They’re intended for people that gamble a lot - not so much if you lose, it’s more about the level of money your putting at risk over time. Long run, the casino will make money off you. They want you to stay at their property. It’s also a way to recoup losses if you’ve won a lot.
I had a good run on slots and craps once at the Venetian, and was invited to a slot tournament with a free dinner and 3 free nights stay. I then won the slot tournament. But my broader non-tournament play didn’t keep up with the level they were looking for (they wanted you to take the tournament money and spend it there) so the comps got fewer and weaker. They came back months later when I started playing and winning (show tickets, dinners, etc). A bit of play credit can happen but it’s usually not a lot unless you’re a high roller (tens to hundreds of thousands of dollars).
Before the casino cards it was the pit bosses that would keep an eye on you, so this predates surveillance technology, it’s old school.
The industry is getting too greedy these days, even paid AAA games have this microtransaction crap, they are milking gamers dry.
Ironically the gaming press barely talks about this.
Candy Crush can (and does) let you play freely, only to popup the "insert coin to get help" when you are stuck. It also adjusts the game play to your level (by advancing to harder levels) so that you are always challenged and possibly get stuck. If you advance by paying, you probably will need to pay more to get further (if you failed an easier level without help you will probably fail later levels without such help).
In an imaginary world, a slot machine could have a camera to track who is playing. It would let you play for free the first few times, even give you some money, but leaving you one "advance" short of the stronger payments. After some rolls, you are prompted to insert coins to get extra advances. Of course, the machine keeps the payment structure favorable to itself, but tricking you into inserting more and more coins, all the while getting you hooked into the game. It could even adjust the payment structure to be more and more in its favor the more "hooked" it detects you are.
Regulation that prevents the above:
1. Slot machines cannot track users by any means.
2. The payment distribution has to fit certain parameters (think X% of money given back within N rolls)