They are (probably) governed by some kind of broader contract, and can probably be 'undone' or come under regulator scrutiny.
'Smart contracts' are a neat way for parties to 'agree' on something in a distributed way - but there's just no way that they will live up to being 'regular contracts'.
Maybe for some things like currency exchange - maybe.
But for anything else that happens in this world, contracts are complicated and require nuance. And there's always lawyers and a Judge and regulators that might want to have a say.
And while the application you've described is 'neat' - it doesn't really accomplish much. It's a novelty.
I see zero use for blockchain thus far - other than the eventual appearance of a possibly useful kind of crypto asset that doesn't exist yet because BTC and Etherium are full of flaws.
By smart contract, in this regard, I mean an Ethereum Solidity contract connected to an Oracle that has an Escrow component.
The way I see it is there are many companies at the moment that sit in the middle and mediate things by offering escrow services and trust that if you send X you'll receive Y. Crypto lets you start moving those things into a P2P setting by its nature of atomic transactions, programatic contracts/money, etc... Which I find pretty cool and I think a lot of people who spend some time in the space find cool too. FWIW I was skeptical when I first found a bitcoin ATM at Google Campus in 2014 and only really 'got it' in 2020 after years of saying WTF is the point? And for me that was when I was trying to organise an esports tournament with some strangers online and couldn't decide on how payments would work, while the services that managed this (read some API results and paid out after 7 working days) took a 15% fee.
Add crime too I guess.
Creating opportunities for people to gamble - new casinos, scratch-off tickets, those sad machines you see in bars - all of these are cash generation vehicles that historically have highly negative outcomes for members of the communities they are dropped into. Especially for groups that are already disadvantaged. This isn't academic speculation.
As for gambling on every day outcomes - otherwise known as living your life - it's reasonable to say that one of the fundamental measures of progress as a species and a society is our distance from accidentally eating poisoned food, dangerous driving, a lack of opportunity and self-determination, and being forced to accept bad partners.
In other words, the more we remove gambling, the better our lives become.
There's an interesting discussion to be had about truly free markets, for sure.
However, the modern stock market is neither fair nor random. It's not accessible to you or I in the same way that it is to financial institutions. Front-running and dark pools are accepted as normal. https://www.youtube.com/watch?v=bP74RBTE8kI
I would also suggest that Warren Buffett does not see the stock market as random or gambling. When he buys a company, it comes after huge amounts of research. A good stock trader obsessively researches the companies that they invest in. While it might not be anything like a guarantee of success, I sure hope you have better than Vegas odds when investing in a company that you've learned everything you can learn about without becoming an employee.