that your customers are of legal gambling age

And I don’t know for sure which is true. Of course it’s in Valve’s best interests to represent this to their customers as the government trying to violate your freedoms, because it gets the public on their side. Remember the Epic case against Apple, where Epic knowingly broke a contract with Apple allowing in-game purchases to cut Apple out, then they had a trailer parodying the 1984 Apple ad to garner public support with “Free Fortnite” ready to go.