Born in the 80s, in the US, I understood that carnival games are rigged in some way, but that arcade games were skilled based.
Only as an adult did I start to learn that the 'games of skill' in arcades were worse than carnival games.
I should have known arcade video games were rigged, given the cheap deaths/impossible to dodge attacks, but there's no reason I should have known the crane and other physical 'skill' based games were, for the reasons already mentioned by the GP comment.
Edit: reading further down, it looks like this may have been a recent change with the crane games. That makes me feel better about the arcades I used to frequent as a kid (mall and skating rink).
They were crappy, but I know people won stuff from them. But the usage rate was also quite high, given how popular arcades were back then.
I did not think that apparent games of skill would be rigged so as to be impossible to win when played perfectly until a certain number of losses had occurred. I expected that kind of behavior to be regulated as gambling, and probably outright banned most places that have sophisticated regulations about gambling.
Maybe it's cultural/regional? Everyone around me gets explained they're rigged as a kid (I'm late 30s), maybe in your country they prefer to feed the excitement/illusion of kids?
I'm Spanish, and we have a saying that goes "fallar más que una escopeta de feria", roughly translated to "failing (to work properly) even more than a gun from a fair", as said guns are popularly known to be purposely misaligned, or to use pellets of lower caliber than the barrel to make them lose accuracy. So generally very few people, and almost exclusively kids, show any trust towards fair/arcade games with prizes. They may still play for fun or to burn unwanted change, though.
On the other hand, many people around me needed to reach adulthood to start suspecting WWE fights aren't real.