There's two components to it, one of which I think is being purposely glossed over because it's valve/steam.
To begin from the start, valve introduced weapon skins for CSGO which are normally obtained with drops or unlocked from crates/chests which are awarded at random to players. Unlocking a crate/chest requires the use of a key. All keys can only be bought for real money at something like $2.50. I believe they can be traded, but the origin of that key at some point, someone had to pay valve some money to buy it. Additionally, these skins can be traded amongst people, or put in the official market place for sale or obviously people can buy them for real money. Valve takes a cut of the sale when skins are sold for real money.
I play CSGO, but recognise the obvious cash grab with skins for what it is. So I've never spent any money on it at all. The difference is though that when you sell through the official channels, that money is left in your steam wallet, it can't be converted into real money easily at all. But since you can trade these skins, what can happen is that you trade for real money separately. I believe part of the problem is that these gambling sites allow you to log in through valve's API's and formalise, to some extent, the process so that the users don't entirely have to resort to trust.
The third party gambling sites, I have little idea what exactly they do (because I've never used them, never thought about using them, and care so little for it), but some I believe allow participants to put skins into a pool and then provide a chance to win the pool.
Now, it's clear that the owners of this one particular gambling site have been promoting it in a shady way, i.e. not disclosing their involvement and owning the company. That's one thing. I also think that valve has been profiting immensely, not from the third party gambling, but their first party gambling. The keys to unlock chests and a chance to win. It's all attracting gullible teens into the game who don't even play the game, rather spend money in an attempt to unlock skins.
I think this is a real scourge in a lot of electronic gaming now, the outright gouging with horse armour DLC, and in valve's case, chances to win items which realistically is gambling, is something which is exploiting games as a method to hide gambling and DLC platforms. Valve have thoroughly integrated this behaviour into many of their games, and into steam itself, by having 'trading cards' again, purchasable through their first party market place.
In my opinion, this is disgraceful behaviour from a company that has become really unethical now. Shame on valve!